Mental capacity

1. Mental capacity • In this section, we will consider the requirement that testators be of “sound mind” when deciding the terms of their wills—recall that we want to carry out donor intent • In later classes, we will consider other requirements to make wills valid (e.g., witnessing) • As a general matter, the law favors findings of capacity • There is a presumption in favor of testator capacity that the challenger has the burden of overcoming • The requirements for finding capacity set a low threshold • However, we will see that social norms about family relationships can skew the way in which courts apply the legal standards

2. Valid wills • For wills to be valid, they must be made by testators • Who are of sound mind, • Who understand what they are doing, and • Who are expressing their wishes voluntarily. • Accordingly, wills may be invalid if • A testator lacks mental capacity because of dementia or other mental illness, or • The will is the product of undue influence, fraud or duress

3. Mental capacity, p.159 Testator “must be capable of knowing and understanding in a general way[:] [1] the nature and extent of his or her property, [2] the natural objects of his or her bounty (e.g., family members), and [3] the disposition that he or she is making of that property, And must also be capable of [4] relating these elements to one another and forming an orderly desire regarding the disposition of the property.” • Restatement (Third) of Property: Wills and Other Donative Transfers §8.1(b) (2003)

4. Important considerations for challenges to capacity • Burdens of proof • Trial before jury or judge • The role of social context in defining mental capacity and undue influence • The importance of planning when a will contest looms • We’ll discuss this topic next class

5. What were the facts in Washburn, p. 159

6. In re Estate of Washburn (1) In re Estate of Washburn690 A.2d 1024 (N.H. 1997) Margaret Katherine ?? Catherine (niece) Barbara (caretaker)

7. Burdens of proof, minority (including Indiana) • Initial presumption that the testator possesses mental capacity • Contestant may offer evidence to rebut the presumption • What evidence was offered in this case? • If presumption is rebutted, proponent of the will must prove mental capacity by a preponderance of the evidence • The probate court concluded that the caretaker failed to do so—was there sufficient evidence for the probate court’s holding?

8. The importance of burdens of proof • The appellate court didn’t decide de novo, but only whether the probate court acted reasonably. What evidence supported the probate court’s holding? • Note other questions that were lurking. Was the second will valid? Was there undue influence by the caretaker?

9. What were the facts in Wilson, p. 161?

10. Wilson v. Lane Wilson v. Lane,614 S.E.2d 88 (Ga. 2005) 16 Blood Relatives Katherine Lane Jewel J. Greer (caretaker & executrix)

11. Note the court’s focus on testamentary capacity • Ms. Greer may have suffered from some diminution in mental capacity, but did she lack the ability to make a rational decision about the disposition of her estate? • The question was whether she was able “to form a rational desire regarding the disposition of her assets.” Could she?

12. What about the letter by her physician the year before the will was executed, p. 162?

13. Burdens of proof, majority • Proponent of will must introduce prima facie evidence of due execution • Burden switches to contestant to prove mental incapacity by a preponderance of the evidence • UPC § 3-407

14. Why did Washburn come out differently than Wilson?

15. Lawyer’s responsibility • The lawyer generally should not prepare a will, trust agreement or other dispositive instrument for a client who the lawyer reasonably believes lacks the requisite capacity. On the other hand, because of the importance of testamentary freedom, the lawyer may properly assist clients whose testamentary capacity appears to be borderline. In any such case the lawyer should take steps to preserve evidence regarding the client’s testamentary capacity. • ACTEC Commentary, page 165 (emphasis added)

16. Ante-mortem probate? • Only possible in a few states, and not very useful • Proceedings are costly • Testator may want to revise the will—do you need a new ante-mortem probate? • The process may create intra-familial conflict, or legitimate challenges might be suppressed by the reluctance of potential beneficiaries to challenge the testator

17. Lesser Capacity Required Greater Capacity Required Capacity thresholds Irrevocable Lifetime Gift; Contract; Deed Marriage Will Protection of Property v. Testamentary Freedom Protection of Property v. Individual Autonomy Protection of Property v.Freedom of Contract

18. Capacity for irrevocable gift • To make an irrevocable lifetime gift, not only must one have capacity to make a will, but one “must also be capable of understanding the effect that the gift may have on the future financial security of the donor and of anyone who may be dependent on the donor.” • Restatement (Third) Property, page 166

19. Insane delusion Mental Capacity The testator may have sufficient mental capacity generally, but an “insane delusion,” usually about a family member, may affect the disposition of the estate Insane Delusion

20. Proving insane delusion Majority Rule Minority Rule Is Delusion Insane? A delusion is insane even if there is some factual basis for it if a rational person could not have drawn the same conclusion. If there is any factual basis for the delusion, it is not insane. Did Delusion Cause Bequest? Insane delusion materially affected or influenced the will. Insane delusion might have caused or affected the will (i.e., presume causation if there is an insane delusion + an unnatural disposition)

21. In re Strittmater In re Strittmater, p.16953 A.2d 205 (N.J. Ct. Errors & Appeals 1947) Cousins Louisa F. Strittmater The outcome was a reflection of contemporary social mores. Undoubtedly, some decisions today will look as problematic in future decades. National Woman’s Party

22. What were the facts in Breeden, p. 171?

23. Did Spicer possess testamentary capacity, and did he suffer from an insane delusion? • This case illustrates how low the threshold can be for finding testamentary capacity • Colorado applies • Majority rule for burdens of proof for testamentary capacity (p. 175) • A hybrid of majority and minority rules for insane delusions (pp. 175-176) (majority rule on causation; minority rule on whether the delusion is insane)

24. Breeden v. Stone (1) Breeden v. Stone992 P.2d 1167 (Colo. 2000) Petitioners Vic Sr. Vic Sr. Respondent Spicer Breeden Sydney Stone Vic Holly

25. Test for testamentary capacity—Colorado essentially follows Restatement, p.175 • Testators must • Understand the nature of their act; • Know the extent of their property; • Understand the proposed testamentary disposition; and • Know the natural objects of their bounty • The will must represent the testator’s wishes • The test is roughly the same from state to state

26. Did Breeden have capacity? What suggested he did not?

27. Evidence of Breeden’s capacity

28. Evidence of Breeden’s capacity • Did his delusions influence his disposition?

29. Breeden v. Stone (2) Breeden v. Stone (2) 1991 Holographic Codicil 1996 Holographic Will

30. B. Undue Influence Lord Justice Hannen

31. Undue influence • We continue our discussion of doctrines that address the question whether a will or trust is a genuine expression of donor intent • There are general principles for defining “undue influence,” but this is one of the many doctrines for which one can understand the contours of the doctrine only by reading a lot of cases that apply the doctrine

32. Undue influence “A donative transfer is procured by undue influence if the wrongdoer exerted such influence over the donor that it[:] • overcame the donor’s free will and • caused the donor to make a donative transfer that the donor would not otherwise have made….” • Restatement (Third) of Property: Wills and Other Donative Transfers §8.3(b) (2003).

33. Undue influence • Inference of undue influence can be raised when • Donor was susceptibleto undue influence • Alleged wrongdoer had opportunityto exert undue influence • Alleged wrongdoer had a dispositionto exert undue influence • There was a result appearing to be the effect of undue influence • Restatement (Third) of Property: Wills and Other Donative Transfers §8.3 (2003), comment.

34. Estate of Lakatosh, p.182 656 A.2d 1378 (Pa. Super. 1994) Rose Lakatosh Roger Jacobs Drafted Will Second Cousins Estate Lawyer

35. Estate of Lakatosh • Lakatosh provides an easy case of undue influence • Roger exploited an elderly woman, Rose • He visited her at least once a day, and helped her around the house and with her errands • After gaining her confidence and trust and only a few months after they met, Roger got her to give him power of attorney and used his cousin to draft the documents • When Roger took Rose to sign the will, she was not focused or coherent • He then began to drain her estate for the benefit of himself and his friends. • What if Roger had not drained the estate while Rose was alive?

36. Note the possibility of lack of capacity or insane delusion • If she wasn’t focused or coherent, and she was out of touch with reality (p.183) when she executed the will, did she know what she was doing? • Also, she believed that her nephew had threatened to rob and kill her and that he was persecuting and torturing her.

37. Presumptions & Burden Shifting Presumption of Undue Influence (Burden Shifting) Types of Confidential Relationships: • Fiduciary (attorney, appointed agent) • Reliant—special trust and confidence (financial adviser, physician) • Dominant-subservient (feeble adult and caregiver or adult child) Examples of Suspicious Circumstances: • Secrecy or haste • Participation of wrongdoer in drafting of will • Reasonable person would regard it as unnatural, unjust or unfair • Donor’s attitude toward others changed by reason of his relationship with the alleged wrongdoer Confidential Relationship Suspicious Circumstances + =

38. Moses, p.186 • As with Strittmater, we have a case whose outcome reflects social attitudes of the day much more than principles of undue influence.  • What’s the story here?

39. In re Will of Moses,227 So. 2d 829 (Miss.1969) In re Will of Moses Husband 1 Fannie Moses Sister Husband 2 Husband 3 Clarence Holland (lawyer and paramour)

40. Moses, p.186 • Do we have a confidential relationship? • Were there suspicious circumstances?

41. Moses, p.186 • What was really going on ?

42. Moses, p.186 • Why shouldn’t the court have been suspicious (i.e., why were there good reasons to uphold the will)?

43. Kauffman, p. 191 • Robert Kauffman was a multimillionaire by virtue of inheritance and developed an intimate relationship with Walter Weiss after moving from DC to NYC to establish a life independent of his family • Between 1951 and 1958, Robert executed a series of wills, gradually giving more of his estate to Walter and less to his family. • He also wrote a letter with the 1951 will that was attached to each successive will explaining to his family why he was “eternally grateful” to Walter • Robert’s family did not like Walter, whom they thought gave Robert interfering business advice about the family-owned Kay Jewelry stores

44. In re Kaufmann’s Will, p. 191247 N.Y.S.2d 664 (App. Div. 1964), aff’d, 205 N.E.2d 864 (N.Y. 1965) In re Kaufmann’s Will Family: Kay Jewelry Robert Kaufmann Walter Weiss

45. Was there undue influence, pages 184-185? • Was there a confidential relationship? • Were there suspicious circumstances? • Another case reflecting the social mores of its time • What advice would you give a client like Robert?

46. What were the facts in Lipper v. Weslow?, p. 193 What were the grounds for a claim of undue influence?

47. Lipper v. Weslow Lipper v. Weslow369 S.W.2d 698 (Tex. Civ. App. 1963) Sophie Block Mr. Lipper Mr. Weslow Bernice Julian Irene G. Frank Julian Julia Alice

48. Was there undue influence? • What was unusual about the court’s legal analysis? • What was bad about the son’s writing of the will? • Was there sufficient evidence to overcome the claim of undue influence?

49. Bequests to attorneys • Undue Influence • Many courts hold that a presumption of undue influence arises when an attorney-drafter receives a legacy, except when related to the testator. • Unethical Conduct • “A lawyer shall not solicit any substantial gift from a client, including a testamentary gift, or prepare on behalf of a client an instrument giving the lawyer or a person related to the lawyer any substantial gift unless the lawyer or other recipient … is related to the client.” Model Rule and Ind. Rule 1.8(c) • Fiduciary Appointments • “In obtaining the client’s informed consent to the conflict, the lawyer should advise the client concerning the nature and extent of the lawyer’s financial interest in the appointment, as well as the availability of alternative candidates for the position.” Model Rule 1.8(c), comment

50. The problem of the dead hand • The controlling consideration in determining the meaning of a donative document is the donor’s intention. • The donor’s intention is given effect to the maximum extent allowed by law. Restatement (Third) of Property: Wills and Other Donative Transfers §10.1 (2003) (p.27)