Mark Reckman - Capacity Standards for Signing Legal Documents

SIMPLY MONEY   September 2024   WHAT ARE THE CAPACITY STANDARDS FOR   SIGNING LEGAL DOCUMENTS?  ELDER LAW ATTORNEYS ARE OFTEN CALLED UPON TO DETERMINE IF A CLIENT HAS THE LEGAL CAPACITY TO SIGN CERTAIN DOCUMENTS. HOW DO THEY MAKE THAT CALL? WELL, THE TESTS ARE DIFFERENT FOR DIFFERENT THINGS. WHEN CONFRONTED BY THE PROSPECTS OF A GUARDIANSHIP, THE TEST IS IN THE STATUTE:CAN A PERSON MANAGE HIS/HER AFFAIRS OR THE AFFAIRS OF A DEPENDENT?THAT IS A VERY BROAD AND VAGUE TEST. THE COURT USUALLY LOOKS FOR CLUES THAT A PERSON IS AT RISK FOR PHYSICAL HARM OR FINANCIAL LOSS. THE COURT ALSO RELIES ON A PROFESSIONAL ASSESSMENT BY A DOCTOR OR MENTAL HEALTH PROFESSIONAL. THE LAW PRESUMES THAT WE ARE COMPETENT UNLESS PROVEN OTHERWISE BY CLEAR AND CONVINCING EVIDENCE. ONLY THE COURT CAN MAKE THAT LEGAL FINDING.BUT THE TEST IS DIFFERENT FOR SIGNING DOCUMENTS.  I.        SIGNING A WILL:CALLED TESTAMENTARY CAPACITY.   THIS TEST REQUIRES THE PERSON SIGNING TO BE FREE OF DELUSION AND TO:1.    UNDERSTAND THE NATURE OF HIS/HER PROPERTY2.    UNDERSTAND HIS/HER RELATIONSHIP TO THOSE WHO WOULD BE HIS NATURAL BENEFICIARIES3.    LEAVE HIS PROPERTY IN A MANNER CONSISTENT WITH 1 AND 2 ABOVE4.    BE ABSENT OF UNDUE INFLUENCE  II.   CAPACITY TO SIGN A CONTRACT  1.    COMPREHENSION OF WHAT IS “GOING ON” IN THE TRANSACTION2.    REASONABLE TERMS IN THE AGREEMENT  3.    UNDERSTAND THE NATURE AND QUALITY OF THE CONSEQUENCES OF THE AGREEMENT4.    ABSENCE OF UNDUE INFLUENCE  III.   CAPACITY TO SIGN A POA. THE SIGNOR MUST:  1.    KNOW AND TRUST THE AGENT  2.    UNDERSTAND THAT HE/SHE IS GIVING THE AGENT THE POWER TO ACT IN HIS/HER STEAD3.    BE ABSENT OF UNDUE INFLUENCE        WHAT IS THE LAWYERS DUTY IN ALL THIS IS?:   1.    TO CARRY OUT THE CLIENT’S WISHES  2.    TO MAKE A REASONABLE INQUIRY INTO THE CLIENT’S CAPACITY      3.    TO MAKE A REASONABLE DETERMINATION ABOUT THE CLIENT’S CAPACITY4.    TO DETERMINE THE ABSENCE OF UNDUE INFLUENCE.        EVERYONE IS PRESUMED TO HAVE CAPACITY.