373 North L Street, Livermore, CA 94551

Mar 26, 2019

Defining Diminished Mental Capacity

diminished mental capacity, special needs beneficiaries, developmental disability, intellectual disability

Before the term “diminished mental capacity” was used in constitutional and political discussions, the legal world made this essential to any valid contract or legal document. Courts have historically required a person to know what they are doing when executing a document for it to be valid. With age, mental capacity sometimes fades and can impact your ability to make your wishes properly known. Thus, estate planning attorneys will often evaluate this early on and throughout the process of finalizing the documents.

What is the Standard?

Judging mental capacity can be very hard. There is no clear test. It’s evaluating all the factors surrounding an individual. Some common questions for an estate planning attorney to ask in the process are:

  • How well does the client know their basic information?
  • Do they know the key information about current events?
  • Do they remember prior conversations between meetings?

These are just a few examples but every interaction creates the question of does this client have diminished mental capacity or do they understand what is going on. Usually, this becomes a “gut” feeling that derives from the client’s ability to understand what is going on and the impact it may have. However, a key thing to remember is that any state of mental capacity can change. For instance, if a person is on anesthesia following surgery, they will likely not be able to decide things but shortly thereafter, they may have gained their cognitive ability to make any decision valid.

Legal Impacts of Diminished Mental Capacity

The impact of diminished mental capacity all depends on the extent. California has two standards. Should someone be so “out of it” that they have no understanding, then any agreement will be void. However, if the individual is just not of the right mindset, but have some understanding, the agreement can be rescinded.  

With regards to estate planning documents, the requirements are a bit different that a mere contract.  The key to prevent having a void document due to diminished mental capacity is to ensure the client understands:

  • What is the document saying
  • The assets that are being discussed
  • their relationship to the beneficiaries

If the trust is complex or there is an amendment to the trust, then other requirements need to be met in order to have full “contractual capacity”. The beneficiary must be able to communicate, understand, and appreciate:

  • What their rights and responsibilities are
  • What the impact or impacts are on them
  • Benefits, risks and alternatives to this course of action

This means that the client must be able to understand not only the terms, but also the potential consequences of terms and their alternatives. As a result, an estate planning attorney plans meetings and questions to ensure there is no diminished mental capacity. If a lawyer suspects such, he/she should refuse to prepare such estate planning documents.

If you have questions or believe estate litigation is necessary due to a diminished mental capacity issue, please feel free to contact John Lewman for a consultation.

Share your views

About Lewman Law