In order for a person to create a valid Will or Trust they must have “sound mind.” The term “sound mind” is short hand for a rather complicated set of rules for determining mental capacity. If a person lacks proper mental capacity, then any document they sign is deemed invalid under California law. A person may lack proper mental capacity if they exhibit memory loss, or have been diagnosed with dementia or Alzheimer’s.

Surprisingly, there is more than one set of rules for testing mental capacity under California law—one for Wills and a different one for Trusts. The capacity required to make a Will (referred to as “Testamentary Capacity”) requires a person creating a Will to

  • understand he or she is creating a Will,
  • understand what property he or she owns, and
  • understand his or her relations to the persons who have claim to their assets (usually his or her children) and whose interests are affected by the terms of the Will.

Will capacity is considered the lowest form of mental capacity. In fact, a person can be deemed to lack the capacity to make a Trust, yet still have sufficient capacity to make a Will.

The mental capacity required to create a Trust is a higher capacity standard (referred as “Contractual Capacity”). In order to create a valid Trust, a person must be able to understand and appreciate the following:

  • The rights, duties and responsibilities created by, or affected by the decision,
  • The probable consequences for the decision maker and, where appropriate, the persons affected by the decision, and
  • The significant risks, benefits, and reasonable alternative involved in the decision.

The Trust capacity standard is much more stringent than the Will capacity standard requiring, among other things, a person to understand and appreciate the consequences of the decision being made. This is not a requirement under Will capacity. A person can create a Will without knowing, understanding or appreciating the consequences that Will may have on himself or others.

These two different levels of capacity are significant when creating Wills and Trusts for persons who are older or may be in the beginning stages of dementia, Alzheimer’s or memory loss. It is likely a person with the beginning stages of dementia has the capacity to create a Will, but may not have the capacity to create (or perhaps revoke) a Trust.

Best practices require that an older person, or any person, showing signs of memory loss or dementia should be evaluated by their primary care physician for a determination of the required capacity to create a Will, and further to create a Trust, before doing so. A primary care physician’s letter stating that an older person with memory loss or dementia has the capacity to create a Will (Testamentary Capacity) and further, has the capacity to create a Trust (Contractual Capacity) will be very difficult to overcome by a beneficiary or family member contesting the terms of the Will or Living Trust after the Will or Trust creator’s death.

  • Dee

    My aunt had alzheimer’s at the time she signed her trust, however, the two ladies who are her trustees (non-relations), and no one in our family have every heard of them until they stopped my aunt from talking to us, had a health care directive. This allowed them to be the only ones who could get information about her whereabouts, care, and even when the detectives found out where she was, I was not able to even find out “ANYTHING” about her. The home where she was placed in by these two women instructed the home that if anyone called tell them that they cannot let her family speak to her or have any information about her health or care.

    People who are smart enough to cover all the bases if they plan to make out with alot of money, leaves no hope in the court system for unsuspecting beneficiaries of trusts or wills, in my opinion.