A. Mental Capacity

1. A. Mental Capacity • In this section, we will consider the requirement that testators be of “sound mind” when deciding the terms of their wills • 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 • Ms. Washburn executed three wills, and after the executor submitted the third will for probate, Ms. Washburn’s niece challenged the will (which shifted much of the estate to Ms. Washburn’s caretaker) • The trial court invalidated the third will on grounds that Ms. Washburn lacked mental capacity because of Alzheimer’s disease • She was unable “to recollect the property she wished to dispose of and understand its general nature” • She was unable “to make an election upon whom and how she would bestow the property by her will”

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. Will 1 Will 3 Will 2 Death of Margaret Fay In re Estate of Washburn (2) In re Estate of Washburn690 A.2d 1024 (N.H. 1997) Feb. 1992 March 1992 April 1992 Oct. 1986 ~ 3 weeks $5000 each to Catherine Colonna and other unnamed individual Residue to Barbara A. Remick Several $1000 bequests $5000 to Barbara A. Remick [caretaker] Residue to Catherine Colonna Several $1000 bequests “Portsmouth home, personal effects and residue of her estate” to Margaret Fay [sister], or in default thereof, Catherine Colonna [niece].

8. Burdens of proof, minority (including Indiana) • Initial presumption that the testator possesses mental capacity • Contestant may offer evidence to rebut the presumption • Ms. Washburn was confused and forgetful, and doctors testified that she had some degree of Alzheimer’s disease • 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?

9. The importance of burdens of proof • The appellate court doesn’t decide de novo, but only whether the probate court acted reasonably • Medical testimony about the Alzheimer’s disease • Discrepancies between Ms. Washburn’s statements and the terms of the will (e.g., caretaker would receive house, but niece would be treated equally overall) • Ms. Washburn didn’t recognize a niece at a family funeral two months before executing the will, she didn’t recall all of her sister’s heirs, she forgot she had already paid the bill for her sister’s funeral • Was the second will valid? Was there undue influence by the caretaker?

10. What were the facts in Wilson, p. 161? • Ms. Greer devised her property in 17 equal shares to 16 blood relatives and a caretaker. One of the relatives claimed that Ms. Greer lacked mental capacity • The jury agreed with the challenger, but the trial court judge overrode the jury • Was there sufficient evidence to support the jury’s verdict? • The supreme court said no, but only by a 4-3 margin

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

12. 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? • There was evidence that she had some degree of dementia, she was confused about things, she had an irrational fear about flooding in her home • Her physician had reported in a guardianship proceeding that she was incapable of managing her estate and her property • The question was whether she was able “to form a rational desire regarding the disposition of her assets” • Maybe she couldn’t manage her property, but that’s a different question than testamentary capacity—and her drafting attorney believed she understood what she was doing

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? • Differences in the burden of proof • The party with the burden of proof lost in both cases. • The terms of the will seemed more natural in Ms. Greer’s case • Courts worry that juries are prone to favoring contestants to wills

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? • Spicer Breeden committed suicide after a hit-and-run accident that killed a newspaper columnist. • Before killing himself, he executed a hand-written (holographic) will, leaving his property to a female friend and precipitating a challenge by family • Spicer had been abusing cocaine and alcohol, and he harbored delusional beliefs about threats from the FBI, friends and others.

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? • He was high on drugs (alcohol and cocaine) • He was alternatively euphoric and depressed (bipolar?) • He was paranoid • He was suicidal

27. Evidence of Breeden’s capacity • He could index the major categories of the property comprising his estate; • He knew his home and rental addresses; and • He identified the devisee by name and provided her current address. • The will was “legible, logical in content, and reasonably set[ ] out [the decedent’s] intent.”

28. Evidence of Breeden’s capacity • When Spicer wrote the will, he was in command of his motor skills and his handwriting was unremarkable when compared to other handwritings • Did his delusions influence his disposition? • Concerns about the FBI wouldn’t have affected his decision • He did have delusions about family members, but there was the evidence about his estrangement—there was testimony that he did not plan to leave property to family members, and an earlier will had excluded some of them.

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 “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).

32. Estate of Lakatosh, p.182 • 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.

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

34. 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.

35. 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 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 + =

36. Undue influence in Indiana • If a confidential relationship exists (attorney-client, principal-agent, husband-wife, parent-child, pastor-parishioner), then contestant shifts burden of proof • If the influencer benefits from the questioned transaction • The presumption of undue influence may be rebutted by establishing through clear and convincing evidence that • the influencer acted in good faith, • the influencer did not take advantage of the position of trust, and • the transaction was fair and equitable

37. Undue influence in Indiana • Note that if the undue influence arises from the facts of the case rather than a recognized fiduciary relationship, a confidential relationship is established if it is shown that the parties did not deal on terms of equality • the influencer dealt with superior knowledge of the matter derived from a fiduciary relationship, • the influencer dealt from a position of overpowering influence, or • the testator dealt from a position of weakness, dependence or trust justifiably reposed in the influencer • Lucas v. Frazee,471 N.E.2d 1163, 1167 (Ind. Ct. App. 1984)

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? • Ms. Moses left her estate to Clarence Holland, who was both her lover and attorney. Her sister challenged the will. 

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? • Clarence served as her attorney, so we have a fiduciary. • Were there suspicious circumstances? • The court thought Ms. Moses’ medical problems and alcoholism made her vulnerable • He also faulted the lack of independent advice from the lawyer (who acted as a scrivener rather than a counselor), but note that the lawyer had no connection with Clarence

41. Moses, p.186 • What was really going on ? • The court’s pejorative view of her relationship (aging woman with a “pathetic hope that she might marry him”). • Would the court have said the same if Fannie were Frank and Clarence were Clara (note 2, p. 190)? • Fannie and Clarence were engaged in a “meretricious” relationship (i.e., they were lovers out of wedlock). • But the intimate relationship between Fannie and Clarence should have counted as support for upholding the will rather than for invalidating the will (note 1, p. 190)

42. Moses, p.186 • What shouldn’t the court have been suspicious? • Ms. Moses had a many-year, intimate relationship with Holland • The lawyer who drew up the will really was independent (unaware of their relationship and no connection to Holland) and was a well-respected attorney • Holland was unaware that she was leaving her estate to him • The lawyer drafted the will according to Ms. Moses’ instructions. • Ms. Moses was a very good businessperson who managed her real estate properties well • She “executed her last will after the fullest deliberation, with full knowledge of what she was doing, and with the independent consent and advice of an experienced and competent attorney whose sole purpose was to advise with her and prepare her will exactly as she wanted it” (p. 189).