The Rising Tide of Will and Trust Contests

June 15, 2010

San Francisco and Los Angeles Daily Journals

A prospective client contacts you about her recently deceased father. He had dementia that became severe towards the end of his life. About five years ago, when he was still living independently, he wrote a holographic will in which he left half his substantial estate to his son and the other half to a nonprofit dedicated to seeking extraterrestrial life. Your prospective client, disappointed and perplexed that she was not a named beneficiary, wants you to file a will contest on a contingency basis. Should you?

Modern medicine has allowed us to live longer and healthier lives. But as the average lifespan has increased, dementia has become more prevalent. Thus, trust and estate disputes involving mental capacity issues are on the rise.

Alzheimer’s disease, in particular, will result in ever-more legal wrangling. This brain disease is the leading cause of dementia. The Alzheimer’s Association estimates that one in eight individuals age 65 and older has the disease. As it progresses, Alzheimer’s can affect memory, planning and problem-solving skills, and judgment. At some point, the Alzheimer’s patient will lose capacity to create or revise an estate plan. However, when the loss of capacity occurs will often be open to debate. Patients living with Alzheimer’s or other mental health conditions, and their caregivers and health care providers, understandably focus on diagnosis and treatment. The common goal is to preserve the patient’s quality of life. Drugs may improve cognitive function or slow its decline.

Lawyers, in the context of evaluating estate plans, approach mental health issues from a very different standpoint. Does (or did) the person suffering with dementia have sufficient legal capacity to create or amend a will, trust, or power of attorney?

While the best way to avoid will and trust contests is to assess and record capacity when a client executes the document in question, capacity questions often surface many years after the fact when the testator or settlor is clearly incapacitated or dead. At that point, the attorney must obtain and review medical records, interview friends and family, and consult experts to reconstruct the person’s likely mental state when he executed the document in question.

A drafting attorney who has prepared hundreds of wills may have no recollection of the client and only a thin file that provides scant information. The subscribing witness, often the drafting attorney’s secretary, may have only had a fleeting interaction with the testator. Friends and family may be unable to pinpoint how and when their loved one’s condition took turns for the worse. Medical records may be unavailable, incomplete or ambiguous – the patient may not have visited her doctor anytime near the date she executed her estate plan. Hence, assessing mental capacity at a long ago moment in time can be a difficult task that leads to no clear conclusion.

Under California law, there is a presumption that adults have mental capacity to write a will, create a trust, or make some other disposition of property. This presumption can be rebutted by evidence of incapacity. The burden is on the contestant to prove that the testator or settlor lacked mental capacity at the time he signed the document. Capacity challenges are resolved in the probate department of the Superior Court by means of a bench trial.

A mere diagnosis of Alzheimer’s, or some other mental disorder, does not show mental incapacity. Rather, under California’s Due Process in Competency Determinations Act, the contestant must show either that the testator/settlor was generally incapacitated or that he suffered from a mental disorder with symptoms including delusions or hallucinations.

A person lacks general capacity if, at the time the will is executed, he does not have sufficient mental capacity to understand the nature of the testamentary act, understand the nature of his or her property, and remember and understand his or her relationships to family members and those whose interests are affected by the will. A person who has experienced short-term memory loss, as often occurs early in the progression of Alzheimer’s, may have trouble remembering what was said a few minutes ago, but retain a firm understanding of his assets and family relations.

In such a case, the will contestant may consider undue influence as an alternative theory. A person who has testamentary capacity but also suffers from a weakened mental condition or dementia may be unable to resist the influence of others. Often, contestants will begin by asserting both lack of capacity and undue influence and then see how the evidence pans out. Surprisingly, while California appellate courts have taken up capacity questions in a variety of contexts, there is no published opinion involving Alzheimer’s. There are, however, several cases analyzing capacity in the context of progressive “senile dementia,” most notably Estate of Mann (1986) 184 Cal.App.3d 593, which reasons that prior instances of incompetence create an inference of incompetence at the time that the testamentary document is created. Yet the case goes on to reason that if the patient has a history of “lucid periods” there is a presumption that the testamentary document was executed during such a period. Given our evolving understanding of Alzheimer’s and other forms of dementia, this analysis will be fine-tuned by the courts in future cases, but the outcome of each case will be fact-specific.

Delusions or hallucinations provide an alternative basis for a capacity challenge, but the contestant must show that they actually caused a disposition of property that, but for the delusion or hallucination, would not have occurred. The importance of showing a causal connection was recognized in Estate of Perkins (1925) 195 Cal. 699. In 1985, the California Legislature codified the Perkins capacity test with the enactment of Probate Code Section 6100.5. Hence, a science fiction fan legitimately might decide to leave his entire estate to a nonprofit organization seeking extraterrestrial life. On the other hand, such a disposition may be invalidated if it can be proven that the testator was hallucinating regarding an alien visitor when he signed his will.

One of the fundamental challenges in resolving will contests and trust contests is the disconnect between the content of medical records and the legal criteria for capacity. Health care professionals who treat patients with symptoms of mental disorders administer cognitive tests that ask patients such things as how many animals they can name in one minute, whether they can count by sevens, and whether they can spell words backwards. The patient’s ability to draw a cube may be well documented from visit to visit.

Yet doctors may care for a patient for many years without ever asking (or documenting in a chart) whether the patient recalls the names of his family members or has a basic understanding of what he owns. While such information may be immaterial in diagnosis and treatment, it is pivotal when the patient’s capacity is under the legal microscope. Hence, retained experts, often psychiatrists or neurologists, or both, are left to glean what they can from the medical records and the anecdotal recollections of friends, family members and caregivers.

Contemporaneous writings by the testator or settlor, such as letters written to loved ones, can provide key evidence of capacity or incapacity. As the Baby Boom Generation gets older, e-mail and other forms of electronic communication will more often provide clues in capacity disputes. For now, many older testators and settlors have not left behind any electronic trail of breadcrumbs.

With the foregoing in mind, should you take on the daughter’s will contest as a contingency case? It may be a good business proposition if there’s enough at stake and a strong factual basis. As time permits, the prudent lawyer should gather and evaluate the facts before proceeding with the representation. However, it may not be feasible to obtain medical records until after the start of the litigation.

Prospective clients who have been disfavored or disinherited may seize on anecdotal evidence that parent, uncle, or cousin was eccentric, or they may fixate on a diagnosis of Alzheimer’s, but they will need stronger evidence to present a successful will or trust contest.

Jeffrey Galvin is a partner with Downey Brand in Sacramento. He represents clients in civil litigation, with an emphasis on trust and estate disputes. He can be reached at [email protected]. Laura Brown is an associate with Downey Brand in Sacramento where she handles civil litigation, including trust and estate disputes. She can be reached at [email protected].

Reprinted and/or posted with the permission of Daily Journal Corp. (2010).