Clients who are concerned about an elderly loved one whose behavior has changed or whose ability to accomplish everyday tasks has become more limited often have questions about capacity. Some common signs that your loved one may need formal assistance include trouble remembering to take medication or pay bills and disorientation. If you have any of these concerns, contact one of our Kansas City estate planning attorneys.
What is capacity?
The term “capacity” can be difficult to define as there are different meanings depending on the situation or what is trying to be accomplished. Part of the difficulty comes in applying the different definitions in real-life situations. For instance, your loved one may appear to be able to make decisions, but you may later discover that he actually had diminished capacity. It is in these situations that legal actions contesting estate plans arise. Let our Kansas City estate planning attorneys help before this becomes an issue.
The meaning of diminished capacity
The term diminished capacity comes up most often when estate plans are being contested in some way. However, the definition of this term will usually depend on the facts of each situation and also on the state law that is applicable. For that reason, Kansas City estate planning attorneys should assist you in drafting your estate plan in order to make sure capacity is not an issue. Otherwise, there may be contests to your estate plan.
What capacity is needed for creating a will?
In order to create a valid will, the testator (the person making the will) needs to be able to understand the following things: the nature and extent of his assets, the natural objects he owns, the specific decisions that will be expressed in the will, and the ability to understand and create a rational estate plan.
Once the will has been created, it does not matter if the testator is no longer able to make decisions regarding, for example, business transactions. As long as he had the required mental capacity at the time the will was created and signed, the will should be valid, at least as far as capacity is concerned.
The different types of capacity involved in estate planning
When it comes to comprehensive estate planning, there are various types of capacity that may become an issue. These different types relate to the nature of the estate planning tool at issue. Let our Kansas City estate planning attorneys explain these various types.
Testamentary Capacity refers to the capacity of the testator when the will is created, as explained above, you must be able to understand the nature of the will, the provisions it includes, and how those provisions will affect your heirs, and what property you own. This type of capacity is often referred to as being “of sound mind and body.”
Donative Capacity refers to the mental capacity at the time you donate to charity or give a gift to someone. If you intend to donate part or all of your estate to a charity, then your donative capacity will be very important. You need to be able to understand the extent of the gift and be of sound mind at the time the gift or donation is made or at the time you create such provisions in your will or other estate planning instrument.
Contractual Capacity refers to your mental capacity at the time you enter into a contractual agreement of some type. It involves understanding the nature and effect of the contract at the time it was executed, including the full extent of the transaction included in the agreement.
Capacity to Execute a Durable Power of Attorney is vitally important to comprehensive estate planning. You must have the required capacity when creating and executing a durable power of attorney or it will be invalid. This includes not being under any pressure from anyone to grant them power of attorney. You must also understand what it means to give that individual power over your estate or certain aspects of your affairs.
Decisional Capacity in Health Care refers to the capacity to make decisions regarding your own health care. When you create a power of attorney for health care, it means that whenever you lack the capacity to make your own decisions about your health care, the agent you have chosen will make those decisions for you. This type of power of attorney goes into effect when you become unable to understand the risks, benefits or alternatives to health care recommendations from your healthcare professional.
Join us for a free workshop today! If you have questions regarding capacity or any other estate planning matters, please contact the experienced attorneys at Gaughan & Connealy for a consultation. You can contact us either online or by calling us at (913) 262-2000. We are here to help!