Mental capacity

1. Mental capacity • In this section, we will consider the requirement that testators be of “sound mind” when deciding the terms of their wills—recall that we want to carry out donor intent • 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 didn’t decide de novo, but only that 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? • 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 (p. 162) • Also, much of the evidence reflected her mental status after she executed the will (though only a few months after, p. 164)

13. What about the letter by her physician the year before the will was executed, p. 162? • Her doctor had written that she “suffered from senile dementia,” but at trial, he testified that • He was trying to help her with her telephone bill and • He wasn’t sure whether she really had dementia • Also, simply referring to dementia is not sufficient to eliminate testamentary capacity

14. 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

15. 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

16. 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)

17. 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

18. 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

19. 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

20. 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

21. 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)

22. In re Strittmater In re Strittmater, p.169 53 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

23. 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.

24. 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)

25. Breeden v. Stone (1) Breeden v. Stone992 P.2d 1167 (Colo. 2000) Petitioners Vic Sr. Vic Sr. Respondent Spicer Breeden Sydney Stone Vic Holly

26. 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

27. 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 with delusions that family members were • Spying on him • Planting drugs, bombs or listening devices in his house or cars • Otherwise threatening his life or freedom • He was suicidal

28. 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.”

29. 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 (1991) will had excluded some of them.

30. Breeden v. Stone (2) Breeden v. Stone (2) 1991 Holographic Codicil 1996 Holographic Will

31. B. Undue Influence Lord Justice Hannen

32. Undue influence • We continue our discussion of doctrines that address the question whether a will or trust is a genuine expression of donor intent • There are general principles for defining “undue influence,” but this is one of the many doctrines for which one can understand the contours of the doctrine only by reading a lot of cases that apply the doctrine

33. 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).

34. Undue influence • Inference of undue influence can be raised when • Donor was susceptibleto undue influence • Alleged wrongdoer had opportunityto exert undue influence (but doesn’t need to be present at execution of will) • Alleged wrongdoer had a dispositionto exert undue influence • There was a result appearing to be the effect of undue influence Restatement (Third) of Property: Wills and Other Donative Transfers §8.3 (2003), comment.

35. Estate of Lakatosh, p. 182 656 A.2d 1378 (Pa. Super. 1994) Rose Lakatosh Roger Jacobs Drafted Will Second Cousins Estate Lawyer

36. Estate of Lakatosh • 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. • What if Roger had not drained the estate while Rose was alive?

37. 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.

38. Presumptions & burden shifting Presumption of Undue Influence (Burden Shifting) Types of Confidential Relationships: • Fiduciary (attorney, appointed agent) (automatic) • 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 of 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 + =

39. Undue influence • States vary in what counts as a suspicious circumstance • Lakatosh required that the challenger show that the person in the confidential relationship received the bulk of the estate and that the decedent’s intellect was weakened • In California, you have to show that the undue influencer (1) was active in procuring the will and (2) "unduly" profited from it • In Tennessee, courts will look at a broad range of evidence, much like the list on page 185

40. 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

41. 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)

42. 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. 

43. 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)

44. Moses • 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 • Clarence received almost the entire estate

45. Moses • 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)

46. Moses • Why 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).

47. Kauffman, p. 191 • Robert Kauffman was a multimillionaire by virtue of inheritance and developed an intimate relationship with Walter Weiss after moving from DC to NYC to establish a life independent of his family • Between 1951 and 1958, Robert executed a series of wills, gradually giving more of his estate to Walter and less to his family. • He also wrote a letter with the 1951 will that was attached to each successive will explaining to his family why he was “eternally grateful” to Walter • Robert’s family did not like Walter, whom they thought gave Robert interfering business advice about the family-owned Kay Jewelry stores

48. In re Kaufmann’s Will In re Kaufmann’s Will247 N.Y.S.2d 664, 485 (App. Div. 1964), aff’d, 205 N.E.2d 864-865 (N.Y. 1965) Family: Kay Jewelry Robert Kaufmann Walter Weiss Robert’s townhouse at 42 East 74th Street

49. Was there undue influence, pages 184-185? • Was there a confidential relationship? • Court saw a dominant-subservient relationship • Were there suspicious circumstances? • Robert’s attitude toward his family changed as a result of his relationship with Walter • Disposition in will was unnatural? • Another case reflecting the social mores of its time • What advice would you give a client like Robert? • Adopt the partner

50. What were the facts in Lipper v. Weslow?, p. 193 • Sophie Block left her estate to her children from her second marriage, with nothing for the family of her deceased son from her first marriage • What were the grounds for a claim of undue influence? • Her son from her second marriage wrote the will (confidential relationship and suspicious circumstance) • The son got one-half instead of one-third of the estate (unnatural/unfair and therefore a suspicious circumstance) • The son did not read the will to Sophie before she signed it • The son bore ill will toward his half brother, had a key to Sophie’s house and therefore had the opportunity to prevent her from receiving cards and flowers from her deceased son’s family