What Does It Mean to Lack Capacity for Conservatorship and Trust and Estate Plan Documents in California? (Part 2 of 3)

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In this post we’ll continue to discuss capacity (and incapacity). Specifically, we’ll discuss the capacity necessary to sign trusts, wills, powers of attorney for financial management (or asset management), and powers of attorney for health care (or advance health care directive). This is the second post of a 3-part post series.

In the we discussed the lack of capacity for managing someone else’s affairs through a conservatorship court proceeding or through her trust and powers of attorney.

What Is Lack of Capacity for Signing a Trust, Will, and Powers of Attorney?

A trust, power of attorney for financial management (or asset management), and power of attorney for health care (or advance health care directive) ensure that things go smoothly for you if you become incapacitated in the future. A trust and will also typically provide for distribution of your assets after your death. Naturally, you need to have sufficient capacity to sign these documents.

So let’s discuss the level of capacity that you must have to be able to sign each of these types of documents and have those documents be enforceable:

  1. Trust: Only 1 California statute expressly states a level of capacity required for signing a valid trust. Because that statute is involved with other issues, we will discuss that statute in the. Further, a trust is a type of contract. It also is similar to a will because both documents typically provide for distributing assets after death. California law states the required levels of capacity for contracts and wills, as discussed below. To sign a valid trust, you must satisfy the legal requirements for both contracts and wills.
  2. Will: To have capacity to execute a valid and enforceable will, you must understand the nature of the testamentary act. (That means you understand that signing a will directs where your assets will go at your death.) You also must understand and recollect the nature and situation of your property. Finally, you must understand your relations to living descendants, spouse, parents, and people whose interests are affected by the will.
  3. Power of Attorney for Financial Management (or Asset Management): You may sign a power of attorney for financial management if you have the capacity to contract.

    All adults are capable of contracting unless of “unsound mind” or deprived of civil rights. There is a rebuttable presumption that an individual is of unsound mind if the person is substantially unable to manage her own financial resources or resist fraud or undue influence. (This is not to be proven solely by isolated incidents of negligence or improvidence.) This is the definition of incapacity for creating a California conservatorship of the estate for someone. You may recognize it from our. So if you are the subject of a conservatorship of your estate, then you presumably are of unsound mind.

  4. Power of Attorney for Health Care (or Advance Health Care Directive): To have capacity to execute a valid and enforceable power of attorney for health care (or advance health care directive), you must “appear to be of sound mind and under no duress, fraud, or undue influence . . . .” Also there is a rebuttable presumption that an adult has capacity to make health care decisions, give and revoke advance health care directives, and designate and disqualify surrogates. (Surrogates are the designated decision-makers in this context.)

There is more to the story as we will discuss in the in this 3-part series.

The will discuss some capacity rules that overlay all of the rules discussed previously.

Get Help from an Experienced Trusts and Estates Attorney

Making a mistake assessing a person’s capacity regarding conservatorship court proceedings and trust and estate plan documents could be catastrophic. If a person lacking capacity signs a trust or other estate plan documents, then someone may be able to invalidate the trust or other documents after her death (or at another time when these documents are needed) through court litigation.

Hiring an attorney experienced with conservatorship court proceedings and trusts can help avoid a lot of this. In addition, the advice and guidance of an attorney experienced with conservatorship court proceedings and trusts is invaluable for attaining your goals in these types of cases.

At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients achieve their goals in conservatorship and trust cases. Contact Meinzer Law Firm, P.C., in Torrance to assist you with your Los Angeles County probate court case.

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