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Testator's Capacity To Execute Trust Amendment Should Be Evaluated By Standard For Testamentary Capacity
July 25, 2011 | Bulletin No. 975157.1
In Andersen v. Hunt, (--- Cal.Rptr.3d ----, Cal.App. 2 Dist., June 14, 2011), a court of appeal considered whether a testator’s capacity to execute trust amendments should be evaluated by the standard for testamentary capacity or the standard for contractual capacity. The court of appeal held a testator’s capacity to execute trust amendments should be evaluated pursuant to the standard for testamentary capacity.
Wayne Andersen ("Wayne") and his wife established a trust in 1992 that named their children, Stephen Andersen ("Stephen") and Kathleen Brandt ("Kathleen"), as sole beneficiaries of the trust after their parents' death. Wayne's wife died in 1993. In 2003, Wayne amended the trust to leave 60 percent of his estate to his long-term romantic partner, Pauline Hunt ("Pauline"), and the remainder of the estate to Stephen, Kathleen, and Stephen's son. Wayne had suffered from a stroke before he amended the trust. Wayne amended his trust again in 2003 and 2004, but the amendments still provided that 60 percent of his estate would be distributed to Pauline upon his death.
After Wayne died in 2006, Stephen and Kathleen brought an action to invalidate the 2003 and 2004 amendments to the trust. The probate court found Wayne lacked the capacity to execute the trust amendments.
The court of appeal held the “probate court erred when it evaluated Wayne’s capacity to execute the trust amendments by the general standard of capacity set out in Probate Code sections 810 to 812, instead of the standard of testamentary capacity set out in Probate Code section 6100.5.” Probate Code section 6100.5 provides that a person is not competent to make a will if the person lacks “sufficient mental capacity to be able to (A) understand the nature of the testamentary act, (B) understand and recollect the nature and situation of the individual’s property, or (C) remember and understand the individual’s relations to living descendants, spouse, and parents, and those whose interests are affected by the will. Section 6100.5 also provides that a person is not competent to make a will if he or she “suffers from a mental disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individual’s devising property in a way which, except for the existence of the delusions or hallucinations, the individual would not have done.”
It is the testator’s mental state in relation to the specific event of making a will that is relevant. Periods of confusion or forgetfulness, old age, or mental feebleness are not enough to find that a testator did not have testamentary capacity. If a person has a mental disorder but has lucid periods, it will be “presumed that his will was made during a time of lucidity.”
Probate Code sections 810 through 812 set out the standards to evaluate capacity for various decisions, business transactions, and the ability to contract. Section 810 provides there is a rebuttable presumption “that all persons have the capacity to make decisions and to be responsible for their acts or decisions” and that an individual with a physical or mental disorder may still be able to perform such actions as entering into a contract or executing a will or trust.
Section 811provides, “A determination that a person is of unsound mind or lacks the capacity to make a decision or do a certain act, including, but not limited to, the incapacity to contract, . . . to execute wills, or to execute trusts, shall be supported by evidence of a deficit in at least one” mental function listed in section 811 as must also be supported by “evidence of a correlation between the deficit or deficits and the decision or acts in question.” Section 811 lists the following metal functions: alertness and attention, information processing, thought processes, and ability to modulate mood and affect. Section 811 further provides, “A deficit in the mental functions listed above may be considered only if the deficit, by itself or in combination with one or more other mental function deficits, significantly impairs the person’s ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.” (Emphasis added.) A court may take into account the “frequency, severity, and duration of periods of impairment.”
Section 812 provides, “Except where otherwise provided by law, including, but not limited to . . . the statutory and decisional law of testamentary capacity, a person lacks the capacity to make a decision unless the person has the ability to communicate verbally, or by any other means, the decision, and to understand and appreciate, to the extent relevant” the following: (1) “The rights, duties, and responsibilities created by, or affected by the decision;” (2) “The probable consequences for the decisionmaker and, where appropriate, the persons affected by the decision;” and (3) The significant risks, benefits, and reasonable alternatives involved in the decision.”
Section 6100.5 defines the mental competency required to make a will and not more generally the mental competency required to make a testamentary transfer. Stephen and Kathleen asserted that Wayne’s capacity should therefore be evaluated under sections 810 through 812 instead of section 6100.5. Stephen and Kathleen assert that sections 810 through 812 set out a single standard for evaluating “contractual capacity.” The court rejected this argument finding that pursuant to sections 810 through 812, “[m]ore complicated decisions and transactions . . . appear to require greater mental function; less complicated decisions and transactions would appear to require less mental function.”
The court found, “When determining whether a trustor had capacity to execute a trust amendment that, in its content and complexity, closely resembles a will or codicil, we believe it is appropriate to look to section 6100.5,” to decide “when a person’s mental deficits are sufficient to allow a court to conclude that the person lacks the ability ‘to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.’” The court held that “while section 6100.5 is not directly applicable to determine competency to make or amend a trust, it is made applicable through section 811 to trusts or trust amendments that are analogous to wills or codicils.”
The court found the trust amendments made by Wayne were not complex. The court concluded, “In view of the amendments’ simplicity and testamentary nature, we conclude that they are indistinguishable from a will or codicil and, thus, Wayne’s capacity to execute the amendments should have been evaluated pursuant to the standard of testamentary capacity articulated in section 6100.5.” The appellate court concluded the trial court erred when it evaluated “Wayne’s capacity under a different, higher standard of mental functioning.”
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Linda M. Monje | 661.864.3800