Special Needs Planning Newsletter: Special Needs Planning and Capacity
Not a week goes by that I am not asked to make a judgment call about a client’s capacity to sign a will, power of attorney, or other legal document. In fact, every time I sit down with a client to sign any legal document, I must make a determination about that client’s capacity to sign.
In most cases, it is easy to determine that the client understands the language and purpose of the document and is intentionally signing without pressure. Occasionally, the determination is not as simple. Perhaps the client has recently had a stroke and urgently needs an updated power of attorney during recovery so family members can assist with paying bills, or sometimes the client has a diagnosis of dementia and has been instructed by physicians to update estate planning documents. In cases like those, or when any impairment is suspected, we take additional steps to ensure that the client understands the document and is making the decisions freely.
The members of our special needs planning team regularly make determinations regarding a client’s capacity to make planning decisions. Given the prevalence of these issues, I recently spoke with two physicians to get their perspective on capacity and how they make the determination. The discussion was eye-opening and highlighted some critical differences in the ways the legal and medical professions view capacity. Capacity is a medical determination of ability to make decisions. It is different from competence, which is a legal determination made by a judge.
There are several tools used by physicians to assist with the determination of capacity, but the physicians I met with stressed that none are perfect. Drawing a clock face as a part of a Mini-Mental Status Examination (‘MMSE’) has little to do with the decision to appoint a child as agent under a financial power of attorney, for example. Physicians will consider the client’s ‘baseline,’ since capacity can vary over hours or days. For example, we have all heard of individuals who ‘sundown’ later in the day but function more normally in the morning. For this reason, the existence of a dementia diagnosis does not automatically translate to a client being unable to make decisions. The gravity of the decision is also a factor in the determination of the client’s capacity.
A medical professional often looks at four components to determine the capacity to make decisions:
- The ability to communicate a choice
- The ability to understand relevant information
- The ability to appreciate one’s own situation and consequences of a decision
- The ability to reason rationally
Using these four factors, capacity is decision-specific.
In the context of special needs planning when capacity is a potential issue, we will schedule discussions with clients when they are most alert and communicative. We may advise clients who anticipate litigation or a challenge to their planning to schedule an evaluation by a physician at or immediately preceding the execution of the planning documents. We may encourage clients whose capacity may be questioned to explain changes to their planning to the witnesses prior to signing. We may also suggest that the discussions with the witnesses and the signing of documents be recorded on video or voice recording.
Our primary objectives are to ensure that our clients fully understand the documents being signed, that they can explain why those documents properly reflect their choices, and that the decisions made in those documents are their own, particularly in the context of special needs planning. If you or someone you know have questions about capacity or need help navigating special needs planning, please contact our team at Chambliss. We’d be happy to help.