A person’s ability to comprehend things happening around them is referred to as “mental capacity.” With legal proceedings in particular, the term capacity generally refers to as the ability to understand the nature and consequences of the legal proceedings. In the legal context, it can also refer to whether the person is competent enough to enter into a legally binding agreement. If this becomes an issue, you may need incapacity planning.
“Capacity” in the area of estate planning
When it comes to estate planning in particular, the term “capacity” generally refers to your ability to manage your personal affairs, whether it’s financial or medical. But there may come a time when you need assistance making those important life decisions due to an illness or injury that leaves you incapacitated. Even in temporary situations, an injury or illness could diminish your capacity to the degree that you can no longer make decisions.
What does legal incapacity mean?
In order to execute a contract, will or other legally binding document, an individual must be considered “legally competent.” In addition to the mental component, capacity also depends on age and maturity. For example, in most states you must have reached the age of majority in that state in order to enter into a legally binding contract. The age of majority in California is eighteen (18). This requirement is based on the general understanding that, because of their immaturity, minors require more protection from legal liability because they are too inexperienced to properly understand and negotiate a legal document.
Common sources of Mental Incapacity
There are certain medical conditions, such as Alzheimer’s, psychosis, and dementia, which are commonly recognized for causing diminished mental capacity. The aging process in generally is also a common culprit. It is important to remember, though, that a determination of incapacity should never be based solely on a medical diagnosis. Not every medical condition can be said to presumptively result in a lack of mental capacity.
Temporary Incapacity can also be an issue
In some situations, incapacity is only temporary in nature. Certain medical conditions or trauma may render an individual incapacitated only until the condition or trauma has been resolved. At that point, that individual’s capacity can be restored. Intoxication is an example of a temporary condition that causes incapacity. Intoxication is obviously resolved once the person is sober. The incompetency of a minor is another example which lasts only until the minor reaches the age of majority. Comas or some other state of unconsciousness may also be temporary.
The definition of incapacity under California law
Under California law, an incapacitated person is defined as follows:
[a] person is of unsound mind or lacks the capacity to make a decision or do a certain act when there is a deficit in at least one of the following mental functions and the deficit significantly impairs the person’s ability to understand and appreciate the consequences of his or her actions with regard to the act or decision in question.
The statute also lists several mental functions relating to alertness and attention, information processing, thought processes, and the ability to modulate mood and affect.
The court makes the ultimate determination of incapacity
It is always the court that makes the ultimate determination of incapacity. In most cases, the court requests medical opinions from experts who have examined the individual. When there is no challenge to an incapacity determination, the court can rely solely on the medical records. But, if either relatives or the individual himself or herself disputes a finding of incapacity, the court will likely request an independent psychological analysis in order to obtain additional support for the decision.
What to do if you believe a loved one is incapacitated?
Someone who is mentally impaired could start to show signs of needing help in their personal affairs. Commonly, they may become increasingly forgetful or disoriented. If this happens, you should consider what steps should be taken to help meet your loved one’s needs. For some, this can be done informally through the help of family or friends. However, the situation may require more formal control of your loved one’s affairs. Conservatorship is one solution, but it is not the easiest or least expensive option available. This is where incapacity planning becomes important.
A power of attorney may be a better choice
One viable alternative to a conservatorship is a power of attorney for health care and/or finances. A power of attorney is not a very complex legal document and it is much less expensive than a conservatorship, which is court-supervised. Furthermore, with a power of attorney you loved one will retain the ability to choose their own agent to act on their behalf, rather than having a conservator appointed by the court. Consider making a power of attorney a part of your incapacity planning. Another, and many times better, option is the creation of a living trust-based estate plan.
If you have questions regarding incapacity, or any other estate planning needs, contact the Northern California Center for Estate Planning and Elder Law for a consultation, either online or by calling us at (916) 437-3500.