Why is Legal Capacity Important?
Imagine your father has dementia or Alzheimer’s. Imagine that your father comes to you and says he wants to write and sign his Will. Or he wants to sign a Deed selling the 150-acre tract of land that has been in the family since 1900. Would the collision between your father’s mental condition and his desire to sign a legal document cause you any concern? It should. Here’s why.
Your father must have what’s called the “legal capacity” to sign legal documents. In fact, he must have “mental capacity” to sign a Deed and “testamentary capacity” to sign a Will. Mental capacity and testamentary capacity are simply more specific terms related to the kind of legal document being signed.
To sign a Deed or Power of Attorney, for example, a person must have “mental capacity.” This means they must know what the document is and must be able to sign the document for its intended purpose. It’s one thing to know you are signing a Deed (a document that transfers real estate). It’s another to know that you are signing a Deed that pertains to the 150-acre tract that’s been in the family for over 100 years, and not the house and lot you are currently living in.
To sign a Will or Trust, a person must be of sound mind—he must have “testamentary capacity.” The person must know five things to have testamentary capacity. First, a person must know that the document he is signing is a Will (not a Deed or a Power of Attorney). Second, he must know the effect of signing a Will (he will be distributing what he owns upon his death). Third, he must know generally what his assets consist of (what he owns). Fourth, he must know who are his loved ones, next of kin, his family. Lastly, the person must be able to hold all of these together in his mind long enough to see their relationship to one another and to form a reasonable judgment as to the 4 component parts.
Importantly, a person must have testamentary capacity at the moment he signs his Will. In theory, he could have a lucid moment at the time he signs his Will but lack testamentary capacity both an hour before and an hour after.
It is worth knowing about legal capacity as it relates to the signing of legal documents. The more we know, the more we can prevent unnecessary disputes over invalid legal documents. Such unnecessary disputes devour a person’s time, money, and emotional energy.
In another post, I want to explain what role legal capacity plays when a person wants to change his Will, or revoke his power of attorney, or change some other legal document.