Testamentary Capacity Matters, No Matter Your Age

Testamentary capacity sounds like one of those boring legal terms most people want to ignore. In our profession, this issue presents itself with increasing frequency. No matter your age, it matters to you and your economic well-being.

The problem doesn’t just relate to a person’s will being contested. Unfortunately, options for long-term care and how it’s paid for can become severely limited for those who fail to plan in advance.
As estate planning specialists we spend a great deal of time helping families, both young and old. The goal is to honor their wishes and protect their assets, while preparing for costs related to long-term care.

What is Testamentary Capacity?

Testamentary capacity, in simple terms, relates to an individual’s mental ability to make important decisions regarding their affairs. Merriam-Webster offers this definition: “the capacity in executing a will to understand the nature and extent of one’s property and how one is disposing of it and to recognize the natural objects of one’s bounty.”

Why it’s More Important Now

Most of our clients are fully functional, with no cognitive issues. With increasing frequency, however, we’re seeing them experience various stages of dementia. We’re not surprised, considering statistics cited by the Alzheimer’s Association.

  • 5.8 million Americans are currently living with Alzheimer’s disease
  • By 2050 that number is expected to balloon to nearly 14 million\
  • Every 65 seconds, someone in the US develops the disease
  • Currently 1/3 of all seniors dies with some form of dementia
  • Alzheimer’s is the 6th leading cause of death in the US

The problem is heartbreaking, but for more reasons than the obvious. We see the pain families go through in dealing with a relative’s cognitive impairment. That pain is compounded when estate documents can no longer be executed. The financial impact related to long-term care funding can be severe.

It’s Not Just About Age

Testamentary capacity conjures images of an aged senior. That’s not always the case. Diminished capacity can be the result of disease or a serious accident at work or on the highway.

Think about Brad, a young executive with a promising future and a beautiful family. A tragic motorcycle crash left him with a brain injury. Signing legal documents on his own behalf is no longer possible. Fortunately, he had put his affairs in order before the accident.

Two Reasons Testamentary Capacity Matters

At least two reasons compel us to urge families to establish their estate plan sooner, rather than later. While neither are a certainty, we’ve seen many unexpected events unfold. Both are a distinct possibility. Consider these two points:

  1. Your will can be contested, especially if your cognitive ability is in question
  2. Early planning has serious financial advantages related to long-term care costs

Your Will Can Be Contested

Any person of age (18 years or older) is legally capable of drafting a will. The legal assumption is that, unless otherwise proven, the individual (the testator) represented by the document is of sound mind and fully capable of making important decisions about their affairs.

It would be great if everyone played nice after the reading of a will. Although it takes time, trouble, and expense, an individual’s will is sometimes challenged by a spouse, a sibling, a child, or someone named in the will. A will can be challenged for one of four reasons:

  • The will violates state law
  • The testator was unduly influenced
  • Fraud was somehow involved
  • The testator lacked testamentary capacity

Do your family a favor. Complete your estate plan early, while your state of mind is unquestionable. Eliminating the possibility of a contested will is reason enough to get it done now.

Implications Related to Long-Term Care Costs

Concerned about losing all your assets due to long-term care costs? One of our specialties is helping individuals preserve their assets in those situations. Their quality of life is improved as they age, and they have something left to pass on to their loved ones.

We employ a blend of legal and financial strategies designed to help people take full advantage of government benefits to pay for long-term care. Details vary from one situation to another, but each case has one thing in common; advance planning.

Executing a proper will is only part of the plan. Also required are a revocable trust or an irrevocable trust, powers of attorney, and a few other documents we help you implement.
The most important thing to know is this: Once you have a cognitive impairment, the game starts to change. The onset of dementia doesn’t necessarily prevent you from executing an effective plan. At some point, however, the door of opportunity closes. The best plan is executed at least five years prior to the start of your long-term care bills.

The Four Elements of Mental Competency

The legal system applies a standard to determine whether an individual has the mental acuity to make important decisions and execute legal documents. In short, the question is whether they can execute a valid will. The individual (testator) must demonstrate the awareness of four things:

  1. What a will is, and its impact
  2. A general idea about the property they own
  3. Their relatives and who is included in their will
  4. The general plan of distribution

In many cases none of these things are in question. But we typically encourage families to get their affairs in order long before signs of cognitive impairment show up.

Make Your Plan Now

Testamentary Capacity isn’t just a boring legal term. It’s your door of opportunity to create an effective estate plan, preserve your assets, and maximize benefits that are rightfully yours.
Want to know more? Call Quinn Estate & Elder Law at 636-686-6790.