56 Chapter 3 TESTAMENTARY CAPACITY I. GENERAL TESTAMENTARY CAPACITY A. Introduction: To the extent one dislikes the intestate distribution scheme, the traditional method of opting out is to execute a will. The first requirement for a valid will is that the testator have the requisite testamentary capacity. 1. Policy justifications: It is so well accepted that a testator must have capacity that it often goes unquestioned. The policy justifications are primarily intuitive. • A person who lacks capacity is not recognized as an individual for a whole host of purposes. Consistency dictates that capacity be required to execute a legal document as important as a will. A legal system that did not require capacity would run afoul of public opinion. • The aging process involves the risk that one may lose mental capacity and no longer understand the nature of his or her thoughts or actions. Requiring capacity at time of execution assures testators that the intent expressed when they have capacity will be pro tected from the risk that they may lose capacity later in life. • The requirement of capacity protects family members. Most people assume that testators normally will provide for their families. If a testator fails to leave most or all of his or her property to family members, that may be evidence that the testator lacked capacity. The capacity requirement has been criticized for elevating family protection above testamentary freedom. • The requirement of capacity protects testators from unscrupulous third parties who may try to take advantage of a testator of weakened capacity. For all these reasons, and no doubt others, every jurisdiction requires that the testator have the requisite mental capacity to create a valid will. 2. Temporal application: The testator must have the requisite capacity at the time he or she performs a testamentary act—executes or revokes a will. Lucid interval: If a person who usually lacks testamentary capacity executes a will during a lucid moment, the will is valid even though the testator lacked capacity for some period of time before and/or after executing the will (though the testator's condition immediately before and after executing the will is relevant to the issue of testator's capacity at the moment of execution). B. Requirements: To execute or to revoke a will, the testator must be at least 18 years old and of sound mind. 1. Sound mind: Sound mind requires that the testator have the ability to know (a) the nature and extent of his or her property, (b) the natural objects of his or her bounty, (c) the nature of the testamentary act he or she is performing, and (d) how all of these relate together to constitute an orderly plan of disposing of his or her property. a. Ability to know: The testator need only have the ability to know the information covered by the requirements. He or she need not actually know the information. b. Low threshold: When viewed from the perspective of the ability to know, it becomes readily apparent that the test for sound mind is extremely low. De facto, there is a strong presumption that one has testamentary capacity. 58 Chapter 3 TESTAMENTARY CAPACITY 4. Attorney's ethical duty: A lawyer has an ethical duty to assess the capacity of an individual before drafting his or her will. It is unethical to draft a will for a person who lacks capacity. But the attorney is authorized to rely upon his or her own judgment in determining whether the person has the requisite testamentary capacity. 5. Defects in capacity: Even if a person has general testamentary capacity, a person may suffer from a defect in capacity that may invalidate part or all of the will. Three possible defects in capacity may nullify part or all of the will: (1) insane delusion, (2) undue influence, or (3) fraud. 6. Remedy: If the testator suffers from a defect that causes him or her to dispose of his or her property in a way that the testator otherwise would not have, the court will strike as much of the will as was caused by the defect. II. INSANE DELUSION A. Definition: An insane delusion is a false sense of reality to which a person adheres despite all evidence to the contrary. 1. Delusion: A delusion is a false perception of reality. At one level, a delusion is nothing more than a form of a mistake. 2. Mistake: As a general rule, courts do not correct mistakes. If they did, every time a person was left out of a will that he or she expected to be in, the person could claim there must have been a mistake and ask the court to rewrite the testator's will to include the person. There is general agreement that courts should not rewrite testators' wills. The process is too speculative, involves high costs of administration, and opens the door to fraudulent claims. B. Jurisdictional split: Two different doctrinal approaches have evolved with respect to what con stitutes an insane delusion. 1. Majority: A majority of jurisdictions apply the rational person test to determine what con stitutes an insane delusion. If a rational person in the testator's situation could not have reached the same conclusion, the belief is an insane delusion. 2. Minority: A minority of the jurisdictions apply the any factual basis to support test to determine what constitutes an insane delusion. If there is any factual basis to support the testator's belief, it is not an insane delusion. 3. Differences: At first blush, the two approaches appear quite different. The majority arguably is broader and less protective of a testator's intent, permitting a finding of insane delusion even if some evidence supports the testator's position. 4. Similarities: On the other hand, one could argue that the two tests are closer than one might think. The majority test is that the belief has to be one that a rational person in the testator's position could not reach (not would not). Under the minority approach, the belief is not an insane delusion if there is some factual basis to support the belief. If there is some factual basis to support the testator's belief, then arguably a reasonable person could reach the same con clusion as the testator based on the factual support. The majority and minority approaches may not be as different as they first appear. 5. Traumatic event: Although not an explicit part of either test, the cases tend to indicate that if a traumatic event in a person's life alters how he or she views the world, or at least part of the 60 Chapter 3 TESTAMENTARY CAPACITY 3. Protection of testator's intent: The "might have affected" test for causation is so low as to be almost always satisfied. The "but for" test arguably is more protective of testator's intent, requiring a showing that the testator would not have disposed of his or her property as he or she did if the testator did not have the insane delusion. 4. Example: In In re Honigman, assuming the court concludes that the testator's belief that his wife was being unfaithful constitutes an insane delusion, there is still the issue of causation. a. "But for" analysis: The question is whether but for the alleged insane delusion, would the testator still have disposed of his property as he did? The testator arguably left his property to his relatives because they were poor and his wife was independently wealthy, not because of his belief that she was being unfaithful. Under the "but for" test, there is a strong argument there is no causation. b. "Might have affected" analysis: The issue is whether the testator's belief that his wife was being unfaithful might have affected his decision not to leave more than the bare minimum to her. The "might have affected" test is so low, the contestants will almost always have presented enough evidence for it to go to the jury. c. Court's analysis: In the Honigman case, New York followed the "might have affected" approach, and the jury concluded that the belief might have affected the testator's will. The court struck the entire will. 5. Fact sensitive: Both the majority and the minority approaches to whether a belief constitutes an insane delusion are extremely soft, fact-sensitive doctrines. Insane delusion issues are more about knowing how to marshal the facts and making the arguments pro and con than about predicting with 100 percent certainty whether a particular belief constitutes an insane delusion. The more preposterous the belief, the more likely it is to be called an insane delusion. 6. Religious or spiritual beliefs: Although not explicitly part of the doctrine, the cases indicate that generally courts and juries are reluctant to apply the doctrine to religious or spiritual beliefs. This is intuitively understandable. In light of the principle of separation of church and state, many people are uncomfortable with the idea of courts and juries evaluating how "reasonable" a person's religious or spiritual beliefs are or whether any factual basis supports these religious or spiritual beliefs. 7. Unnatural disposition: Because the doctrine of insane delusion is so fact sensitive, some have argued that it permits juries to substitute their intent for the testator's intent. This is particularly true where the testator's intent constitutes an "unnatural disposition"—that is, not what a typical person would do under the circumstances. Although an unnatural disposition does not itself constitute an insane delusion, at a minimum it opens the disposition to attack, thereby forcing the estate to defend against the claim. a. Trial vs. appeal: At least one study found that where there is an unnatural disposition, a jury is likely to find the testator lacked capacity for one reason or another, only to have the court of appeals reinstate the will in approximately half of the cases where the jury found the will invalid. b. Potential for litigation: Anytime there is an unnatural disposition in the testator's will, the will arguably is subject to attack for lack of capacity or defect in capacity. Because the capacity and defect in capacity doctrines are so fact sensitive, it is virtually impossible to 62 Chapter 3 TESTAMENTARY CAPACITY He lived next door to the testatrix, he was the attorney who drafted the will, he bore malice toward his predeceased half-brother, and he had a key to the house. Testatrix was 81 years old when she signed the will. She did not read the will or discuss its terms when she signed it. She died only 22 days later. The will contained a paragraph that stated that the testatrix disinherited the grandchildren because they and their mother had been "most unfriendly" to her since the death of her son, though there was conflicting evidence as to the accuracy of this assertion. Although there was evidence that showed the testatrix was susceptible (due to her age and dependency upon her son), that the son had the opportunity (he lived next door, he was an attorney, he drafted the will, and he had a key to the house), and motive (he disliked his deceased half-brother and he took more under the will), the court ruled there was no causatiion The court noted that for years the testatrix had told a number of different people, when the son was not present, that she intended to disinherit her grandchildren because of their behavior. D. Burden shifting approach: Because there is rarely direct evidence of undue influence, and the defendant is in the best position to present whatever evidence is available, most jurisdictions have a "burden shifting approach" to undue influence. If the elements of the burden shifting doctrine are satisfied, a presumption of undue influence arises, and the burden shifts to the defendant to rebut the presumption. 1. Rule statement: The burden shifting doctrine varies from jurisdiction to jurisdiction. In many jurisdictions, the presumption of undue influence arises if: • there was a confidential relationship between the defendant and the testator; • the defendant receives the bulk of the testator's estate; and • the testator was of weakened intellect. (Some jurisdictions put more emphasis on whether the defendant was active in the procurement or execution of the will, either substituting it for the third requirement or adding it as a fourth requirement.) 2. Restatement (Third) of Property, Donative Transfers: The Restatement (Third) provides that while a confidential relationship is not enough to raise a suspicion of undue influence, a confidential relationship coupled with suspicious circumstances are sufficient to raise an infer ence of abuse of the confidential relationship. All relevant facts may be taken into account in considering what constitutes suspicious circumstances. 3. Burden of proof: If these requirements are satisfied, a presumption of undue influence arises and the burden shifts to the defendant to rebut the presumption. 4. Confidential relationship: There is no bright line for what constitutes a confidential relation ship, but at a minimum the testator has to confide in the other party. 5. Example: In the Upper case, it is unclear whether the presumption would arise. There was a confidential relationship—Frank was her son and attorney. It is unclear whether he took the "bulk" of her estate. He received more than he otherwise stood to receive, though he took only half the estate. It is questionable whether the testatrix was of weakened intellect. She was 81 years old, but the court noted that she was a person of strong will and physically active until the day she died. On the other hand, she lived alone and was dependent on her son, who lived next door, for a number of activities. But even if the presumption of undue influence arose, the 64 Chapter 3 TESTAMENTARY CAPACITY approach arguably is more protective of no contest clauses, creating a narrower exceptiio to their enforcement. 2. Inter vivos trusts: Another way a person can try to protect his or her estate plan is to use an inter vivos trust instead of a will. As a practical matter, using an inter vivos trust increases the chances that the testamentary scheme will survive a challenge. Benefits: The principal advantage of using an inter vivos trust, as opposed to a will, is its temporal nature. Because the trust is established inter vivos and engages in inter vivos transactiion with third parties during the settlor's lifetime, it is harder to strike down. If a will is challenged and held invalid, no transfers have to be undone. All that happens is that the transfers proposed in the will are not given effect. If an inter vivos trust is challenged after the settlor's death and held invalid, the court faces the daunting task of undoing potentially years' worth of inter vivos transaction. Courts are more unlikely to hold an inter vivos trust to be invalid years after its creation than they would be to hold a will invalid before it is given effect. 3. Explanatory statement: If one anticipates a will contest, the urge is natural to include a statement in the will explaining why the testator did what he or she did in the hope that such a statement would either deter a will contest or help to convince the trier of fact that the provisions of the will truly are the testator's intent. Including such a statement in the will, however, probably increases the possibility of a lawsuit: • If the statement portrays a family member poorly, the person may feel the need to contest the will just to defend him-or herself. • If the statement gives reasons for the testator's actions, the testator needs to be absolutely sure that each and every reason given is accurate and defensible. Any inaccuracy can be used to raise issues of capacity and/or undue influence. • If the statement libels a person, the statement can be the basis for a claim of testamentary libel. Recommendation: If an explanatory statement is appropriate, it should not be included in the will, which becomes a public document. Instead, the explanatory statement should be a private letter to those who need the explanation. This reduces the chances that anyone will feel the need to sue to clear one's name and minimizes any possible damages if the statement is libelous. Moreover, the statement should favor general statements of explanation as opposed to details and incidents. F. Gifts to attorneys: Gifts to the client's attorney, particularly if the attorney drafted the instrument, smack of impropriety. Such gifts naturally raise questions as to whether it was truly the client's wishes or whether the gift was the result of undue influence or fraud on the part of the attorney. Attorneys are skilled in the subtle art of persuasion, so the client may never realize what is happening; the attorney owes a fiduciary duty to the client, and such gifts appear to conflict with that duty; and as the drafter-taker it would be easy for the attorney to fraudulently slip the gift into the will. 1. Majority approach: The general rule is that any time an attorney who drafts an instrument receives a substantial gift under it, ^.presumption of undue influence arises unless the attorney is related to or married to the client. Heightened burden: Most jurisdictions require a heightened burden of proof to overcome the presumption, requiring clear and convincing evidence that the gift was truly the testator's intent. 66 Chapter 3 TESTAMENTARY CAPACITY that a lawyer "shall not prepare an instrument giving the lawyer or a person related to the lawyer ... any substantial gift from a client, ... except where the client is related to the donee." The comments to the rule recognize that before a client makes a gift to his or her attorney, the client should have the detached advice of an independent attorney. Disciplinary actions for violating the rule range from suspension to disbarment. IV. FRAUD A. Rule: Fraud occurs where someone intentionally misrepresents something to the testator, with the intent of influencing the testator's testamentary scheme, and the misrepresentation causes the testator to dispose of his or her property in a way that he or she would not have otherwise. Misrepresentation: A person must intentionally misrepresent something to a testator, knowing it to be false when he or she makes the misrepresentation. B. Fraud in the inducement: Fraud in the inducement occurs when a person misrepresents a fact to the testator for the purpose of inducing the testator to execute a will with certain provisions, or for the purpose of inducing the testator to revoke a will. The key is that the misrepresentation does not go to the terms of the will per se, but rather concerns a fact that is important to the testator and may induce the testator to dispose of his or her property differently in light of the misrepresentation. C. Fraud in the execution: Fraud in the execution occurs when a person misrepresents the nature of a document the testator is signing. Fraud in the execution occurs when either a person tricks another into signing a document that purports to be the signer's will, but the signer does not realize it, or when the testator realizes he or she is signing his or her will, but the person mis represents some of the contents of the will. 1. Mens rea: The misrepresentation must be made knowingly and for the purpose of influencing testator's testamentary scheme. If the misrepresentation is made as a practical joke, with no purpose other than a practical joke, and the testator changes his or her testamentary scheme based upon the misrepresentation, technically the fraud doctrine should not apply. Significance: The requirement that the misrepresentation be made with the purpose of influenccin the testator's testamentary scheme arguably is more of a theoretical requirement than a practical requirement. There rarely is direct evidence of the party's intent at the time he or she makes the misrepresentation. The jury is free to draw whatever inferences it thinks appropriate from the circumstances surrounding the making of the misrepresentation. The jury is even free to disbelieve self-serving statements made by the party who made the misrepresentation. 2. Causation: The fraud must cause the testator to dispose of his or her property in a way that he or she would not have otherwise. 3. Remedy: The remedy for fraud depends on the effect of the fraudulent misconduct. a. Fraudulent provisions: The norm is that the fraud will cause the testator to execute a will he or she otherwise would not have. In such cases, the remedy is to strike as much of the will as was affected by the fraud or, if necessary, to strike the whole will. b. Fraudulent failure to revoke: If the fraud causes the testator not to revoke a will (or clause) that he or she otherwise would have revoked, the appropriate remedy is to strike the will (or clause) that the testator would have revoked but for the misconduct. 68 Chapter 3 TESTAMENTARY CAPACITY c. Longer statute of limitations: One of the characteristics of the probate process is a shortenne statute of limitations. Notice is given to creditors to bring their claims within a shortened statute of limitations or their claims will be forever barred. Claims against the will likewise must be brought within a shortened time period or they are forever barred. The tort statute of limitations, however, does not begin to run until the party discovers or should have discovered the misconduct. Quiz Yourself on TESTAMENTARY CAPACITY 13. George is an elderly gentleman and very successful businessman, but he has been very lonely since the death of his wife. His children are grown and live out of town. One evening, George meets Anna Nicoli, a woman young enough to be his daughter. Anna Nicoli, an ex-Playboy bunny, uses her persuasive powers to convince George that what he feels is true love. George proposes to Anna Nicoli, and she agrees. They run off to Las Vegas where they are married. They spend the rest of the night celebrating. George drinks enough champagne to get so drunk he does not know what he is doing. Anna Nicoli pulls out a will, has George declare that it expresses his testamentary wishes, and has him sign it in front of two of her bridesmaids (her best friends). Later that night, George slips into a coma and never recovers, dying several days later. Who takes George's probate property? 14. While vacationing in Scotland, Ned is out boating on Loch Ness, when out of the blue his boat capsizes and he almost drowns. When he comes to, he tells everyone that the Loch Ness monster caused the accident. He swears until he is blue in the face that he saw the beast as the boat capsized. His buddies razz him that he just can't handle a boat in choppy waters. When he dies, his wife and kids are shocked to learn that he left all of his property to the Society for the Discovery of the Lock Ness Monster. His wife wants to challenge the will. What is the wife's best claim for challenging the will, and what are her chances of succeeding? __________________ 15. Pattie is kidnapped by a group of ecosystem revolutionaries called the Redwood Liberation Army. During her kidnapping, she is subjected to a series of psychological brainwashing techniques, includ ing beatings and food and light deprivation. After weeks of such torture, Pattie becomes a follower of the movement and denounces her family's publishing empire as being a waste of our natural resources. She properly executes a will leaving all of her property, including her share of the family's publishing empire, to Ima Treehugger, the leader of the Redwood Liberation Army. Sadly, during a "tree sit-in," Pattie is stung to death by a swarm of killer bees. Ima offers Pattie's will for probate. Pattie's family wants to challenge the will. What are their best arguments, and what is the most likely result? 16. Nogood Nolan is an attorney. His office is across the street from Retirement World, a seniors-only retirement community. Every day Nolan goes to Retirement World for breakfast, lunch, and dinner, befriending little old men and woman who have been moved there by their children, who do not have enough time to care for them. After befriending them, he convinces them that their children really do not care for them and that he is their best friend. He persuades them to execute a new will, giving a substantial gift to him. He refers them to a good friend of his whose office is in the same suite as