Mental Capacity Requirements in Estate Planning

Attorney Dan Krause talks about mental capacity and what it means for estate planning.

The threshold for mental capacity to sign estate planning documents is fairly low. Even though a person may have diminished capacity, they still may be legally capable of signing a will, power of attorney or a trust.

All that is required for capacity is knowledge of two things: 1) knowledge of who your family is, or knowledge of the people who would inherit from you if you had no estate plan (parents, spouse, children), and 2) knowledge of your possessions and assets like real estate, bank accounts, investments.


Hi, my name is Dan Krause and I am an attorney at Krause Estate Planning & Elder Law Center, where we help elders and their loved ones preserve assets against taxes, creditors, and long-term care costs that devastate many families.

Today, I want to talk a bit about capacity, or the mental ability of someone to create an estate plan. Now there are different kinds of capacity, but there is one specific type of capacity that my clients are concerned about often, and that is the capacity to create an estate plan. 

It's well-established that the capacity to create a will is the same as the capacity to do other estate planning. So that would be the same as the capacity to create a power of attorney, to create a trust, a healthcare document, etc. 

Many people have a misunderstanding of what capacity is. The capacity to create an estate plan is what I consider to be a fairly low capacity. So you don't have to be completely with it. You can have gone down a little bit of a slope as many of us go down towards the end of life, and still have the capacity to do estate planning. 

I want to dispel a misconception that a lot of people have, is when somebody's healthcare power of attorney is activated by two doctors who say they are no longer capable of making their own medical decisions. This does not mean that a person is necessarily unable to do estate planning.

So, I want to repeat that - just because your power of attorney for healthcare has been activated by two doctors, it does not necessarily mean that you are incapable now of legally creating any more estate planning documents. The standard for capacity is different for both of those. 

Now, let's talk about the standard of capacity for somebody to create an estate plan. You really need to only know two things:

One thing is, you need to know who is your family. Are you married? Is your spouse alive or dead? Do you have children? Are any of them deceased? What are their names? These kinds of things. Fairly basic, although some people eventually lose the ability to know those things.

The second thing you need to know in order to have capacity is, what are your assets? So you have to know what you own. If you owned a farm 50 years ago and you believe you still own that farm, then maybe you don't have capacity. But if you don't have an idea about what your real estate assets are, what your banking assets are, what your investment assets are, and any other major assets if you know what those are. Even if you only know it some days for a half an hour, some days are good days, some days are bad days - as long as when you are creating this document and signing it, like a power of attorney or trust, it is a legally signed document. 

Now, this is something that is argued about for quite a bit after someone passes away, whether they have the capacity or not and it can be quite a big mess. So, it's important to do estate planning before there is a question. But that's not completely out of the realm of what is possible or what is legal if you wait until it's in the gray area. It's risky, but estate planning is better than no estate planning. 

If you are concerned about your capacity or the capacity of your parents and you think that they might be sliding past the point of them doing estate planning, act sooner than later. Call a good estate planner, or if you don't know of one, give our office a call. 

 Schedule a consultation at (608) 344-5491

Related Posts
  • When Do I Need to Change My Estate Plan During Divorce? Read More
  • How to Successfully Pass On Heirlooms Read More
  • Can I Leave Family Members Out of My Will? Read More