There is a consensus that there will be more estate litigation in the years to come. The parents of the baby boomers are now in their 80s and 90s (or even older) and transferring substantial wealth. The oldest baby boomers are about to begin turning 70 years of age. Never before have so many people reached retirement age. Because of divorces, there are more families with step-parents, sometimes giving rise to tensions between surviving spouses and children of a previous marriage. More people now own their retirement accounts rather than having pensions that do not go to the next generation.
In 1900, there were approximately 3 million people in the United States 65 years old or older. That was just over 4 percent of the population. In 2010, those amounts had increased to over 40 million and 13 percent, and it is projected that they will increase by 2050 to 88 million and over 20 percent.1 The average life expectancy of Americans at age 65 is now more than 19 years.
In 2010, more than 5 million people had Alzheimer’s disease. It is projected that in 2050, more than 19 million will.2
Lawyers should be aware that there will be increased opportunities for litigation involving estates. Situations involving the interplay between dementia, capacity, and susceptibility to undue influence are likely to be increasingly the subject of estate litigation. There may also be more questions raised by survivors as to whether estate planning attorneys have fulfilled their standard of care.
Although an individual is presumed to have capacity to make a will,3 the presumption can easily be tested. “It is of course elementary that this right to make a will must be exercised when the testator has testamentary capacity and when he is not subjected to undue influence.”4
The test for testamentary capacity in Wisconsin has been virtually unchanged since Holden v. Meadows in 1872.5 More recently, in Estate of O’Loughlin,6 the court set forth the elements as follows:
“The testator must have mental capacity to comprehend the nature, the extent and the state of affairs of his property. The central idea is that the testator must have a general, meaningful understanding of the nature, state and the scope of his property, but does not need to have in his mind a detailed itemization of every asset; nor does he need to know the exact value of his property. A perfect memory is not an element of a testamentary capacity.…
“The testator must know and understand his relationship to persons who are or who might naturally or reasonably be expected to become the objects of his bounty from which he must be able to make a rational selection of his beneficiaries. He must understand the scope and general effect of the provisions of his will in relation to his legatees and devisees. Finally, the testator must be able to contemplate these elements together for a sufficient length of time, without prompting, to form a rational judgment in relation to them, the result of which is expressed in the will.”
Each of the elements of a capacity claim create fact-intensive tasks for the lawyer. So, for example, with respect to the testator’s comprehending the extent and nature of her property, she might have made statements to her lawyer, her banker, her coworkers, and her life insurance agents. If those statements vary to a significant degree, it may be proof that the testator did not comprehend the extent of her property.
The Wisconsin Supreme Court has found that illiteracy alone is not indicative of mental incapacity.7 The testator in Cutler was 76 years old when he executed his will.8 The court recognized that he was “manifestly a peculiar man, with marked characteristics and some eccentricities” and that he “was illiterate and ignorant” and simple mannered.9 He also occasionally had “bad spells, and would faint or have fits, or make foolish remarks,” and his memory was not as sharp as when he was younger.10
The court found it crucial that, despite the testator’s illiteracy and other quirks, he was able to manage his own property and make conveyances of that property in the 10 years after he executed his will and before he died, without any question regarding his mental capacity to transact business.11 Ultimately, the testator’s illiteracy, even when combined with his other characteristics and fading memory, was insufficient to establish mental incapacity.12
The key to testamentary capacity is not the testator’s ability to read or write, but his or her ability to have a “general, meaningful understanding of the nature, state, and the scope of his property.”13 Testamentary capacity does not require the testator to know the exact value of his or her property or to have a perfect memory.
Effect of Impairment on Testamentary Capacity. In some cases, the testator may even suffer from significant physical or mental impairment and still meet the requisite elements of testamentary capacity. For example, in Estate of O’Loughlin, the testator had Parkinson’s disease, and a guardian was appointed for him 43 days before he executed his will.14 Objectors to the will argued that because of the testator’s advanced Parkinson’s disease, he was physically and mentally incapable of managing his property and that his incompetency was evidenced by the fact of the appointment of the guardian.15
The court, which recognized that the testator suffered from advanced Parkinson’s disease, held that the appointment of a guardian is “not controlling on the issue of testamentary capacity,” and that even if a person suffers from physical and mental impairments, he or she may still be competent to make a valid will during a lucid interval between periods of sickness.16
Similarly, in In reEstate of Evans, the Wisconsin Supreme Court upheld the validity of a will executed by a testator who had only a sixth-grade education and who worked much of his life on a farm.17 The testator was in failing health, was forgetful and frequently confused, and had been hospitalized a number of times shortly before he met with his lawyer to draft his will.18 When the lawyer and the testator met, the testator identified his intended beneficiaries and discussed why he made certain beneficiary designations.19 After the will was drafted, the lawyer reviewed the will with the testator paragraph by paragraph and asked questions to confirm that the testator understood the will.20
The court found that the testator’s physical and mental condition, and even the fact that the testator was unable to manage his own business affairs near the end of his life, were not dispositive in establishing mental incapacity.21 Rather, the court held that the evidence suggested that the testator had a meaningful understanding of the nature, extent, and state of his property when he executed his will, and therefore he did not lack the requisite testamentary capacity.22
Comprehension of Language in Will. Although it is crucial that the testator understand his or her will and its scope and what it purports to do, “it is not necessary that he understand all the legal terms or even the language of the will” to have the requisite testamentary capacity.23 Rather, a will is valid “if drawn in accordance with the instructions of a person of sound mind, who had a full and accurate knowledge of the contents of the will.”24 The Wisconsin Supreme Court in Gaudynski emphasized that:
“The important point is that if the instrument expresses what the testator has in mind and the testator so understands his will, that is a sufficient relationship between the written word and the mental state.… In making his will a testator may rely upon his attorney to carry out his instructions and to use legal language which the attorney believes will effectuate the testator’s purposes. If the testator is accurately informed of the contents of the will prepared in accordance with his instructions before he signs it and he acknowledges the will represents his thinking, that is sufficient.”25
Making a statement to one’s lawyer that the value of a business is $2 million, but at around the same time telling a life insurance agent that the value of the business is $30 million, may be evidence that would call into question the testator’s mental capacity to comprehend the extent and nature of his or her property. On the other hand, consistent statements may be evidence of comprehension.
Understanding the persons from which one must make a rational selection of his beneficiaries can be clouded by history and second marriage with children from a first marriage. While the persons are probably known, the rational selection can be fact intensive. Family, friends, and significant changes in dispositive plans can call into question the rationality of choices. For example, a testator gets divorced and changes his dispositive plan so that his children are the beneficiaries. Then the testator gets married and a short time later the wife receives everything. The major changes may call into question the testator’s rational judgment.
Finally, to assess capacity, the testator must contemplate each of these elements together for a sufficient length of time to form a rational judgment. If some level of dementia is present, this element may be at issue. A lawyer might not know if an individual is seeking treatment for memory issues. An individual who seems to a lawyer not to have any cognitive problems might be viewed differently by health care providers or even, years later, the finder of fact in a trial.
Susceptibility to Undue Influence. Even if there is not sufficient evidence to show a lack of capacity, diminished capacity would be relevant to susceptibility to undue influence, an element of an undue-influence claim. A deteriorating physical or mental condition can be evidence of susceptibility to undue influence.
Although they are not determinative, the primary factors relevant to the testator’s susceptibility to influence are the testator’s age, personality, physical and mental health, and ability to handle business affairs.26 The increasing vulnerability of the testator can be evidence of susceptibility, the essence of which is that “the testator was unusually receptive to the suggestions of others and consistently deferred to them on matters of utmost personal importance.”27 The lack of the ability to resist the influence of another person can be evidence of susceptibility.
Testamentary Capacity: A Sliding-scale Approach
Applying a sliding-capacity scale, estate planning lawyers could embrace a range of possibilities for assisting clients with dementia or cognitive impairments, rather than the dichotomy of either agreeing to assist the client or turning him or her away.
By Christa D. Wittenberg
“A testator may not have the testamentary capacity to make a complicated will and yet have the necessary capacity to make a simple will. The test is whether he had the mental ability to make the specific will in question.”1
On one hand, this simple sentence from Estate of Gaudynski seems fairly intuitive: Just as a person might have the capacity to do multiplication but not calculus, or the capacity to hold a social conversation about astrology but not write a thesis on it, it seems like common sense that a person’s testamentary capacity might be on a sliding scale.
On the other hand, this principle could be a minefield for estate planning lawyers, who often have a standard set of documents and mechanisms in their arsenal that they tailor to the needs and size of an estate, but not necessarily to a client’s capacity. Testamentary capacity is often seen as a binary question: does the client have it, or not? But what if the answer is “sort of”?
Taken at face value, this concept of a sliding-capacity scale could have meaningful practical implications, both for estate planners facing clients with borderline or questionable capacity and for litigators on both sides of inheritance disputes.
Applying a sliding-capacity scale, estate planning lawyers could embrace a range of possibilities for assisting clients with dementia or cognitive impairments, rather than the dichotomy of either agreeing to assist the client or turning him or her away. The standard practices for assessing a client’s testamentary capacity would likely still be sufficient for assessing whether a client is fully competent, is not competent to execute any estate plan, or falls somewhere in the middle. That assessment could then be factored into the decisions involved in putting together an appropriate estate plan. In situations when a lawyer might otherwise decline to assist a potential client with some recognized limitations to capacity, a lawyer applying the Gaudynski principle might consider the option of preparing a simplified estate plan, such as only a will or a basic trust with simple and clear provisions.
The sliding-capacity scale concept should also be on the radar for litigators involved in inheritance disputes. Particularly in cases involving competing expert opinions and close questions of capacity, the complexity of the estate plan could become a central factor in resolving the dispute. Because of the intuitive appeal of this principle, it is a fairly simple argument to make to a fact-finder or decision-maker. As a result, a sliding-capacity scale has the potential to be a strong argument on either side of a capacity dispute, depending on the facts of the case.
Despite its intuitive appeal and its potential for tipping the scale in challenging inheritance disputes, litigators in this area seemingly have not latched onto the language from Gaudynski that tends to support a sliding-capacity scale. No other published case in Wisconsin has mentioned this principle in the 46 years since the Gaudynski decision.
Although Wisconsin courts have been silent on the issue since 1970, other Midwestern states have applied similar concepts. In Michigan, courts recognize that a person may have capacity to make a “short and simple will,” even if he or she does not have capacity to make a “long and complicated one.”2 Similarly, in Illinois, courts recognize the complexity of the estate plan is relevant to the capacity determination.3 Yet in both Michigan and Illinois, only a handful of published cases – most of them several decades old – have applied this principle. But with dementia on the rise and the increasing complexity of estate plans crafted by bright, creative lawyers, the principle is ripe for revival.
Although case law is scarce, courts have noted a few characteristics of more complex estate plans that may be more open to challenge on a sliding-capacity scale theory. These characteristics include a large number of beneficiaries, especially when those beneficiaries do not receive equal shares, complex plans with many details or multiple instruments, and length.
Whether the sliding scale concept in Gaudynski is applied more regularly or remains something of an outlier, its intuitive nature suggests it is unlikely to be forgotten altogether. But this is not necessarily cause for alarm. The lesson is not that an individual must be able to understand the technical workings of an estate plan – surely the vast majority of nonlawyers do not have such a deep understanding of their own wills, trusts, and life insurance policies or how they interrelate with each other. Indeed, the very purpose of going to a lawyer is to delegate the task of agonizing over the details and devising a comprehensive, well-crafted plan. Clients rightly assume it is the lawyer’s job to craft the plan in all of its detail, taking into consideration the available mechanisms and legal and financial implications.
Rather, the more appropriate takeaway from Gaudynski is that if a client has trouble understanding an overview of an estate plan in layperson’s terms, an estate planning lawyer would do well to consider simplifying the plan to a level the client can easily comprehend.
Christa D. Wittenberg, Michigan 2012, is an associate attorney with O’Neil, Cannon, Hollman, DeJong & Laing SC, Milwaukee, assisting clients with prosecuting and defending a variety of civil litigation matters, including inheritance and estate litigation.
1 Mueller v. Gaudynski (In re Estate of Gaudynski), 46 Wis. 2d 393, 396, 175 N.W.2d 272 (1970).
2 Kempsey v. McGinniss, 21 Mich. 123, 146 (1870).
3 E.g., Campbell v. Campbell, 22 N.E. 620, 623 (Ill. 1889).
Distinguishing and Diagnosing Alzheimer’s Disease and Dementia
Alzheimer’s disease and dementia are different. The term “dementia” refers to a set of symptoms, not a disease itself. Alzheimer’s disease accounts for approximately 70 percent of cases of dementia. Dementia includes a group of symptoms, the most prominent of which is memory difficulty, with additional problems in at least one other area of cognitive functioning, including language, attention, problem solving, special skills, judgment, or planning. These cognitive problems may be severe enough to affect normal daily living.
Tests to Determine Dementia and Its Severity. The typical first indicator of problems of dementia is memory deterioration. A person may be referred to a neuropsychologist or another specialist for testing. The results of such tests are likely to be a principal component of any claim of lack of capacity or susceptibility to the influence of another person. The physician is likely to use some of the following tests to assist in the determination of the illness and also its severity:
The Hopkins Verbal Learning Test.28 This is a word-list learning test. The patient is read a list of 12 words and is then immediately asked to recite as many words as he or she can. The patient may be read the same list of words multiple times and is of course then immediately asked to recite as many words as possible. Then, after approximately 20 minutes, the patient is asked to recite as many words from that same list as possible.
The Wisconsin Card Sort Test.29 The patient is asked to classify cards according to different criteria. The classification rule changes every 10 cards. The task measures how well the patient adapts to the changing rules.
The Clock Drawing Test.30 The patient is given a blank piece of paper and asked to draw a clock that shows a specified time. This test may be a very strong item of evidence in any capacity case.
Trails B Test.31 This test asks the patient to connect randomly distributed numbers and letters in alternating, sequential fashion. This test has less to do with memory than the tests mentioned above and provides some insight to analytical thinking.
Kokmen Short Test of Mental Status.32 A neuropsychiatrist is likely to perform the Kokmen Short Test of Mental Status. The purpose of the test is to aid in the diagnosis of individuals with dementia, by evaluating an individual’s orientation, attention, immediate recall, arithmetic, abstraction, construction, information, and delayed (approximately three minutes) recall. Approximately five minutes are required for administration of this test. This test has a strong correlation with the results of other tests such as those noted above.
Other tests are being developed, and there may be physical proof based on magnetic resonance imaging or other tests.
Effects of Alzheimer’s Disease and Other Dementia Disorders on Estate Planning. A testator might have the necessary capacity to make a simple will but not the capacity to make a complicated will.33 Trusts and life insurance can complicate dispositive plans.
Executing a will during the last stage of senile dementia would not demonstrate testamentary capacity.34 At this stage, an individual typically has significant difficulty communicating.
As shown in Cutler, O’Loughlin, and Evans, discussed above, when mental health issues are present, the proof relating to capacity and susceptibility to undue influence is more complex. These issues might make it more difficult to predict the outcome of a case. The lawyer who drafts the estate plan in such a case must take special care.
Lawyer’s Role in Cases with Potential Incapacity or Undue Influence Issues
If a lawyer anticipates a contest of a will or another estate planning document based on incapacity or undue influence,
“The attorney should undertake procedures that will tend to preserve the document’s validity and effectiveness. The attorney may wish to use a professional as a witness for the will. After obtaining the client’s permission, the attorney may also wish to review unusual dispositions of property in the estate planning document with the client in the witnesses’ presence.…
“[I]t is also good practice to dictate a memo to the file immediately after the execution conference is completed….
“In some cases, the extra time and expense involved in a verbatim transcript or video recording of the document execution may be desirable, particularly when the attorney anticipates a contest based on the client’s mental capacity. If the attorney is confident of the client’s mental capacity and the client’s ability to project such capacity on a video recording, the attorney may wish to video record a series of questions and answers about the client’s property and the client’s relationships with the beneficiaries.”35
There likely will be an increased rate of estate litigation in the future. More elderly people, more second marriages, and more wealth point to more litigation. Lawyers hired to make changes to dispositive plans should be aware of the possibilities of later disputes. Lawyers handling those disputes may have a greater need for expert medical consultants to defend or object to the dispositive documents.
As the population ages and the number of people with dementia increases, changes in wills or trusts might be reviewed at greater depth. Lawyers involved in those changes will need to take special care because those changes may be reviewed later. Capacity and undue influence claims may make the drafting lawyer an important witness. Knowledge of the medical history of the decedent and the tests performed may play a significant role in assessing the capacity of the decedent at the relevant times. Signs of dementia or other mental health issues increase the risks the drafting lawyer may face in later proceedings.
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Cases for family members carry special risks.
Many years ago one of my uncles had some issues with a previous employer. I thought I could help – you know, write a few letters, get a few dollars, and try to resolve it. Well, the employer, in a not very tactful way, said no way. So we filed a suit. The other side removed the matter to federal court and we drew a very stern, pro defendant judge. I worried that we would just get killed.
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Thank goodness no other family members have asked for help with problems with employers.
Randall L. Nash, Nash Law LLC, Milwaukee.
What’s the most important advice you can give a new lawyer?
Seek out at least one mentor who is very different from you. I have benefitted greatly from the diversity in my lineup of mentors, and recommend the same to others. I think it’s natural to gravitate toward mentors who are similar to you in temperament, style, or interests, and those role models are invaluable. They’re your bread and butter.
But some of the most valuable insight and advice can come from someone whose strengths do not match your own and who challenges your instincts. It’s how you grow as an attorney and as a person. And even if you don’t always agree, sometimes there is even greater value in advice that you ultimately choose not to follow, because you’ve made your own decision better-informed and well-measured.
Christa D. Wittenberg, O’Neil, Cannon, Hollman, DeJong & Laing SC, Milwaukee.
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1 45 U. Miami Heckerling Institute on Estate Planning, ¶ 1600.1 (2011).
3 Mueller v. Gaudynski (In re Estate of Gaudynski), 46 Wis. 2d 393, 398, 175 N.W.2d 272 (1970).
4 Schaefer v. Ziebell (In re Schaefer’s Estate), 207 Wis. 404, 241 N.W. 382, 385 (1932).
5 Holden v. Meadows,31 Wis. 284, 294 (1872).
6 O’Brien v. Lumphrey (In re Estate of O’Laughlin),50 Wis. 2d 143, 183 N.W.2d 133 (1971).
7 See Cutler v. Cutler, 103 Wis. 258, 261, 79 N.W. 240 (1899).
10 Id. at 264.
12 See id.
13 In re Estate of O’Loughlin, 50 Wis. 2d at 146.
16 Id. at 147.
17 Zellner v. Krueger (In re Estate of Evans), 83 Wis. 2d 259, 265, 265 N.W.2d 529 (1978).
18 Id. at 268-69.
19 Id. at 269.
21 Id. at 281.
23 In re Estate of Gaudynski, 46 Wis. 2d at 396.
25 Id. at 397 (internal citations omitted).
26 Johnson v. Merta (In re Estate of Dejmal), 95 Wis. 2d 141, 156, 289 N.W.2d 813 (1980); Hamm v. Jenkins (In re Estate of Hamm), 67 Wis. 2d 279, 288-89, 227 N.W.2d 34 (1975).
27 In re Estate of Dejmal, 95 Wis. 2d at 156-57.
28 Jason Brandt, “The Hopkins Verbal Learning Test: Development of a new Memory Test with Six Equivalent Forms,” The Clinical Neuropsychologist, 5(2), 125-42.
29 D.A. Grant & E. Berg, “A behavioral analysis of degree of reinforcement and ease of shifting to new responses in Weigl-type card-sorting problem,” J. of Experimental Psych., 38, 404-11 (1948).
30 H. Goodglass & E. Kaplan, The Assessment of Aphasia and Related Disorders vii-70 (Oxford, UK: Williams & Wilkins, 1983).
31 D.A. Cahn, “Detection of Dementia of the Alzheimer’s Type in a Population-Based Sample: Neuropsychological Test Performance.” J.of Int’l Neuropsych. Soc’y, 1 (03), 252-60 (1995).
32 E. Kokman, J.M. Naessens & K.P. Oxford, A Short Test of Mental Status, Description and Preliminary Results, Mayo Clinic Proc. 1987; 62: 281-88.
33 In re Estate of Gaudynski, 46 Wis. 2d at 393, 396.
34 Denton v. Lake (In re Williams’ Estate), 186 Wis. 160, 202 N.W. 314 (1925).
35 Mark H.T. Fuhrman & David P. Weller, “Representing the Client: The Basics,” § 2.211, in Susan L. Collins et al., Eckhardts’ Workbook for Wisconsin Estate Planners (State Bar of Wisconsin PINNACLE, 6th ed. 2014).