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How Making an Estate Plan Can Prove Your Mental Competency

The purpose of estate planning is to prepare for a time when you can no longer make decisions for yourself, either because of death or incapacity. And while ascertaining a person’s death is usually a straightforward task, determining incapacity-more precisely, the lack of capacity to make certain types of decisions-is often complicated. California law establishes varying competency thresholds for different legal decisions, as illustrated by a recent decision from a state court of appeals panel in Santa Ana. This case is only used for illustrative purpose and cannot be relied on as a statement of the law.

The case itself involved divorce, not estate planning. Lyle B. Greenway wanted to end his 48-year marriage to Joann Greenway. In 2009, Lyle Greenway moved out of his marital home and into a retirement community. The following year, he filed a petition for legal separation, citing irreconcilable differences with his wife. Joann Greenway opposed the petition.

Lyle Greenway was recovering from an operation and convalescing in a nursing home in mid-2010. Because of this, the couple agreed to have their case heard by Thomas J. Murphy, a former San Diego County Superior Court judge who now works for JARS, an alternative dispute resolution company. Judge Murphy performed essentially the same function as a trial court in this case.

The only legal question, according to Judge Murphy, was whether Lyle Greenway had the capacity to make the “reasoned decision to dissolve his marriage.” Joann Greenway presented evidence purporting to show her husband suffered from dementia and was under the undue influence of his son and financial advisor. In 2009, Lyle Greenway signed separate powers of attorney for financial and health care decisions, naming his agent and son, respectively, as his agents.

While several physicians testified that Lyle Greenway exhibited symptoms consistent with some degree of dementia, Judge Murphy ultimately found he was capable of making a “reasoned decision” to end his marriage. Judge Murphy not only credited the testimony of Lyle Greenway himself, but also of his estate planning attorney, who separately testified that she did not “see or discern any mental incapacity” when Greenway signed his powers of attorney. Indeed, Judge Murphy noted the very fact Lyle Greenway made such powers of attorney demonstrated he had the capacity to make reasoned decisions as late as 2009.

A Lower Standard for Marriage & Wills
The court of appeals reviewed Judge Murphy’s findings and affirmed his decision. The court noted that under California law, the level of capacity needed to enter a marriage or make a will was quite low. A person under the care of a conservator can marry, for example, but not enter into a business contract, which requires a higher degree of “mental capacity.” Likewise, a person may sign a will even if he is physically or mentally weakened.

The appeals court reasoned that the level of capacity required to end a marriage should be the same as the capacity to enter one. Because that is an inherently low threshold, medical testimony regarding Lyle Greenway’s dementia was insufficient to support a conclusion that he could not make a “reasoned decision” to seek a divorce. Like Judge Murphy, the appeals court also pointed to Lyle Greenway’s decision to sign powers of attorney in 2009 as evidence that his dementia did not affect his “ability to engage in abstract thinking.” It showed he had the capacity to contemplate his future and the need for people to act in his best interest.

Please note that the court of appeals decision in this case is not part of the official reports and therefore should not be construed as a binding statement of California law. Nevertheless, the decision here helps demonstrate the importance of working with a qualified San Diego estate planning attorney to ensure your affairs are only managed by the people you trust. If you have any questions, please contact the Law Office of Scott C. Soady at 1-877-435-7411 today.

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