Grandma Passed The Test!

Category: Will Contests, Trust Disputes & Probate Administration

One of the most fruitful and confused areas of estate and trust litigation involves the mental capacity of the grantor of a trust. Not too long ago, the Michigan legislature made it clear that the mental capacity necessary to create a trust is the same as the mental capacity necessary to make a will. But a significant problem remains. How do you know?

Grandma is 85. She decides to change her trust and disinherit grandchildren XYZ in favor of grandchildren ABC. Grandma lives in an assisted living facility and granddaughter B was appointed Conservator and helps her pay bills because Grandma can be a bit forgetful. Because of the conservatorship, Grandma is deemed “disabled” under the language of the Trust and Mr. Jones has taken over as her successor trustee. Grandma is alert, knows her family, where she lives etc.

Can Grandma change her trust? Technically yes, but is she competent to do so? Even a thorough mental exam given by a qualified physician doesn’t necessarily answer the question. I just saw a report where the doctor concluded that the subject “is aware of her current needs and current circumstances, is able to make decisions about her possessions, and can communicate effectively with her attorney. Despite this, I feel that guardian assistance for bill paying would be helpful.” The report also stated that the subject had “exhibits deficits in consolidating short term information to long term storage.”

The facts described above came directly from a real case. So Grandma passed the test, but did she really? If she’s competent, then why does she need a guardian? What should Mr. Jones, the trustee do? Is the change acceptable or not? With this language in the report, one thing is certain, clever lawyers will be able to argue both sides and Mr. Jones will get caught in the middle. A video signing can often cut these arguments off, but most people don’t have the foresight to do that and we get stuck with the facts as clear as mud.

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