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When Does Mental Capacity Prevent Signing Key Estate Documents


Signing documents is associated with estate planning. Those documents carry powers and take effect when you no longer can. Wills, healthcare proxies, various powers of attorneys or trust documents are typical examples. But you must be mentally competent to sign these. But what does that mean, and when is it too late?

Let's consider some general principles on mental competence, with the realization that anything can be challenged in court. Weakness of mind and forgetfulness are generally not sufficient to invalidate estate planning documents if it appears your mind - at signing - was capable of attention and exertion when aroused. So, you can be suffering from physical ills and some degree of mental disease yet still execute valid documents.

A firmly embedded principle for validly signing a document is that you must possess the mental competence to reasonably understand the nature and effect of your actions. And, importantly, this competency adheres only at the time you sign the document.

During early dementia you can have bad days where you don't know anyone, but good days where you recognize everyone and think fine. If you sign legal documents on one of your good days, they may be perfectly valid.

*Signing wills:

This requires that you have the mental capacity to know who, what and where. That means you can answer pretty well just who would ordinarily benefit from your estate, such as family and friends. You can also answer What do you own, and what's it worth? Or Where or to Whom do you want to distribute your property?

*Signing financial documents and powers of attorney:

These require the mental capacity to contract. That means you must understand, in a reasonable manner, the nature or effect of your actions when signing.

*Signing healthcare proxies:

Because of the life and death decisions that can arise, requirements are more rigorous when signing healthcare powers of attorney. You must have two independent, unrelated witnesses. Those witnesses shall not sign the durable power of attorney for healthcare unless you not only appear to be of sound mind, but also appear under no duress, fraud or undue influence.

To assure sustaining a later challenge to a competent signing of any document, you should have two or three independent witnesses - i.e. who have no personal stake in your property and would witness the documents only if you appear to be of sound mind. That's because not only does the challenger have the burden of proving you were of unsound mind at the time you signed the document, he must also prove the unsoundness at that time was of such character that you had no reasonable perception of the terms of the documents.

So if you don't want a legal battle over the competency of one who will sign a document, prepare for the signing accordingly.

About Author Shane Flait :

Shane Flait helps you with your financial legal, tax, and retirement goals. Get his FREE report on Managing Your Retirement => <a href="" target="_blank"></a> Read his ebook: 'Wise Way to Financial Independence' => <a href="" target="_blank"></a>

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Article Added on Tuesday, June 25, 2013
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