In order to sign legal documents in New York, the individual must have legal capacity. Being able to sign one’s name is not sufficient to have legal capacity. The person must understand the document that he or she is signing. As you will see below, different documents have different criteria for the determination of capacity. A person can have dementia (such as Alzheimer’s disease) and still be able to sign legal documents. It is important that someone with a diagnosis of early-stage dementia act quickly to put an estate plan in place before he or she loses capacity to sign documents. Failure to do so could lead to unnecessary expense and trauma for the family. For instance, if a proper power of attorney is not in place, a guardianship might be necessary. A guardianship is a legal proceeding that will require petitioning the court to appoint a guardian. A court evaluator will have to be appointed, a hearing will have to be held and a judge will make a determination. Subsequent to a guardianship proceeding, there will be reports and other requirements that will prove expensive and burdensome to the family. Also, the judge will select the person who is in charge of the individual’s person and/or property. That person may not be the same person that the individual would have chosen had he or she been able to make the choice.
Last Wills and Testaments
It takes less capacity to validly execute a will then any other document. In order for the individual to have capacity to sign a will, she must: 1) understand the nature and consequences of executing a will; 2) understand the nature and extent of the property she is disposing of in her will; and 3) must know those who would be considered the natural objects of her bounty and her relations with them.
Powers of Attorney
“ ‘Capacity’ means ability to comprehend the nature and consequences of the act of executing and granting, revoking, amending or modifying a power of attorney, any provision in a power of attorney, or the authority of any person to act as agent under a power of attorney.” See General Obligations Law 5-1501 (2)(c). In other words, the individual must understand both the benefits and the risks of signing a power of attorney. He must also understand all of the provisions of the power of attorney and what authority he is giving to the agent with respect to his property.
Health Care Proxies
On the one hand the Public Health Law gives specific criteria for determining whether one has capacity to sign a health care proxy. On the other hand, one is “presumed” to have capacity unless she has been adjudged incompetent. These two provisions may not be reconcilable.
“ ‘Capacity to make health care decisions’ means the ability to understand and appreciate the nature and consequences of health care decisions, including the benefits and risks of and alternatives to any proposed health care, and to reach an informed decision.” See Public Health Law 2980 (3).
“For the purposes of this section, every adult shall be presumed competent to appoint a health care agent unless such person has been adjudged incompetent or otherwise adjudged not competent to appoint a health care agent, or unless a committee or guardian of the person has been appointed for the adult pursuant to article seventy-eight of the mental hygiene law or article seventeen-A of the surrogate’s court procedure act.” See Public Health Law 2981 (1)(b).
Are we supposed to look at the specific criterion of Public Health Law 2980 to gauge whether one has the capacity to execute a health care proxy or just presume the person has capacity pursuant to Public Health Law 2981? Obviously, there must be some indication of capacity but how far do we have to go to make a determination?
Courts have held that capacity with respect to a trust depends on what aspect of the trust is being examined. For instance, if the issue involves whether the individual had the capacity to give his property to certain beneficiaries upon his death, then the court will make the determination on the basis of whether the individual had the capacity to sign a will. On the other hand, if the issue is whether the person had the capacity to appoint someone to be the trustee of her trust during lifetime then the court will probably use the contract standard to determine whether the person had legal capacity.
One can only sign legal documents when she has capacity. Thus, it is important to get one’s estate plan in order while one is still able to understand the documents that he wishes to sign.