Founding partner, Michael D. Rudy, discusses the use of physician opinion letters in estate planning and trust and estates litigation and the universally misunderstood term “legal capacity.”  

By far the most misunderstood area in trust and estates litigation is the term “legal capacity,” which is a term I have found to be universally misunderstood by clients, physicians, social workers, attorneys, and even judges.

Physician letters or opinions are often used to determine whether a patient has the “legal capacity” to make his or her own financial decisions or execute a will or trust. These letters are often provided to third parties including attorneys, investment advisers, and bank representatives.

However, many physicians — including psychologists, psychiatrists, neurologists, and primary care physicians – do not have knowledge of the necessary testing and expertise required to offer an accurate and informed medical/legal opinion as to their patient’s “legal capacity” to perform a specific task or enter into a specific transaction, such as the execution of a testamentary document.

One common mistake is that the terms “capacity” and “competency” are often used interchangeably when they have different meanings. “Capacity” is the term employed by a physician or psychologist specializing in neurocognitive behavior to refer to an individual’s cognitive ability to assimilate information and make informed and rational decisions in relation to a particular task or function. Conversely, “competency” is a legal term used by the courts and attorneys to refer to an individual’s legal ability to perform a specific task and be legally responsible for his/her actions or to enter into a specific type of contract or instrument.

Another common mistake occurs because physicians, psychologists, psychiatrists, social workers, and even attorneys and the courts frequently fail to recognize that there are many different types of capacity required to perform a particular task or function. For example, different types of capacities are required to stand trial in a criminal proceeding, to manage one’s own finances, to marry or divorce, to engage in end of life decisions, to consent to medical treatment, to execute a will or trust, and to make inter vivos bequests of property.

Although the concept of different types of capacities may seem simple enough, testing for these different types of capacities becomes complex because age, education, and general health all play a role in determining one’s capacity. There is no single test for determining capacity that is employed by a skilled forensic practitioner, and often, a multitude of cognitive tests and specific factual inquiries of the subject is required.

Even with testing and specific factual inquiries of the subject, good forensic experts can differ strongly over whether an individual has capacity at any given point in time relative to any particular task or function. This is why experts often battle in court over a given transaction — they are trying to determine whether, at the time of the transaction (or execution), the individual had the requisite capacity to enter into it.

Unfortunately, the community standard for the evaluation of capacity is woefully inadequate and extremely low. This is primarily because physician opinions prior to the execution of a will or trust have only been used in the last 20 years or so and because most physicians have little or no training and fail to properly evaluate a patient. In some cases, a physician’s opinion can be completely worthless because the physician lacks the knowledge to provide a qualified opinion.

In my practice, I have come across physicians being “setup” by one or more individuals to be a witness in a trial in which they have been simply unaware of the nature of the testamentary instrument or the overall purpose of the opinion letter. Because the physician has little or no training in the area, the physician has no way of having the ability to evaluate a patient or the relevant information to determine capacity.

In summary, physician opinion letters should only be obtained by medical professionals qualified and trained to determine an individual’s “capacity.” Further, third parties (such as estate planning attorneys, investment advisers, or personal bankers) relying on physician letters should use a common-sense approach. A cursory, short, broad statement of “competency” is clearly insufficient in the vast majority of cases. Third parties should request, whenever appropriate, that a definitive and comprehensive evaluation, specific to the transaction or purpose, be undertaken.

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