What Does It Mean to Lack Capacity for Conservatorship and Trust and Estate Plan Documents in California? (Part 1 of 3)

If you need to take over the affairs of a friend or loved one because he cannot manage himself, then you need to understand capacity. You may need to establish a conservatorship court proceeding. Or you may need to take action according to his trust, power of attorney for financial management (or asset management), or power of attorney for health care (or advance health care directive).

Separately, you want things to go smoothly for you for the remainder of your life. That means that you need to plan for your potential future lack of capacity. You would do that by signing a trust, will, power of attorney for financial management, and power of attorney for health care.

This is the first post of a 3-part post series. Here and in our next 2 posts, we’ll discuss capacity (and lack of capacity). We’ll do this regarding California conservatorship proceedings. And we’ll do it regarding California trusts, wills, power of attorney for financial management (or asset management), and power of attorney for health care (or advance health care directive).

Consider issues of capacity from 2 directions:

1. You may want to take over the affairs of a friend or loved one through a conservatorship court proceeding, trust, or power of attorney. You may need to do this when your friend cannot manage her own affairs. In these cases, you normally need to establish that the friend lacks capacity, or is incapacitated.
2. Or you may want to create estate plan documents for yourself such as a trust, will, and powers of attorney. Through those documents you plan ahead for what you want to happen if you become incapacitated in the future. You cannot sign these documents unless you have sufficient capacity.

What Is Capacity and What Does It Mean in California to Lack Capacity or to Be Incapacitated?

The word “capacity” is based on the Latin word capacitatem. That means “capability of holding much”.

According to California law, capacity is the mental and physical ability to make a rational decision. That includes the ability to perceive and appreciate all relevant facts. So capacity is a state of being.

California law contains multiple definitions of capacity (and lack of capacity) depending on the legal context. And in some legal contexts, California law contains no such definition even though having it could be helpful.

What Is Lack of Capacity for Managing Someone Else’s Affairs Through a Conservatorship Court Proceeding or Through Her Trust and Powers of Attorney?

Let’s first discuss establishing that someone lacks capacity to manage her affairs. If she’s an adult and you want to take over managing her affairs for her, then there are 3 possible ways for you to do that (or 4 different ways, depending on how you look at it):

1. Conservatorship: If the person did not create a trust, power of attorney for financial management (or asset management), and/or power of attorney for health care (or advanced health care directive), then a conservatorship court proceeding is the only way that you can obtain legal authority to manage her affairs. As we discussed in our prior Conservatorship – 2 of 6 (Aspects and Court Procedures) post, a conservatorship court proceeding can have 1 or both of the following components:
   • Conservatorship of the Person: This provides you with authority to make personal care and medical decisions.
     To be incapacitated to the extent that a court can appoint a conservator of the person, she must be “unable to provide properly for . . . her personal needs for physical health, food, clothing, or shelter . . . .”
   • Conservatorship of the Estate: This provides you with authority to manage assets and finances.
     To be incapacitated to the extent that a court can appoint a conservator of the estate, she must be “substantially unable to manage . . . her own financial resources or resist fraud or undue influence . . . .”
2. Trust, Power of Attorney for Financial Management (or Asset Management), and Power of Attorney for Health Care (or Advance Health Care Directive): These are estate planning documents through which someone nominates a person to manage her financial and/or personal care decisions. Normally these documents do not empower the nominated person to act until the person who created the documents is incapacitated.
   California does not have a statute specifically defining capacity (or lack of capacity) that one must establish to be empowered to manage the affairs of another person through each of these particular documents.
   If these documents are well-drafted, then they will define lack of capacity. They will discuss how to establish the lack of capacity to become able to manage the affairs of the incapacitated person. Typically, these documents require written certification by 1 or more doctors to establish that lack of capacity.

There’s more to this story as we’ll discuss in the third and final post in this 3-part series.

The next post will discuss the capacity necessary to sign trusts, wills, powers of attorney for financial management (or asset management), and powers of attorney for health care (or advance health care directive). The third and final post will discuss some capacity rules that overlay all of the other capacity rules.

Get Help from an Experienced Trusts and Estates Attorney

Making a mistake assessing a person’s capacity regarding conservatorship court proceedings and trust and estate plan documents could be catastrophic. If a person lacking capacity signs a trust or other estate plan documents, then someone may be able to invalidate the trust or other documents after her death (or at another time when these documents are needed) through court litigation.

Hiring an attorney experienced with conservatorship court proceedings and trusts can help avoid a lot of this. In addition, the advice and guidance of an attorney experienced with conservatorship court proceedings and trusts is invaluable for attaining your goals in these types of cases.

At Meinzer Law Firm, P.C., we have over 20 years of experience helping clients achieve their goals in conservatorship and trust cases. Contact Meinzer Law Firm, P.C., in Torrance to assist you with your Los Angeles County probate court case.