In 1993, Suzanne executed a will that left 50% of her estate to her son – Dan – and 50% to her granddaughter, Nicole. Suzanne began to suffer from hallucinations in 1995. Approximately one year later, Suzanne executed a power of attorney authorizing Nicole to handle her real estate transactions. At the time, Suzanne owned a home in New London. Everyone knew that she was executing this power of attorney in favor of her granddaughter.
A couple of days after she executed it, Suzanne was admitted to the hospital with hallucinations. While at the hospital, a doctor diagnosed her with mild senile dementia. Several months later, Nicole sold Suzanne’s home for $150,000 and purchased a condominium in Waterford for $100,000. Title to the condominium was in the name of Suzanne and Nicole’s mother (Darcy) as joint tenants with rights of survivorship. Suzanne remained in the condominium until her death five years later.
After Suzanne’s death, Darcy became the sole owner of the condominium. Dan sued Darcy as well as Nicole. In that lawsuit, he asked the court to impose a constructive trust on the condominium and any cash left over from the sale of Suzanne’s home in New London. Dan claimed that Darcy and Nicole intended to deprive Suzanne’s estate of its principal asset (the house in New London) and as a result, he lost out on his 50% interest in his mother’s estate. At the heart of Dan’s claim was that Suzanne lacked the mental capacity to knowingly execute her power of attorney.
At trial, several witnesses testified to Suzanne’s mental capacity. One of the witnesses was the doctor who treated her when she was admitted to the hospital. That doctor testified that after Suzanne was admitted, he diagnosed her with mild dementia. Also, after reviewing her medical records, the doctor testified that in his opinion, she suffered from moderate stage Alzheimer’s Disease. Nevertheless, he also testified that Suzanne’s situation was fluid and that she could be lucid at times. Finally, the court considered the records of the visiting health care providers who rendered care to Suzanne in the months leading up to her admission to the hospital. Those records indicated that Suzanne experienced occasional hallucinations and moments of confusion.
In deciding Dan’s case, the court cited to another case for the proposition that there is a presumption of sanity in the performance of legal acts. The court then stated that the medical evidence offered by Dan fell short of overcoming this presumption and concluded that he failed to prove his mother was incapable of executing her power of attorney. Since the court found that Suzanne had the capacity to execute her power of attorney, that meant that Nicole was properly authorized to sell the home in New London and purchase the condominium in Waterford.
The issue of capacity is one that comes up in my practice over and over again. The burden of proving a lack of capacity is onerous and difficult. Every case stands on its own facts. Ultimately, a court must determine whether someone has the capacity to execute a legal document and this determination is done with the understanding that there is a presumption in favor of capacity.
At Cipparone & Zaccaro, PC, we have a good deal of experience handling disputes over the use of a power of attorney. If you have questions related to capacity, please don’t hesitate to give us a call. We’d be happy to analyze the facts of your case and advise you according to the law.