Professionals whose practices are devoted to our aging population are often confronted with older adults who appear to be struggling to manage their financial or medical affairs. Questions may arise as to an individual’s competency, based upon advanced age, physical infirmities and/or cognitive deficits. Understanding the issue of capacity, and the options available to these vulnerable elders and their loved ones, may be critical in the successful management of your field of practice.
Questions of capacity necessarily involve the competing issues of an individual’s personal freedom and right of autonomy, on the one hand, and the protection of vulnerable individuals, on the other.
When making a capacity assessment, professionals must be mindful of the gravity of a judicial declaration of legal incapacity:
Despite the seemingly benevolent nature of the guardianship system, the consequences of guardianship are very harsh. When a court appoints a guardian, the ward loses all rights to determine anything about [his or her] life…. By appointing a guardian, the court entrusts to someone else the power to choose where they will live, what medical treatment they will get and, in rare cases, when they will die…. Gottlich, V., The Role of the Attorney for the Defendant in Adult Guardianship Cases: an Advocate’s Perspective, 7 Md. J. Contemp. Legal Issues 191, 197 (Fall/Winter 1995-1996) (quoting House Subcomm. on Health and Long-Term Care of the House Special Comm. on Aging, Abuses in Guardianship of the Elderly and Inform: A National Disgrace, H.R. Doc. No. 641, 100th Cong., 1st Sess. 4 (1987)).
However, those of us engaged in fields of practice involving the elderly feel an obligation to protect those who are in need of assistance, and when an elder’s ability to make rational decisions is sufficiently impaired, particularly in situations in which the elder has not made effective alternate voluntary arrangements (such as through a durable power of attorney, the appointment of a health care surrogate, etc.), See Regan, J., Morgan, R. and English, D. Tax, Estate & Financial Planning for the Elderly, §16.02 at 16-7 (Matthew Bender 2005), legal intervention may be necessary. Kapp, M., Measuring Client Capacity: Not So Easy Not So Fast, 13-Sum NAELA Quarterly (Summer 2000).
Adults are presumed to be legally competent unless they are declared by a court to be incompetent (“incapacitated”), or incapable of caring for themselves. Frolik, L. and Brown, M., Advising the Elderly or Disabled Client, §22.01 (2d ed. 2003)
A guardianship (referred to by other terms, such as “conservatorship,” in some states) is a formal legal action for substitute decision-making: it confers upon a designated individual (the guardian) the right to make decisions on behalf of another (the ward). A guardianship action is an involuntary proceeding, and it may be established over the opposition of the incapacitated person.
There is no federal law governing guardianship; state law applies to guardianship actions. The substance of these laws, including but not limited to the legal standards for determining incapacity, varies considerably among states. Id.; Kapp, M., Measuring Client Capacity: Not So Easy Not So Fast, 13-Sum NAELA Quarterly (Summer 2000).
In the event that a judicial determination of incapacity is made, the court may appoint a “guardian of the person,” to make personal decisions such as living arrangements and health decisions; a “guardian of the property,” to manage the incapacitated person’s estate and finances; or a “plenary guardian,” with power over both the person and the estate. Frolik, L. and Brown, M., Advising the Elderly or Disabled Client, §22.01 (2d ed. 2003) As discussed below, the court may also order a limited guardianship.
The Concept of a “Limited” Guardianship
Courts are increasingly recognizing the concept of a “limited guardianship”, in which the subject of the guardianship action is found to be an incapacitated person and a guardian is appointed, but the guardian’s powers are limited to those areas in which the incapacitated person does not retain decision-making capacity.
In practice, however, the use of limited guardianships is generally more prevalent in cases involving the developmentally disabled, as opposed to elderly clients suffering from dementia or Alzheimer’s disease. See Begley, T. and Jeffreys, J., Representing the Elderly Client, §17.04[D] at 17-9 (Aspen Publishers 2004).
Determining “Incapacity”: The Legal Requirements
The legal standard for determining “capacity” varies, depending upon the transaction in issue. For example, testamentary capacity (the capacity to make a valid will), is said to exist if, at the time the will is made, the testator is able to comprehend in general terms the property comprising his or her estate, the natural objects of his or her bounty, the disposition he/she is making by executing the will, and how each of these factors relate to the others. Restatement (Third) of Property: Wills & Other Donative Transfers § 8.1 (2003).
Contractual capacity (the capacity to enter into a contract) is said to exist if the person reasonably appreciates the effect and consequences of the transaction, and is capable of exercising free will with respect to the contract. 17A Corpus Juris Secundum Contracts §141 (2008). Donative capacity, or the capacity to make a gift, exists if the donor is able to understand the “nature and effect of his or her act.” 38 American Jurisprudence 2d §13 (2008).
In contrast, as set forth above, a guardianship action is predicated upon a finding by a court that the individual in question is incapacitated. The legal standard for determining incapacity is based upon the statutory and common law of a particular state, and there is no universal legal definition of “incapacity”. Kapp, M., Measuring Client Capacity: Not So Easy Not So Fast, 13 NAELA Quarterly 3 (Summer 2000). However, the general standard is that a guardianship is appropriate in cases in which a person, because of mental or physical illness or disability, lacks sufficient capacity or understanding to make decisions regarding his or her affairs, or to communicate those decisions to others. See Frolick, L., Science, Common Sense, and the Determination of Mental Capacity, 5 Psychology, Public Policy, and Law 41 (Mar. 1999).
Determining “Incapacity”: A Practical Guide
The aforementioned general legal definition notwithstanding, the inquiry into whether a client is “incapacitated” is often a troubling and difficult issue. The following assessment tools may provide guidance in the exploration of this area, and may serve to inform the decision as to whether further action is necessary.
1. Functional Assessment
A functional assessment involves the examination of the individual’s behavior in order to assess that individual’s contextual capacity. Functional assessments recognize that an individual may be incapacitated for some purposes but not for others. See Regan, J., Morgan, R. and English, D. Tax, Estate & Financial Planning for the Elderly, §7-8/2 at 7-35 (Matthew Bender 2005).
A cognitive assessment is a traditional mental health assessment to assess an individual’s orientation to time, place, person and intellectual functioning. Such assessments include the Mini Mental State Examination and the Mental Status Questionnaire. See Id.; Kapp, M., Measuring Client Capacity: Not So Easy Not So Fast, 13-Sum NAELA Quarterly (Summer 2000).
What To Do If You Suspect Incapacity
In the event that you suspect that an elderly client is incapacitated and that a guardianship may be appropriate, you can report your concerns to a variety of sources, including the individual’s family, close friends, health care provider or attorney. If the individual is institutionalized, you can report your concerns to the administrator of the facility. If the individual is not institutionalized, and the individual’s family, friends or medical doctor are unable or unwilling to take notice of your concerns (or if you know of no family members, friends or treating doctors of the individual), you may also contact local adult protective services agencies in your area.
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