Capacity: What Is It And Why Is It Needed To Plan An Estate?

capacity Sep 13, 2019

In Alberta, the only limitation to a person over 18 signing a Will, Power of Attorney and Personal Care Directive is that they have the mental capacity to do so. It may seem like a simple concept, but the truth is many people don’t know that capacity is required to have these documents made for individuals.

Why is Capacity Needed?

The largest concern for these Estate Planning documents is that the person executing them, at the time of execution, understood the nature and effect of what they were signing. These documents allow another person or persons to have large amounts of control, the need for capacity comes from the desire to ensure that people giving away that level of control understand exactly what they are doing. If it is determined that capacity was not held at the time of execution, the court can declare the document invalid and it is no longer of any effect. 

What is Capacity?

For Wills this mental capacity is sometimes called "testamentary capacity" and there are 3 requirements that must be met to have someone deemed capable:

  1. you know that you are making a Will and you understand what a Will is;
  2. you know what property you own; and
  3. you are aware of the people you would normally provide for. 

For a Power of Attorney having mental capacity is very similar: you must know what the document is and know what property you own. However, it is also required that you understand the authority you are giving your attorney, that you know there is a chance your Attorney can misuse that authority and that you understand that you may revoke this authority at any time that you are still mentally capable.

Personal Care Directives follow this reasoning as well: you must know the authority you are giving. For PCDs this is especially important because your Agent will be making personal decisions regarding your own self. To be valid, the executor of the document must understand not only the authority, the ability to misuse the authority and their own ability to end the authority, but also whether or not their Agent is truly concerned with their well-being. 

If you are concerned that someone may challenge your capacity at the time of executing your documents, consider having a lawyer prepare the documents. Lawyers will always ensure those signing have capacity to do so and can guide you through the formalities required in Estate Planning. For more information please see the following links or call our office!

https://www.cplea.ca/wp-content/uploads/MakingAWill.pdf

https://www.cplea.ca/wp-content/uploads/MakingAnEnduringPowerOfAttorney.pdf

https://www.cplea.ca/wp-content/uploads/MakingAPersonalDirective.pdf

Please don't hesitate to reach out to our experienced lawyers, they are here to help!

 

 

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