Occasionally, a client does not want a declaration of “incapacity” (as used in various planning documents and NJ case law) made by a physician. Surprising but true. So what can be done in such a case? An alternative is to avoid using language that postpones the effective date of the power of attorney (POA) until a future date or event of incapacity and make the POA legally “effective” upon signature.
“Springing” Powers of Attorney vs. Effective Immediately Powers of Attorney
In NJ, a “springing power of attorney” routinely provides for a physician to determine medical capacity for the purpose of empowering the agent or successor trustee to act on behalf of another person. Courts, title companies, financial institutions, and others rely on these physician determinations, which are sometimes stated in letter or memo form and sometimes in a declaration or affidavit form. Less frequently, the POA allows trusted family member(s) or friend(s) the authority to determine capacity as defined in the document.
In protective proceedings (e.g., guardianship, conservatorships), physicians often provide detailed declarations concerning the capacity of proposed representative. They declare facts and opinions concerning capacity. These facts and opinions are evidence upon which a court relies in making findings of capacity or lack of legal capacity.
Occasionally, we see attorney opinions of capacity in proceedings concerning powers of attorney, trusts, probate estates, and conservatorships, usually given by the attorney for the client who executed a document being challenged on capacity grounds. But these opinions are just that, an opinion, not a determination, because attorneys are almost never granted authority to determine capacity.
Incidentally, in NJ, the courts have held that there are different levels of capacity depending on the transaction in issue. The lowest level is capacity to marry. Testamentary capacity is higher. And contractual capacity is the highest level, typically required for execution of trusts. There are variations of the above legal standard(s) such as for a trust amendment that merely changes beneficiaries, for which testamentary rather than contractual capacity may be required. For purposes of representing a client who will sign documents, I find myself making a determination of capacity. If in doubt or if I anticipate litigation, I will obtain the opinion of a physician or neuropsychologist.
Remember again, there are two kinds of mental capacity determinations: legal capacity, which usually is decided by a judge with input from a physician(s) or psychologist(s) in the context of a guardianship or conservatorship proceeding, depending on state law, and clinical capacity, which usually is assessed by a physician to determine whether a patient can give informed consent.
If you are looking for additional details on this topic or if you require advice about your situation, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing or telephone consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Power of Attorney Lawyer