Estate Planning with Alzheimer’s or Cognitive Impairment

When people hear a diagnosis like Alzheimer’s or another condition that affects cognition, they often assume it means estate planning is off the table. But that’s not always the case. In fact, individuals with cognitive impairments may still be able to legally execute estate planning documents—if certain conditions are met.

The Legal Test: Understanding in the Moment

The key legal standard for capacity in estate planning is this:
Does the person understand what they are doing at the time they are doing it?

This isn’t about a diagnosis or general state of health—it’s about lucidity in the moment of signing. For example, individuals with “sundowner’s syndrome” may experience confusion and disorientation in the evenings but be completely lucid in the mornings. If a person is coherent and can demonstrate understanding during a lucid period, they may have the capacity to execute estate planning documents such as a will, trust, or power of attorney.

Types of Legal Capacity

There are several types of legal capacity, each relevant in different contexts:

1. Testamentary Capacity: The ability to know what you own and whom you want to leave it to. This is the standard for making a will.
2. Contractual Capacity: The ability to understand the terms and consequences of an agreement. This comes into play with powers of attorney, trusts, or other legal documents.
3. Criminal Capacity: Understanding that a particular act is wrong or unlawful.

Although these categories are technically different, they all come down to one central concept: understanding the consequences of your actions. A person can have testamentary capacity without having contractual or criminal capacity, but the threshold for comprehension is similar.

An Attorney’s Dual Responsibility

As an estate planning attorney, I have a twofold duty:

1. Carry out the client’s wishes, and
2. Ensure those wishes are not the result of undue influence or lack of capacity.

If it becomes apparent that a client does not understand what they’re doing, the attorney cannot ethically proceed. If the attorney determines that the client lacks capacity, the attorney should cancel or terminate the meeting, whether it’s an initial consult, a follow-up, or a final signing. Likewise, if there is clear evidence of undue influence—such as someone pressuring the client or taking advantage of their vulnerability—the attorney should not assist.

That said, if the situation is unclear and the client appears to have capacity, it is not the attorney’s job to second-guess their wishes beyond the professional diligence required. It’s the responsibility of anyone challenging the estate plan later to prove incapacity or undue influence.

Preparing for Possible Challenges

Estate plans created under conditions of cognitive decline are more likely to be challenged in court. Knowing this, when an attorney has reason to believe that the estate plan may be challenged, or otherwise recognizes potential red flags, the attorney’s file should be prepared with special care to defend against future litigation.

 

Take, for example, a client who is showing signs of mental decline and wants to leave assets to a nonrelative. That raises some concern—especially if close family members are being excluded. The attorney should ask questions, and take copious notes.  Questions may include:

• Why does the client want to leave assets to that person?
• What has that person done for the client?
• Does that person know about the future gift?
• Has that person tried to influence the client in any way?
• Does the client rely on that person in any way?
• Whose idea was it to create an estate plan?
• Who selected the attorney?
• How did the client contact the attorney, how does the client physically get to the attorney?
• Why are family members being excluded?
• Can the client describe the assets? This should be done with specificity, such as drawing a map of a parcel of land, providing a description of a painting, perhaps a story of how the client acquired the asset.

 

How Courts Evaluate Undue Influence

Different courts may take a different approach to undue influence, and different states may be more protective than other states.  Many states recognize that undue influence is rarely proven by direct evidence, and is usually proven by circumstantial evidence.  As such, courts tend to look at several key factors:

When estate plans are challenged in New York on the basis of undue influence, courts look for evidence of several key factors:

• Vulnerability: Was the testator or grantor physically or mentally compromised?
• Opportunity: Was the alleged influencer able exert pressure?
• Motive: Did the influencer have something to gain?
• Unnatural Outcome: Is the distribution of assets unusual or unexpected?

Other red flags include:

• Isolation of the testator
• High dependency on a single individual
• Provisions that are significantly out of character
• That same individual being involved in preparing or witnessing the documents

This can include selecting or instructing the attorney who prepared the documents

How to Defend Against Challenges

If there’s a risk of future litigation, the best way to fortify the estate plan is for the attorney to prepare detailed and comprehensive notes, so that instead of trying to prove a negative, the attorney prepares a vigorous defense to prove that the testator acted independently and competently.

• Independent legal counsel: Ideally, the testator selects a disinterested attorney on their own, travels to the attorney independently, and meets with the attorney without any aid from the beneficiary.
• Dutiful Child: to the extent that a beneficiary does help the client find or travel to the attorney, notes should indicate that the child is acting as a caring, dutiful offspring.
• Show independence: Demonstrate that the testator made the decisions on their own initiative. In addition, further showing of the independence of the testator and control of the testator’s daily life, including the ability to continue to manage their own affairs subsequent to requesting and executing their estate planning documents helps.
• Explicit Intent and Clear Understanding: The testator should give clear reasons for their decisions, show no ambiguity in their decision, and demonstrate a clear understanding of the effect of the estate plan.
• Valid Reasons: The law doesn’t require a good reason, or any reason at all, for a testator’s intent, but if possible the attorney’s notes should include the Testator’s clear and valid reasons for why the Testator is disinheriting a natural heir or favoring one child over another.
• Rejection of Influence: Rejections of the Beneficiary’s assistance, suggestions, or other requests can go a long way in showing that the beneficiary did not exert undue influence.
• Other Beneficiaries: Financial or testamentary changes that don’t only benefit, directly or indirectly, a sole beneficiary (or related parties), including the appointment of separate fiduciaries.
• Transparent Communication with Impacted Persons: An informed beneficiary is both less likely to challenge a Will, and less likely to succeed. Keeping other family members or friends informed of the planned distributions further protects against a charge of incompetence or undue influence.

Final Thoughts

A diagnosis of Alzheimer’s or cognitive decline is not an automatic disqualifier when it comes to estate planning. With careful assessment, ethical diligence, and thorough documentation, it is still possible to create a valid and enforceable plan that honors the client’s true intentions.