October 25, 2018

A Guide for Practitioners: Standards for Capacity in Arizona

By: Mark E. House and Allison E. Evans*

I.   Capacity in Arizona

“Capacity” in the legal sense means the legal ability to do something.  An individual may be legally incapable of doing something as a result of mental deficiency, marital status or age, to name a few.  Legal capacity in the trust and estate context seems as though it should be a simple issue – i.e., did the client have capacity to execute the document?  What has evolved literally over centuries is a hodgepodge of different levels of capacity depending on the type of document being created, and whether that document is revocable or irrevocable.  This article will explore the differing standards of capacity for the most common estate planning documents (wills, revocable trusts, irrevocable trusts, financial powers of attorney, and medical powers of attorney) as well as capacity issues as they relate to undue influence, financial exploitation, guardianships, conservatorships, gifts, marriage, and financial transactions in general.

II.   Wills

In order to draft a valid will, a testator must be over the age of eighteen and of sound mind.[1]  The test for determining testamentary capacity for a will is “that the testator had to be able to understand the natural objects of his bounty, the kind and character of his property, and the nature of testamentary act.”[2]  The testator’s capacity is tested at the time of the execution of the will.[3]  There is a presumption that a person is sane, and the policy of law favors testacy.[4]  The burden of proof is upon the contestants to produce evidence that one or more of the essential elements of the test for testamentary capacity was missing at the time of execution of the will.[5]

The question of capacity is to be determined by the facts and circumstances of each case.  The Supreme Court of Arizona stated explicitly that, “There is no rule by which it may be determined, with precision, where (testamentary) capacity ends and incapacity begins, but this question should be determined from all the facts and circumstances of each particular case.”[6]  Unfortunately, as a result of the court adopting such a position, the court often fails to detail why a particular finding was made.

A general showing of senility is not sufficient to eliminate testamentary capacity.  Mental derangement sufficient to invalidate a will must be insanity so broad as to produce general mental incompetence or insanity, which causes hallucinations or delusions.[7]  General deteriorating mental condition, eccentricities, idiosyncrasies, or mental slowness and poor memory associated with old age do not necessarily destroy testamentary capacity.[8]  Even a showing of mental retardation, without more, is not sufficient to eliminate testamentary capacity.[9]

                        Teel is of particular interest.  The testator had the functioning capabilities of a ten-to-twelve-year-old child.[10]  He was, however, able to drive, read, and transact simple business (for example, going to the grocery store and contracting for automobile repairs).[11]  The evidence adduced at trial demonstrated that the testator knew who he wanted to benefit from his estate and that he arranged for the preparation and execution of a will.[12]  The court further found that even though a testator had been declared incompetent and had a guardian appointed for him (after the will was signed, but given the diagnosis of mental retardation, the timing would not be factually relevant), that did not eliminate his capacity to execute a will.[13]

Thomas, on the other hand, addressed two issues – first, that the capacity to execute a revocation is the same as the capacity to execute a will; and second, that the appointment of a guardian does not change the presumption regarding capacity.[14]  The issue regarding the presumption is consistent with A.R.S. § 14-2712(B), but is not consistent with the Restatement (Third) of Property (Will & Don. Trans) § 8.1, comment h, which states that an adjudication of incapacity raises a rebuttable presumption that the testator lacked capacity.[15]  The Thomas court rejected the appellant’s argument that the fact that decedent had been adjudged incompetent should be sufficient to overcome the presumption favoring capacity.[16]  It expressly stated that the adjudication of incompetency under the guardianship statute does not of necessity indicate a lack of mental capacity to execute a will, and found that persons under guardianship may still perform valid testamentary acts.[17]  The focus of the court was on the ‘abundant’ evidence reflecting on the decedent’s capacity at the time of execution, showing that he:  (1) knew and understand the nature of the act, (2) knew and understood the nature and extent of his property, and (3) knew the objects of his bounty.[18]  However, there was little detail provided regarding what, exactly, that evidence was.  Instead, the opinion simply reveals that the two witnesses and the friend who brought decedent to the execution ceremony testified that, in their opinion, he was competent.  Thus, Thomas does not elaborate on how the evidence or testimony was probative on any of the three components of the test for testamentary capacity.

Despite most cases failing to discuss in great detail the individual elements of the test for testamentary capacity, the most attention has been given to the requirement that the testator know the “natural objects of his bounty.”  In elaborating on the foregoing, the Arizona Court of Appeals has stated that the relevant test is whether the testator has capacity to know who the objects of his bounty are, and to appreciate his relationship to them.  Thus, it appears that the inquiry is two-pronged.  More specifically, with respect to the ability to understand the natural objects of one’s bounty, the Court of Appeals in In re Weil’s Estate,[19] stated as follows:

The rationale behind the requirement that the testator recollect who are ‘the natural objects of his bounty’ appears to be founded upon the reasoning that one of the purposes of making a will is to change the prospective inheritance of heirs so that they would not take the property of the testator in the manner provided for by intestate succession; and that while prospective heirs have no present legal interest in the testator’s property, the law regards their expectations as something which a competent testator will normally have in mind, for these expectations will by the very act of making a testamentary disposition, be changed. When viewed in this light it is obvious that the injury concerning this element of testamentary capacity must be focused on whether the testator has the Capacity to know who these objects of his bounty are and to appreciate his relationship to them (i.e., they are my sons) and not whether in fact the testator appreciates his moral obligations and duties toward such heirs in accordance with some standard fixed by society, the courts or psychiatrists.[20]

The cited language above makes clear that the requisite knowledge relates to an understanding of who the natural objects of the testator are, and is not related to understanding any moral imperative – real or imagined – that would require someone to be included in the will. However, in addition to being able to know the “who” of one’s bounty, the Weil court also requires the testator appreciate the nature of his relationship to such bounty.[21]  For example, a testator being able to recognize and identify his son as “John” would presumably satisfy the first prong of the test, while recognizing John’s relationship as “my son” would presumably satisfy the second prong of the test.

In another Arizona case, the relevant evidence adduced at trial demonstrated the testator was displaying some confusion about the natural objects of her bounty at the time of execution of the will, yet the document was nevertheless upheld.[22]  In O’Connor’s Estate, the decedent’s attorney testified about the conversation he had with the decedent just before she signed her will.[23]  During that conversation, the decedent expressed her belief that her sister, Nellie, was living.[24]  Nellie however, had died years earlier.[25]  The attorney had to correct the decedent by stating:  “Don’t you know that your sister Nellie has been dead for many years?”[26] With further prodding, the decedent eventually indicated that she did remember that Nellie had in fact died.

Additional testimony at trial revealed the decedent, during the period of time preceding and surrounding the execution, often operated under the delusion that either her sister or husband were still living, when in fact they were not.[27]  Notwithstanding this, the court found that the delusion could not have been said to have influenced the making of the decedent’s will or its terms.[28]  The will left the decedent’s property to another individual – Kelsey – consistent with the decedent’s expressed intentions over a lengthy period of time.[29]  The evidence showed the decedent had a fixed state of mind for a period of years with respect to her plan for disposing of her estate from which she at no time – whether while delusional or sane – deviated from, and thus her confusion about Nellie at the time of execution was deemed irrelevant by the court.[30]

The principles set forth in the O’Connor case were also at issue in In the Matter of Estate of Killen.[31]  In Killen, the decedent began suffering from delusions about family members years before the will in question was executed.[32]  Specifically, she believed certain nieces and nephews who helped care for her were living in her attic, were sprinkling parasites and chemicals down on her, had pulled her tooth and cut her arms with glass, were members of the mafia, and were trying to kill her so that they could take her property.[33]  Although other relatives tried to dissuade her from these bizarre and plainly untrue beliefs, the decedent was insistent that these individuals were out to get her.[34]

Eight days before the decedent in Killen executed her will, she was evaluated by a psychiatrist, Dr. Patel, who diagnosed her with a delusional paranoid disorder.[35]  It was noted that her judgment was compromised by paranoia and that her delusional beliefs were capable of interfering with decision making.[36]  Less that one month after she executed the will, the decedent was admitted to a psychiatric unit where her treating psychiatrist concluded she was having persecutory delusions and suffering from poor insight and impaired judgment, rendering her incapacitated due to mental illness.[37]  At trial, Dr. Patel testified that the decedent could not have had lucid intervals because a delusion is permanent; he concluded that her disorder affected her ability to perceive family members and friends.[38]  In his opinion, a person with delusional paranoia, when family and friends are involved in the delusions, would be unable to make a valid will.[39] Another testifying psychiatrist explained that the decedent’s delusions would have influenced the writing of the will because her belief that the individuals close to her were trying to destroy her would have been uppermost in her mind when she contemplated actions toward them.[40]  Thus, he concluded that her perception of the beneficiaries was not rational nor lucid.[41]

The proponent of the decedent’s will called her own psychiatrist, Dr. Bendheim, who had never personally treated or examined the decedent, to offer contradicting testimony at trial.[42]  He testified that there was no question that the decedent was psychotic, paranoid, and suffering from a delusional disorder.[43]  However, he believed that the decedent nevertheless had testamentary capacity because:  (1) she knew that she was executing a will, (2) she knew the natural objects of her bounty, and (3) she was aware of the extent of her estate.[44]  The trial court rejected Dr. Bendheim’s conclusions, finding that the decedent’s delusions were false, fixed, and unshakable in her mind at the time she executed the will, rendering her unable to know the natural objects of her bounty and to appreciate her relationships with them.[45]  As such, the court concluded that the decedent lacked testamentary capacity and withdrew the will from probate.[46]

On appeal, the issue in Killen was whether a testator’s will is valid if she knows the natural objects of her bounty, but has a misperception of some family members due to insane delusions.[47]  The appellant argued that the testator need only have the ability to know the natural objects of her bounty, and that it is not necessary that she possess an accurate perception of her relationships or have plausible, justifiable reasons for her opinions about her family members.[48] The Arizona Court of Appeals rejected this argument.[49]  It reasoned that “if a person has sufficient mental ability to make a will but is subject to an insane delusion as to one of the essential requirements of testamentary capacity, the will would not be valid.”[50]  Where the mental illness produces insane delusions that render the testator unable to evaluate or understand relationships with the natural objects of his bounty, and that inability affects the terms of the will, then the testator lacks capacity to make a valid will.[51]  The evidence adduced at trial was more than sufficient to support the conclusion that the decedent suffered from a delusionary condition that affected the terms of her will.[52]  Her insane delusions, as explained by the testifying doctors, controlled her perceptions of the beneficiaries/relatives and her treatment of them in the will.[53]  Decedent’s animosity toward these individuals was completely based on her delusional belief system, causing her to almost entirely disinherit them without any justifiable basis in fact.[54]  For all of these reasons, the judgment of the trial court was upheld.[55]

The Restatement (Third) of Property (Wills & Don. Trans.) § 8.1 takes a somewhat different, broader view of natural objects of the testator’s bounty.  Comment c provides as follows:

The natural objects of a testator’s bounty include the testator’s closest family members, who are not limited to blood or adoptive relatives or to those who would take by intestacy. For example, a testator’s stepchildren are natural objects of the testator’s bounty, even though stepchildren do not ordinarily take by intestacy.[56] Relatives by affinity do not take by intestacy but could be counted as natural objects of a testator’s bounty in the case in which the testator was close to them. To have testamentary capacity, the testator need not know the identity or location of remote relatives who are beyond his or her immediate family circle.

The natural objects of the testator’s bounty might include nontraditional as well as traditional family members.[57]

Frankly, there is a complete lack of guidance regarding what it means to understand the nature and extent of one’s property or an understanding of the testamentary act.  While these components of the testamentary capacity test are often cited to, the case law fails to elaborate on their meaning or what evidence would be helpful in analyzing same.  How does one determine if a testator sufficiently appreciates the testamentary act he is performing?  To what extent must a testator know the nature and extent of his property?  Must he be able to describe all assets he owns in specific or detail, or do mere generalities suffice?  These types of questions abound, and unfortunately, they have yet to be answered.

III.   Revocable Trusts and Testamentary Trusts

A.R.S. § 14-10402(A)(1) provides that the settlor must have capacity to create a trust.[58]  Arizona did not adopt Section 601 of the Uniform Trust Code, which states that the capacity necessary to create a revocable trust is the same as that necessary for a will.[59]

Restatement (Third) of Trusts § 11(2) provides that “a person has capacity to create a revocable inter vivos trust by transfer to another or by declaration to the same extent that the person has capacity to create a trust by will.”[60]

Similarly, if a person has capacity to create a will, capacity also exists for the creation of a testamentary trust.

The reasoning behind this is sound.  Given that revocable trusts are designed in significant part as will substitutes (and testamentary trusts are created in wills), the same level of capacity is required.

IV.   Irrevocable Trusts

                        The standard for the execution of an irrevocable trust is the same as that required to transfer property outright inter vivos.[61]  This means that an irrevocable trust can be created if the settlor has the capacity to make a gift.

The theory behind this is that the transfer effectively depletes the resources of the settlor currently, and therefore requires a higher level of capacity than a transfer that is to take effect upon death.

V.   Internal Standards for Capacity

Often, estate planning documents, specifically revocable living trusts and powers of attorney, contain a distinct, internal definition of capacity/incapacity in addition to setting forth a process for how a determination of such incapacity is to be made.  This can be relevant in a variety of situations; notably, for example, whenever a grantor/trustee is determined to lack capacity, the successor trustee(s) designated in the document will take over and begin to manage the trust estate on behalf of the grantor and beneficiaries.

Defining capacity within the document provides a wide amount of flexibility to the grantor and drafter of the document, as other commonly used and known legal definitions of capacity do not necessarily have to be employed.  Thus, a grantor could include either a higher or lower standard than the default legal standards for capacity, depending on the grantor’s preferences and circumstances.

A.R.S. § 14-10105(B)(1) provides that the “terms of a trust prevail over any provision of this chapter except . . . the requirements for creating a trust.”[62]  A.R.S. § 14-10602(A), provides, however, that “[u]nless the terms of a trust expressly provide that the trust is irrevocable, a settlor may revoke or amend the trust subject to any limitations prescribed in the terms of the trust.”[63]  The “subject to limitations prescribed in the terms of the trust” language of the statute is not part of the uniform act.  At least under Arizona law, it appears that a capacity standard set forth in a document that must be met in order to amend or revoke the document will be followed.

VI.   Gifts

                        In the absence of a statute to the contrary, a person of adequate mentality has the right to give away part or all of his property.[64] Essential elements of “gift” are that the donor manifest clear and unmistakable intent to give property and pass possession and control, and the owner’s surrender of dominion and control of property must be voluntary and intentional.[65]

In order to make a current gift, the donor “must have the mental capacity necessary to make or revoke a will and must also be capable of understanding the effect that the gift may have on the future financial security of the donor and of anyone who may be dependent on the donor.”[66]  Thus, the capacity to gift is clearly a higher standard than that for making a will.

Nearly a century ago, Arizona adopted a similar standard for gifts.  In Pass v. Stephens, the court stated “[i]t is well settled that mere mental weakness in the grantor does not invalidate a deed. To have that effect the mental power must be so far deteriorated or destroyed that the grantor is incapable of understanding in a reasonable degree and knowing the consequences of the instrument he executes.”[67] However, there are not more current or expansive cases in Arizona on this subject.

VII.   Contracts

Each party to a contract must have sufficient capacity to contract in order for the contract to be binding.[68]  Generally, one lacking the legal capacity to form a contract may not be bound by it.  A natural person who manifests assent to a transaction has full legal capacity to incur contractual duties unless the person is mentally incompetent, an infant, or intoxicated.[69]

Under the Restatement, a person with a mental illness or defect who enters into a contract may void the person’s contractual duties upon a showing that the person is unable to understand in a reasonable manner the nature and consequences of the transaction or the person is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of this condition.  Where the contract is made on fair terms and the other party has no knowledge of the mental illness or defect, the power of avoidance may terminate.[70]  The capacity to contract involves a person’s inability to understand the terms of an agreement and not his or her actual understanding.[71]  Furthermore, a capacity to contract relates to the status of the person rather than the circumstances surrounding the transaction.[72]  Thus, an ability to act with judgment and discretion is not required in order to be able to contract; all that is required is that a party understands in a reasonable manner the nature and consequences of his or her transactions.

The capacity to contract in Arizona is essentially the same as the capacity to make a gift; that is, one must have an understanding of the nature and consequences of his or her acts, and must be able to understand the character of the transaction in question.[73]  The Hendricks court also relied on the Pass standard regarding gifts set forth in its opinion.  Any lack of capacity must be proven by a party by clear and convincing evidence.[74]

At common law, and in the modern day, children or minors are generally thought not to have the legal capacity to contract.  Arizona establishes the age of majority as eighteen, and as a general rule, minors are not bound by contractual undertakings.[75]  However, even minors will be held legally responsible for certain contracts, such as those made for “necessaries,” with the question of what is or is not necessary being one of law.[76]

If a party is so intoxicated he is unable to comprehend the terms of the contract he is entering into, the contract is voidable, although a court will not find it automatically void.[77] The test for determining whether a person is competent to form a contract is whether he has the ability to reasonably understand the nature and effect of his actions. If the party was incapacitated at the time of contracting, that party must repudiate the contract with due haste. This option does not foreclose a party’s election upon sobriety and comprehension of the agreement’s terms to affirm the contract, thus making it valid and binding.  Under the Restatement, the competency standard in intoxication cases is equivalent to the mental illness repudiation criterion; if the intoxication is so extreme as to prevent any manifestation of assent, there is no contract.  If the resulting transaction is one that a reasonably competent person might have made, it cannot be avoided even though entirely executory.[78]

VIII.   Other Revocable Transfers

                        The standard for naming a beneficiary of a life insurance policy or some other form of a pay on death account is the same as that required for a will – that is, testamentary capacity.[79]

IX.   Durable General Powers of Attorney

A.R.S. § 14-5506(D)(1) provides that “capacity” means that “at the time the power of attorney was executed the principal was capable of understanding in a reasonable manner the nature and effect of the act of executing and granting the power of attorney.”[80]   This is consistent with the test established in Golleher v. Horton.[81]  The definition is limited to that particular section, but given the consistency between the statute and Golleher, one can assume that is the relevant standard for capacity to execute a power of attorney.

In Golleher, the validity of a financial power of attorney was challenged on the basis that the principal lacked capacity to execute the power of attorney.[82]  Ruth Golleher was the appointed personal representative of the estate of Arthur Hunter.[83]  The underlying action taken by the agent (Mary Horton) was the revocation of a trust.[84]

Ruth argued that the appropriate standard for determining capacity was the capacity to contract and the capacity for a guardianship.[85]  Mary argued to the trial court that the standard should be testamentary capacity.[86]  On appeal, she argued that it should be whether a person is capable of understanding the nature and effect of the act in which the person is engaged.[87]

The court ultimately ruled that the appropriate standard is “whether the person is capable of understanding in a reasonable manner, the nature and effect of his act.”[88]

If one assumes that the converse of “capacity” is “incapacity”, then the agent would be acting (assuming the springing event is tied to capacity) when the principal could no longer understand the nature and effect of the act of creating the power of attorney.

X.   Conservatorships

A.R.S. § 14-5401(A)(2) provides that a conservator may be appointed if “the person is unable to manage the person’s estate and affairs effectively for reasons such as mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication, confinement, detention by a foreign power or disappearance.”[89]

Given the significant overlap in the acts taken by an agent under a general power of attorney and a conservator, having a different standard for capacity – even if the difference is merely semantic – is questionable.  The 2006 Uniform Durable Power of Attorney Act (the “DPOAA”) takes this position.  In the official comment to Section 102 of the DPOAA, the drafters specifically reference the standard for capacity for conservatorships as the operative standard.[90]

XI.   Health Care Powers of Attorney

A.R.S. § 36-3221(A)(3) provides that a person may execute a health care power of attorney if the person “appeared to be of sound mind and free from duress at the time of execution of the health care power of attorney.”[91]  The agent’s authority is triggered when the principal is unable to make and communicate health care decisions.[92]

Frankly, there appears to be a gap between the capacity to execute the power of attorney (sound mind) and the triggering event for the agent to make decisions (principal unable to do so).

Mental health care powers of attorney have a different standard for the triggering event for the agent to make decisions, but not a separate capacity standard for executing the instrument.[93]  The triggering event is “incapable”, which means the inability to give informed consent, which is further defined in A.R.S. § 36-501(19), as the ability to make a “voluntary decision following presentation of all facts necessary to form the basis of an intelligent consent by the patient or guardian with no minimizing of known dangers of any procedures.”[94]

XII.   Guardianships

A.R.S. § 14-5101(3) provides the definition of incapacity as “any person who is impaired by reason of mental illness, mental deficiency, mental disorder, physical illness or disability, chronic use of drugs, chronic intoxication or other cause, except minority, to the extent that he lacks sufficient understanding or capacity to make or communicate responsible decisions concerning his person.”[95]

The Arizona Court of Appeals provided further guidance on this standard in In re Guardianship of Reyes,[96] stating the standard is a:

“determination that an adult cannot make ‘responsible decisions concerning his person’ and is therefore incompetent, may be made only if the putative ward’s decisionmaking process is so impaired that he is unable to care for his personal safety or unable to attend to and provide for such necessities as food, shelter, clothing, and medical care, without which physical injury or illness may occur.”[97]

This standard was reaffirmed most recently in an unpublished opinion, Hood v. Ruhl.[98]

The guardianship standard may be the closest the law comes to reflecting the medical standard for capacity.

XIII.   Vulnerable Adults

“Vulnerable adult” is a statutory concept contained within the provisions of the Arizona Adult Protective Services Act (“APSA”).[99]  Under A.R.S. § 46-451(A)(9),[100] a vulnerable adult is defined as an individual who is eighteen years or older and who is unable to protect himself from abuse, neglect or exploitation by others because of a physical or mental impairment; it also includes an incapacitated person as defined in A.R.S. § 14-5101.  An incapacitated person under APSA is a person that cannot make informed decisions.[101] A vulnerable adult may still have the capacity to make financial decisions, deed property, and transfer cash.[102]  Thus, a vulnerable person may be able to make some decisions and need not be fully functionally incapacitated; they are, however, unable to take normal steps to protect against the risk of exploitation or abuse by virtue of some decreased or deteriorated cognitive, physical or emotional functioning.

Not every adult who suffers from an illness is impaired.  Someone may be blind, but it does not necessarily follow that such person would be unable to protect himself or herself. The relevant inquiry is whether that person could take the necessary and reasonable steps to identify the harm occurring, and to effectively protest and seek intervention and/or redress.

A.R.S. § 46-456(A) provides that a “person who is in a position of trust and confidence to a vulnerable adult shall use the vulnerable adult’s assets solely for the benefit of the vulnerable adult and not for the benefit of the person who is in the position of trust and confidence to the vulnerable adult or the person’s relatives”[103] unless one of several specific exceptions applies.  If the foregoing elements are established, the person perpetrating the financial exploitation is subject to actual damages and reasonable costs and attorneys’ fees incurred in pursuing the civil cause of action either by or on behalf of the vulnerable adult (or his/her estate).[104]  The court may also award additional damages up to two times the amount of the actual damages.[105]

Financial exploitation cases are often accompanied by challenges to the vulnerable adult’s estate planning documents for lack of capacity and/or undue influence. Because of this, A.R.S. § 46-456(C) empowers courts to additionally order the forfeiture of the perpetrator’s interest under any testamentary or other governing instrument of the vulnerable adult.[106]  When this occurs, the perpetrator is treated as having disclaimed his or her interest under the instrument.

XIV.   Susceptibility to Undue Influence

                        Undue influence occurs when someone overpowers or subverts the independent will and decision-making of the testator and causes him or her to execute documents which do not conform to his or her own wishes.[107]  Suggestion or pleading, persuasion, ingratiating behavior do not in and of themselves indicate undue influence has occurred; rather, there must be evidence that the person executed documents or made decisions that were contrary to his or her independent wishes due to some form of manipulation or pressure.[108]

In determining whether a contestant has established that a will has been procured through undue influence, significant indicia of presence or absence of such influence include: whether the alleged influencer has made fraudulent representations to the decedent; whether execution of will was the product of hasty action and concealed from others; whether the person benefited by the will was active in securing its drafting and execution; whether the will as drawn was consistent or inconsistent with prior declarations and plannings of the decedent; whether the will was reasonable rather than unnatural in view of the testator’s circumstances, attitudes and family; whether the testator and person benefitted have a confidential relationship; and whether the testator was a person suspectible to undue influence.[109]

Compared to vulnerability, undue influence is more focused on the intent and action of the perpetrator.  A vulnerable adult is likely vulnerable to any number of possible perpetrators, while undue influence is situational.  Some conditions, however, make individuals more susceptible to undue influence.  Some examples may include isolation from family and friends, apathy, physical frailness, illness, disability, cognitive impairment, and psychological and emotional conditions affecting dependency and insight.  Many of these conditions could, in and of themselves, result in vulnerability; thus, if someone qualifies as a vulnerable adult, they are quite likely to also be susceptible to undue influence, although the concepts are distinguishable.

XV.   Unsound Mind

                        A.R.S. § 12-502 provides as follows:

If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues either under eighteen years of age or of unsound mind, the period of disability shall not be deemed a portion of the period limited for commencement of the action. Such person shall have the same time after removal of the disability which is allowed to others.[110]

The focus of the unsound mind inquiry under Arizona’s “unsound mind” tolling statute is on cognition, not competency.[111]  The tolling statute is premised on equitable principles that underlie the discovery rule:  it is unfair to bar an action in which the plaintiff is mentally disabled and thus unable to appreciate or pursue his or her legal rights.[112]  While the purpose of the discovery rule and of the tolling provision where plaintiff is of unsound mind are essentially similar, their applications are critically distinct; the discovery rule contains an informational component requiring that the factfinder determine when plaintiff knew or should have known facts that constitute the cause of action, while tolling for unsound mind requires that the factfinder determine whether plaintiff had mental capacity to bring claim based on those facts.[113]

Under Arizona law, being of “unsound mind,” for purposes of A.R.S. § 12-502, means that a person is unable to manage his daily affairs or to understand his legal rights or liabilities; the definition is in the disjunctive, i.e., a plaintiff may be of unsound mind if either of these conditions exists, and the court must consider both alternatives.[114]  A litigant need not be institutionalized nor judged legally incompetent to qualify for tolling of a limitations period under Arizona’s “unsound mind” tolling statute.[115]  It is insufficient to summarily claim inability to bring the action as a result of mental disability as basis for tolling statute of limitations on grounds of unsound mind, as policy of protecting defendants against stale and fraudulent claims cannot be overcome by conclusory averments such as assertions that one was unable to manage daily affairs or understand legal rights and liabilities, and plaintiff instead must set forth specific facts – hard evidence – supporting the conclusion of unsound mind.[116]  If there is hard evidence that a person is simply incapable of carrying on the day-to-day affairs of human existence, then the statute of limitations is tolled; otherwise, it is not.[117]

XVI.   Testify

                        In order to have capacity to testify (and the presumption is that a witness is competent to do so), the witness must be of sound mind.[118]  “The test to determine whether a witness’ mind is so unsound as to require that he be excluded as incompetent to testify is whether the witness’ mental derangement or defect is such that he is deprived of the ability to perceive the event about which he is to testify or is deprived of the ability to recollect and communicate with reference thereto.”[119]

The Arizona Court of Appeals provided a valuable discussion about competency in Zimmer v. Peters,[120] stating that, “[c]ompetency, a question of law for the court, inquires into the witness’ capacity or ability to observe, recollect, and communicate with reference to the event in question.[121]  Credibility is a question for the fact finder and examines the reliability of the witness’ testimony.”[122]  In Zimmer, the plaintiff had suffered a head injury in a golf cart accident.  The defendant attempted to exclude her testimony because of her memory deficits, which made her testimony questionable regarding its accuracy.[123]  The trial court granted summary judgment in favor of the defendant.[124]  The appellate court reversed and held that this was an issue of credibility, not competency, and the conflicting testimony should have been allowed.[125]

As noted in Zimmer, in general, “when a proposed witness’ competency is called into question, discretion should be exercised in favor of allowing the witness to testify:

The Advisory Committee’s Note attending Rule 601 of the Federal Rules of Evidence, which Arizona adopted with little variation, states that:

Discretion is regularly exercised in favor of allowing the testimony. A witness wholly without capacity is difficult to imagine. The question is one particularly suited to the jury as one of weight and credibility, subject to judicial authority to review the sufficiency of the evidence.”[126]

From the Advisory Committee’s Note and its blessing in Zimmer, witnesses will very rarely be excluded on competency grounds from being allowed to testify.

XVII.   Marriage

Article 1 of Title 25 of the Arizona Revised Statutes is titled “Capacity of Persons to Marry.”[127]  Despite the name, nothing in Title 25 addresses the mental capacity to marry.  As such, one can assume the common law would apply.  The capacity to marry is the ability to understand the nature, effect, duties, and obligations of marriage.[128] There does not appear to be any Arizona cases on point, but the general rule from the ALR seems sound.  This is clearly lower than the capacity to contract, but may be similar to the standard for a guardianship.[129]

* Mark E. House and Allison E. Evans are partners at Becker & House, PLLC, who specialize in trust and estate litigation and administration.

[1] Ariz. Rev. Stat. Ann. § 14-2501 (2017).

[2] In re Walter’s Estate, 77 Ariz. 122, 267 P.2d 896 (1954).

[3] In re O’Connor’s Estate, 74 Ariz. 248, 246 P.2d 1063 (1952).

[4] Ariz. Rev. Stat. Ann. § 14-2712 (2017); In re Walter’s Estate, 77 Ariz. 122, 267 P.2d 896 (1954); In re Greene’s Estate, 40 Ariz. 274, 11 P.2d 947 (1932).

[5] In re Walter’s Estate, 77 Ariz. 122, 267 P.2d 896 (1954).

[6] In re Westfall’s Estate, 74 Ariz. 181, 245 P.2d 951 (1952) (citing Slater v. Phipps, 193 Okla. 267, 143 P. 2d 133 (1943)).

[7] Evans v. Liston, 116 Ariz. 218, 568 P.2d 1116 (App. 1977).

[8] In re Estate of Killen, 188 Ariz. 562, 937 P.2d 1368 (Ariz. 1996).

[9] In re Teel’s Estate, 14 Ariz.App. 371, 483 P.2d 603 (1971).

[10] Id. at 374, 483 P.2d at 605.

[11] Id.

[12] Id. at 373, 483 P.2d at 605.

[13] See also, In re Thomas’ Estate, 105 Ariz. 186, 461 P.2d 484 (1969) (appointment of guardian before execution of a revocation of a will does not of necessity indicate a lack of testamentary capacity).

[14] In re Thomas’ Estate, 105 Ariz. 186, 186, 461 P.2d 484, 486 (1969).

[15] See Ariz. Rev. Stat. Ann. § 14-2712(B) (2017); Restatment (Third) of Prop.: Wills and Donative Transfers § 8.1 cmt. h (Am. Law Inst. 2003).

[16] In re Thomas’ Estate, 105 Ariz. 186, 189, 461 P.2d 484, 487 (1969).

[17] Id. at 189, 461 P.2d at 487.

[18] Id.

[19] In re Weil’s Estate, 21 Ariz. App. 278, 518 P.2d 995 (Ariz. Ct. App. 1974).

[20] Emerich v. Arendt, 179 Ark. 186, 14 S.W.2d 547 (1929).

[21] In re Weil’s Estate, 21 Ariz. App. at 381, 518 P.2d at 990.

[22] In re O’Connor’s Estate, 74 Ariz. 248, 246 P.2d 1063 (1952).

[23] Id. at 248, 246 P.2d at 1063.

[24] Id. at 250, 246 P.2d at 1065.

[25] Id.

[26] Id.

[27] Id. at 259, 246 P.2d at 1070.

[28] Id.

[29] In re O’Connor’s Estate, 74 Ariz. 248, 246 P.2d 1063 (1952).

[30] Id. at 248, 246 P.2d at 1063.

[31] In re Estate of Killen, 188 Ariz. 562, 937 P.2d 1368 (Ariz. 1996).

[32] Id. at 563-564, 937 P.2d at 1369-70.

[33] Id. at 564, 937 P.2d at 1370.

[34] Id.

[35] Id.

[36] Id.

[37] Id.

[38] Id.

[39] In re Estate of Killen, 188 Ariz. 562, 564 937 P.2d 1368, 1370 (Ariz. 1996).

[40] Id.

[41] Id.

[42] Id.

[43] Id.

[44] Id.

[45] In re Estate of Killen, 188 Ariz. 562, 564-565, 937 P.2d 1368, 1370-1371 (Ariz. 1996).

[46] Id. at 565, 937 P.2d at 1371.

[47] Id.

[48] Id.

[49] Id.

[50] Id.

[51] Id. at 566, 937 P.2d at 1372.

[52] Id.

[53] Id.

[54] Id. at 567, 937 P.2d at 1373.

[55] Id. at 564, 937 P.2d at 1370.

[56] (See Restatment (Third) of Prop.: Wills and Donative Transfers § 2.5, cmt. j)

[57] See Restatment (Third) of Prop.: Wills and Donative Transfers § 8.1, cmt c (Am. Law Inst. 2003).

[58] Ariz. Rev. Stat. Ann. § 14-10402(A)(1) (2017).

[59] Unif. Trust Code § 601 (Unif. Law Comm’n 2000).

[60] Restatement (Third) of Trusts § 11(2).

[61] Restatement (Third) of Trusts § 11(2).

[62] Ariz. Rev. Stat. Ann. § 14-10105(B)(1) (2017).

[63] Ariz. Rev. Stat. Ann. § 14-10602(A) (2017).

[64] Amado v. Aguirre, 63 Ariz. 213, 161 P.2d 117 (1945).

[65] McNabb v. Fisher, 38 Ariz. 288, 299 P. 679 (1939).

[66] Restatment (Third) of Prop.: Wills and Donative Transfers § 8.1(c) (Am. Law. Inst. 2003).

[67] Pass v. Stephens, 22 Ariz. 461, 198 P. 712 (1921).

[68] Restatement (Second) of Contracts §§ 12, 18; Escareno v. Kindred Nursing Centers West,  239 Ariz. 126, 366 P.3d 1016 (Ariz. Ct. App. 2016).

[69] Ariz. Rev. Stat. Ann. §§ 14-5101, 12-502 (2017); Restatement (Second) Contracts § 12 (1981).

[70] St. Paul Fire & Marine Ins. Co. v. Muniz, 19 Ariz.App. 5, 504 P.2d 546 (Ariz. Ct. App. 1972).

[71] 17 C.J.S. Contracts § 31.

[72] Id. 

[73] Hendricks v. Simper, 24 Ariz.App. 415, 539 P.2d 529 (Ariz. Ct. App. 1975).

[74] Hendricks, at 418, 539 P.2d at 532.

[75] Ariz. Rev. Stat. Ann. § 1-215 (2017); Woman Motor Co. v. Hill, 54 Ariz. 227, 94 P.2d 865 (1939).

[76] Valencia v. White, 134 Ariz. 139, 654 P.2d 287 (Ariz. Ct. App. 1982).

[77] Restatement (Second) of Contracts § 15 (1981).

[78] Restatement (Second) of Contracts § 15, cmts. a, b (1981).

[79] See Restatment (Third) of Prop.: Wills and Donative Transfers § 8.1, cmt. e (Am. Law Inst. 2003).

[80] Ariz. Rev. Stat. Ann. § 14-5506(D)(1) (2017).

[81] Golleher v. Horton, 148 Ariz. 537, 715 P.2d 1225 (App. 1985).

[82] Id. at 539, 715 P.2d at 1227.

[83] Id.

[84] Id.

[85] Id.

[86] Golleher, at 539, 715 P.2d at 1227.

[87] Id.

[88] Id. at 540, 715 P.2d at 1228.

[89] Ariz. Rev. Stat. Ann. § 14-5401(A)(2) (2017).

[91] Ariz. Rev. Stat. Ann. § 36-3221(A)(3) (2017).

[92] Ariz. Rev. Stat. Ann. § 36-3223(A) (2017).

[93] Ariz. Rev. Stat. Ann. § 36-3281 (2017).

[94] Ariz. Rev. Stat. Ann. § 36-501(19) (2017).

[95] Ariz. Rev. Stat. Ann. § 14-5101(3) (2017).

[96] In re Guardianship of Reyes, 152 Ariz. 235, 731 P.2d 130 (App. 1986).

[97] Reyes, 152 Ariz. at 236, 731 P.2d at 131 (citing In re Boyer, 636 P.2d 1085 (Utah 1981)).

[98] Hood v. Ruhl, 2016 WL 1003014 (Ariz. Ct. App. 2016).

[99] Arizona Adult Protective Services Act, Ch. 127, § 2 (codified as Ariz. Rev. Stat. § 46-451(A)(9) (1980)).

[100] Ariz. Rev. Stat. Ann. § 46-451(A)(9) (2017).

[101] Davis v. Zlatos, 211 Ariz. 519, 123 P.3d 1156 (Ariz. Ct. App. 2005).

[102] Id.

[103] Ariz. Rev. Stat. Ann. § 46-456(A) (2017).

[104] Ariz. Rev. Stat. Ann. § 46-456(B) (2017).

[105] Ariz. Rev. Stat. Ann. § 46-456(B) (2017).

[106] Ariz. Rev. Stat. Ann. § 46-456(C) (2017).

[107] In re McCauley’s Estate, 101 Ariz. 8, 415 P.2d 431 (Ariz. Ct. App.1966).

[108] Id. at 10, 415 P.2d at 433.

[109] Mullin v Brown, 210 Ariz. 545, 115 P.3d 139 (Ariz. Ct. App. 2005).

[110] Ariz. Rev. Stat. Ann. § 12-502 (2017).

[111] Cecala v. Newman, 532 F. Supp. 2d 1118 (D. Ariz. 2007).

[112] Id.

[113] Doe v. Roe, 191 Ariz. 313, 955 P.2d 951 (1998).

[114] Tavilla v. Cephalon, Inc., 870 F. Supp. 2d 759 (D. Ariz. 2012).

[115] Cecala v. Newman, 532 F. Supp. 2d 1118 (D. Ariz. 2007).

[116] Doe v. Roe, 191 Ariz. 313, 955 P.2d 951 (1998).

[117] Cecala v. Newman, 532 F. Supp. 2d 1118 (D. Ariz. 2007).

[118] Ariz. Rev. Stat. Ann. § 12-2202(1) (2017).

[119] State v. Brown, 102 Ariz. 87, 425 P.2d 112 (1967).

[120] Zimmer v. Peters, 176 Ariz. 426, 861 P.2d 1188 (Ariz. Ct. App. 1993),

[121] State v. Roberts, 139 Ariz. 117, 121, 677 P.2d 280, 284 (Ariz. Ct. App. 1983).

[122] Id.

[123] Zimmer, 176 Ariz. at 429, 861 P.2d at 1191.

[124] Id.

[125] Id. at 431, 861 P.2d at 1193.

[126] Id. (citing State v. Piatt, 132 Ariz 145, 149, 644 P.2d 881, 885 (1981)).

[127] See generally Ariz. Rev. Stat. § 25.

[128] M. C. Dransfield, Annotation, Mental Capacity to Marry, 82 A.L.R. 2d 1040.

[129] See In re Driskell, 555 N.E.2d 428 (Ill. App. Ct. 1990), aff’d in part, rev’d in part on other grounds by Pape v. Byrd, 582 N.E.2d 164 (Ill. 1991).