Incapacitated vs. Testamentary Capacity

The Arizona Statutes have a definition for an incapacitated person. The Statute reads as follows:

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. A.R.S. 14-5101

Many people assume that an incapacitated person cannot make a will or trust, but that is not the case in Arizona. Disposing of a person's estate requires only testamentary capacity. There is no statutory definition for testamentary capacity, we have to look to the case law for a definition. The Arizona courts have set forth the standard and have ruled that a testator has sufficient testamentary capacity if he (or she) is merely capable of: (1) understanding that the instrument disposes of his property at death; (2) knowing the general nature and character of his property; and (3) knowing the natural objects of his bounty (i.e. the family members that logically would inherit his property) and understands his or her relationship to them. See In re O’Connor’s Estate, 74 Ariz. 248, 246 P.2d 1063 (1952).

The case of In re the Estate of Green, 40 Ariz. 274, 11 P.2d 947 (1932) held that testamentary capacity could be rebutted by a "Mental derangement sufficient to invalidate a will must be insanity in one of two forms: (1) [i]nsanity of such broad character as to establish mental incompetency generally; or (2) some specific narrower form of insanity under which the testator is the victim of some hallucination or delusion. Even in the latter class of cases, it is not sufficient merely to establish that a testator was the victim so some hallucination or delusion. The evidence must establish that the will itself was the creature or product of such hallucination or delusion . . ." It is apparent that the advances in medicine and the predominance of Alzheimer's disease may seriously affect this definition at some time in the future.

Why do I need a medical directive?

The ability of those who provide medical care to prolong life has exceeded the desire some people have to live. It is not uncommon for someone to fear going on life support more than dying. We have all heard stories of people who are sustained on a life support system long past any hope of recovery or return to useful or even functional life. However, the medical community's fear of lawsuits and claims by relatives forces them to be conservative in the extreme. In this atmosphere of countervailing interests, the need for people to control their own lives has created the need for documents directing medical providers with regard to life-sustaining treatment.

These documents are generally known as advanced directives or living wills. Although the term "living will" is used commonly, it is a misleading term. The medical directive gives instructions to care givers and medical personnel during a person's life and does not have anything to do with transferring property at death.

Generally, the medical directive contains language directing medical to avoid "heroic measures" to prolong life in the event a condition is incurable and terminal. Every state has formal requirements for a Living Will to be valid and enforceable. It is a very good idea to consult with a competent legal advisor before signing such a document.

But I don't have an estate!

Even a homeless person living on the street dies with an "estate." By definition anything you own at the time of your death is in your estate. You may not have an "estate" with enough value to justify a probate action, but you still have an estate. In Arizona, the threshold amount for consideration of a probate is over $50,000 in assets. Below that amount, the Arizona statutes allow an heir to gather and dispose of the estate by "Affidavit." An Affidavit may also be used to transfer real estate of less than $75,000 in value.

The way the law reads for the personal property is, that the value of all of the personal property (cash, bank accounts, stocks and bonds, cars, jewelry, money owed to the person who died, etc.) in the estate of the person who died (the “deceased”), wherever that property is located, less liens and encumbrances, does not exceed $50,000, and at least 30 days have passed since the death.

For real property, the assessed value of the real property (land and permanent structures on the land) in the deceased’s estate located in Arizona, less liens and encumbrances as of the date of the deceased’s death, does not exceed $75,000, and at least 6 months have passed since the
death.

Unfortunately, in today's real estate market many parcels of real property probably qualify for the Affidavit. The Affidavit may also be used by the surviving spouse to collect up to $5000 in wages owed to the deceased.

A person has "standing" (the ability to legally use the Affidavit) if he or she is entitled to the real property and/or personal property, and have the legal right (“legal standing”) to submit an affidavit claiming the property because:

• • He or she is named in a will to receive the property and they can prove it; OR
• • The person who died did not have a will, but the person is related to the decedent as a:

• 1. Surviving Spouse, or
• 2. Child , if there is no surviving spouse – or there is, but he or she is not your
• parent and your parent, the decedent, had separate or community property,
• or
• 3. Parent, if there is no surviving spouse or child, or
• 4. Brother or Sister, if there is no surviving spouse or child or parent.

If there are people with equal or greater right than the person entitled to the property, they must all assigned their entire interests in the estate to the person, which is proven by the copy
of the documents they signed to this effect that must be attached to the affidavit.

In actuality this procedure is quite easy to do, except for one catch; some of the financial institutions refuse to recognize the validity of the Affidavit, even if it is properly executed. We are continually having problems in getting banks and other financial establishments to recognized Affidavits.

What happens to my estate if I die without a will?

Large or small everyone who dies leaves an "estate." Even if the property has no value, anything owned by the decedent during life is considered part of the estate. A person who dies without a will or trust disposing of his or her estate is said to have died "intestate." Most states, Arizona included, have very specific statutory provisions which determine the disposition of the deceased's estate.


Arizona's statutes implement the Uniform Probate Code, first adopted beginning in 1969. Only sixteen states have adopted the entire Uniform Probate Code but many other states have adopted portions of the code. Arizona's statutes essentially write a simple will for everyone who dies intestate. Although the provisions of the Code are uniform, it does not mean they are simple. Some of the provisions, especially those dealing with intestate estates (without a will) are quite complicated.

Under Arizona law, if a person dies intestate his or her property goes to the "heirs" as defined by the statutes. The estate goes first, to a surviving spouse, unless there are children (called issue in the statutes) who are not children of both spouses. In the case of children who are not children of both spouses the division becomes even more complicated and will be the subject of another post. In event there is no spouse, the property goes to a person's children, if there are no children, to the parents, if there are no living parents then to siblings, the statutory scheme finally ends with any cousins. See Arizona Revised Statutes Section 14-2103. Absent the existence of any of the relatives provided for in the statute, then the property goes to the State of Arizona. See Arizona Revised Statutes Section 14-2105.

What is probate?

The legal process of probate dates back hundreds of years and historically has involved the proving of a will. Basically, probate involves the legal administration of the estate of a deceased person to resolve any claims against the estate and distribute the deceased person's property to his or her heirs. If a person dies with a will, their estate is described as "testate." If they die without a will, the estate is intestate.

The person who administers the estate in the U.S. has various names depending on the jurisdiction. They may be called the executor (executrix), administrator (administratrix) and more recently personal representative.

Traditionally in the U.S. the probate process was lengthy and could be very expensive. Beginning in about 1969 some of the states adopted the Uniform Probate Code. Under the Code the fee structure for attorneys in those states was revised and the cost of handling a probate case has decreased dramatically. Most cases, where there are high probate costs involve disputes between the heirs or larger estates with property in various states.

Avoiding Family Controversies Upon Death

There is no question that issues involving the death of a family member or close friend are unpleasant to think about. However, the controversies that can arise between family members when there is not adequate planning is even more unpleasant. I have known many people who were so fearful about the topic that they would not even discuss their affairs with anyone. But no matter how well meaning a person may be, good intentions do not resolve end of life issues.

One of the most common disputes among surviving family members revolves around a misunderstanding as to a realistic valuation of the deceased's estate. If some family members believe that the estate is far more valuable than is actually the case, there is a almost a guarantee that there will be a conflict. In one case I handled recently, the childen believed the deceased to be very wealthy. The facts were otherwise. The Personal Representative of the estate was required to obtain a $1,000,000 bond, but it turned out that the entire estate was less than $10,000.

How could someone get such an inaccurate impression of the valuation of their relative's estate? This usually occurs because of a lack of information. Commonly, houses in joint tenancy are held with a right of survivorship and pass to the joint tenant outside of the estate. Likewise, bank accounts and insurance policies can be set up with a named beneficiary and they also pass outside the probate estate. When all of the jointly held property is taken into a account, a person may have been relatively wealthy during his or her lifetime, but have almost nothing to pass to a potential heir.

Another simple expediency is to identify to your heirs the location and identification of all of your property that might be passed to them through your estate. Too many people have been conditioned by TV shows like Antiques Roadshow to believe that any old item owned by an estate my have an extraordinary value. Sometimes the personal property of the deceased costs more to haul away than it is worth. If your estate could have physical items of potentially high value, then make sure your heirs know about the property and its value. I hear too many stories of valuable antiques or heirlooms being thrown out due to ignorance on the part of the heirs.

Ultimately, the best way to avoid family conflicts after the death of a family member is a good, current, will, a good trust and proper Powers of Attorney and Living Wills.

10 Warning Signs of Alzheimer's -- Sign No. 10

In the past posts I have reviewed some of the most common symptoms and warning signs of Alzheimer's. This is the last in series of warning signs, but it is important to understand that each individual is different. Each person challenged with dementia in any of its forms will not necessarily have all of the symptoms, nor will they progress in each symptom at the same rate as someone else with the same problems. The warning signs are just that, a warning that something might be wrong. If you or one of your circle of concern have any of the symptoms it is a call to take action. Some of the conditions described previously can put the impaired person in deadly danger, not from Alzheimer's but from the effects of the disease. In the Phoenix area, where I live, if an impaired person wanders outside during the summer, they might not live long enough to get help. There are many other situations, like heat in the summer or cold in the winter, that might occur.

The last of the 10 Warning Signs is one of the most difficult to detect, that is changes in mood and or personality. This issue is much more than being irritated at a change in schedule or routine, it is a complex change in the way the person interacts with others. One of the most difficult changes to deal with from a care giver standpoint is paranoia. The Alzheimer's sufferer may misplace common objects and immediately jump to the conclusion that they have been stolen. Since they are having difficulty managing their finances, they may become fearful that someone, even a loved one, is stealing their money. This obsession can go so far that they will start putting money in odd places for safekeeping and then forget where it was located.

As an attorney, I have been regularly called to interview a prospective client who is certain that her money is being stolen. Unfortunately, this is sometimes true, financial exploitation does occur, but more frequently the money or savings are intact and the person is marginally demented.

The personality changes can cause great embarrassment and discomfort to those associated with the impaired person. They may have outbursts of anger for apparently no reason. They may be found hiding in a corner afraid to move. They may call the police regularly to report intruders.

All of these symptoms are just that, symptoms. Some of them may be confused with the typical age-related issues. But if the change becomes regular and repetitive, there may be a problem.

Particularly in the legal and financial areas, it is best to get your finances in order with proper wills and trusts before the impairment becomes too great.