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Mental/Testamentary Capacity: Contracts, Wills, Trusts

Mental capacity generally refers to a signatory’s state of mind when he/she signs a document. To be valid, the signatory’s mental capacity must be clear, lucid and free from any undue influence or restraint. It is not uncommon for documents to be challenged for lack of capacity. Depending on the document, the legal standards governing the challenge differ.

The mental capacity required to make a contract is higher than the mental capacity required to make a will or trust. The specific question is whether on the day in question whether the signatory had sufficient mental capacity to understand the “nature and effect of the particular transaction.” McElroy v. Matthews, 263 S.W.2d 1, 10 (Mo. 1953). The reason for this is that contracts often are arm’s length transactions and embrace matters requiring mature consideration and reflection. Id. Note that this standard applies essentially to all types of contracts, including beneficiary (i.e., transfer on death, payable on death ) designations. See Ivie v. Smith, (No. SC 93872 page 25) (Mo. 2014).

Testamentary capacity is a less strict standard. Testamentary capacity exists if — at the time the will or trust was signed — the testator was of sound mind, understood the ordinary affairs of life, knew the nature and extent of his/her property, knew the persons who were the natural objects of his/her bounty, and appreciated his/her natural obligations to those persons. Lewis v. McCullough, 413 S.W.2d 499, 505 (Mo. 1967). The test is “to comprehend and understand the ordinary, as distinguished from the intricate and complicated affairs of life.” Ahmann v. Elmore, 211 S.W.2d 480, 488-89 (Mo. 1948).

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