Mind and Money: How California Law Decides if a Parent Can Make Estate Decisions

When an aging parent’s memory or decision-making skills begin to fade, adult children often face a difficult question: Can Mom or Dad still sign legal documents? In California, the answer depends on the type of decision and the legal capacity standard that applies.

Capacity is not a single test—it’s a sliding scale. The law recognizes that a person might be able to make some decisions but not others. In Kern County, as elsewhere in California, understanding these distinctions can mean the difference between honoring your parent’s wishes and ending up in an expensive, emotionally draining court battle.

Why Capacity Matters in Estate Planning

Under California Probate Code, “capacity” is a legal determination about a person’s ability to make decisions, not simply a medical diagnosis. Probate Code sections 810–813 require that the court presume a person has capacity unless it is proven otherwise.

Capacity affects:

• Managing finances – paying bills, banking, investing.
• Entering contracts – signing agreements with legal consequences.
• Creating or changing estate plans – wills, trusts, beneficiary designations.

If capacity is absent at the time of signing, the transaction can be invalidated. That’s why proactive assessment and documentation are crucial.

Three Key Types of Legal Capacity

1. Capacity to Manage Financial Affairs

This is about whether a person can make financial decisions and resist undue influence. Under Probate Code section 812, they must be able to understand the nature of the decision and its consequences.

Example: Paying monthly utilities, explaining where income comes from, or deciding whether to sell an asset.

Evidence courts may look for: Consistent banking records, ability to describe transactions, coherent explanations of income and expenses.

2. Capacity to Enter into a Contract

California Civil Code section 1556 states that a person must have the mental capacity to understand the nature, purpose, and effect of the agreement. This is a higher threshold than financial management alone.

Example: Signing a long-term in-home care contract or selling a vehicle.
The person must grasp not only the transaction itself but the binding legal obligations that come with it.

3. Capacity to Make a Will or Trust

This is called testamentary capacity and is often the lowest legal threshold. Under Probate Code section 6100.5, a person has capacity to make a will if they can:

1. Understand the nature of the testamentary act,
2. Recollect and understand the nature and situation of their property, and
3. Remember and understand their relations to the people whose interests are affected.

Example: Even with mild dementia, a parent may still know, “I want my house to go to my three children” and recall what property they own.

How Courts Decide Capacity

Courts start with the presumption that a person has capacity. (Prob Code, § 810.) The burden of proof is on the person challenging the decision.

A parent may have lucid intervals, meaning a period of clarity during which they can legally sign a document—even if they sometimes show confusion. Evidence is key, and the most persuasive records are contemporaneous medical evaluations, detailed attorney notes, and testimony from neutral witnesses.

Building a Record of Capacity Before Estate Planning

Medical Examinations

Encourage your parent to have an evaluation from a primary care doctor or a geriatric specialist. Common cognitive assessments include:

• Mini-Mental State Examination (MMSE)
• Montreal Cognitive Assessment (MoCA)
• Clock Drawing Test

Have the physician’s report dated, signed, and placed in the estate planning file.

Attorney’s Capacity Notes

An estate planning attorney should meet privately with the parent, asking questions tied to the relevant legal standard. Detailed notes about the parent’s answers, demeanor, and apparent understanding become valuable evidence if the plan is challenged.

Third-Party Witness Statements

Neutral witnesses who observe the signing can provide sworn statements. In some cases, video recording the signing is helpful—but be aware it can also provide challengers with material to critique.

When to Seek a Court Determination

In high-conflict families, or when there is a history of undue influence, it may be wise to obtain a court determination of capacity or even seek a limited conservatorship. This formal finding provides strong protection against later claims of invalidity, but it also carries privacy and cost considerations.

Key Takeaways for Kern County Families

• California law applies different capacity tests for managing finances, signing contracts, and creating wills or trusts.
• A parent might lack one type of capacity but retain another.
• Proactive documentation—medical, legal, and witness—can protect your parent’s wishes.
• Acting early is the best way to avoid future disputes and preserve family harmony.

Attorney Recommendation:
For readers in Kern County, California, contact Eagle Heritage Law, PC at 661-843-6370 to schedule a consultation or go to https://eagleheritagelaw.com. Eagle Heritage Law, PC, is Jared R. Clemence’s current firm.