Opinion ID: 2346526
Heading Depth: 2
Heading Rank: 1

Heading: The decedent's mental capacity

Text: [¶ 11] Pelletier first asserts the Probate Court failed to delineate and apply the appropriate legal standard for determining whether the decedent possessed sufficient mental capacity to change the beneficiary designation on her annuity policies. He specifically contends that the testamentary capacity standard should apply. We disagree. [¶ 12] In its articulate and well-reasoned decision, the Probate Court accurately stated that [c]hanging the annuity beneficiary requires the same mental capacity as does the execution of the underlying contract. This proposition is a correct statement of the law because an annuity is a contract, Lander v. Hartford Life & Annuity Insurance Co., 251 F.3d 101, 104 (2d Cir.2001), and, therefore, the rules governing the validity and legality of contracts apply to the validity of an annuity policy, see Rishel v. Pacific Mutual Life Insurance Co. of California, 78 F.2d 881, 884 (10th Cir.1935). [¶ 13] Hence, a party to an annuity contract must possess the mental capacity necessary for executing a valid contract  and not that required to execute or amend a will  when changing the beneficiary designation on an annuity policy. [4] See Stockett v. Penn Mut. Life Ins. Co., 82 R.I. 172, 106 A.2d 741, 742-43 (1954) (holding the decedent possessed sufficient capacity to execute an annuity policy even though advanced in age, infirm, illiterate, and generally inexperienced in business matters). [¶ 14] In Maine, section 15 of the RESTATEMENT (SECOND) OF CONTRACTS (1981) provides the standard for evaluating whether a party possesses the requisite mental capacity to contract. Bragdon v. Drew, 658 A.2d 666, 668 (Me. 1995) (holding a grantor's mental incapacity alone is sufficient to rescind a deed). [5] Section 15 specifically provides, in relevant part: (1) A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness or defect (a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or (b) he is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of his condition. [¶ 15] To give context to the foregoing standard, comment b states that mental incompetency may include mental deterioration resulting from old age, or mental illnesses evidenced by such symptoms as delusions, hallucinations, delirium, confusion and depression. RESTATEMENT (SECOND) CONTRACTS § 15 cmt. b. The party asserting incompetency has the burden of proving irrational or unintelligent behavior, and the court may consider almost any conduct, including lay and expert opinions, and evidence of age, bodily infirmity, or disease. Id. at cmt. c. [¶ 16] Having determined that contractual capacity governs the present analysis, we must next address Pelletier's contention that the court improperly found the decedent lacked the mental capacity to amend her annuities. We review a trial court's capacity determination, a question of fact, for clear error. Estate of Siebert, 1999 ME 156, ¶ 6, 739 A.2d 365, 366-67. We will uphold the trial court's finding [i]f there is any competent evidence in the record that supports the decision. Estate of Turf, 435 A.2d 1087, 1089 (Me.1981). [¶ 17] Sufficient evidence exists in the record to support the court's determination that the decedent lacked capacity to contract when she changed the beneficiary designation on her annuities. First, the decedent's former housekeeper, Onida Dubois, testified that the decedent's condition was deteriorating rapidly by May 2000. Dubois recalled incidents when the decedent thought someone was talking to her through the television and when the decedent stated that her dog nursed her to health when she fell ill. Dubois also testified that she often found uncashed checks and unpaid bills in the decedent's house when Dubois returned from extended absences. Second, various relatives testified that the decedent indicated having visions of her dead brother, fearing non-existent Quakers would enter her house in the middle of the night, and believing she was going to marry Jesus. [¶ 18] Finally, Karen Hover, M.D., stated in her deposition testimony that, in her opinion, the decedent suffered from dementia approximately one week before and three weeks after the decedent amended the annuity policies. [6] Doctor Hover's opinion concerning her patient's condition prior to and after amending the policy is competent evidence to show the decedent's mental competency at the time of execution. See Appeal of Martin, 133 Me. 422, 433, 179 A. 655, 661 (1935) (holding a patient's condition some time before, and some time after, making the will is relevant, as tending to show the condition of mind when it was executed). [¶ 19] Pelletier specifically contends that, notwithstanding this testimonial evidence, the court erred because it did not rely on Sivik's testimony, the only witness presenting evidence of the decedent's conduct and capacity on the day she amended the annuity. He also argues the court improperly relied on the testimony of the decedent's former attorney, Michael Griffin, because Griffin's observations were too remote in time from the day that the decedent amended her annuities. [¶ 20] Pelletier's arguments are misguided, however, because evidence of the decedent's behavior for a reasonable period before and after she amended the annuities is admissible to show her capacity on the day in question. See Estate of Record, 534 A.2d 1319, 1321 (Me.1987) (stating that evidence of a testator's behavior before and after the execution of a will is admissible to show his testamentary capacity). Accordingly, the court did not commit clear error in finding the decedent lacked the capacity to change the beneficiary designation on her annuity policies.