When are delusions enough to invalidate an estate plan?  The California Court of Appeal addressed that issue earlier this month in Eyford v. Nord (2021) ___ Cal.App.5th ___.

The case involves a 90-year-old woman who favored a charity and disinherited the two grandchildren with whom she had been close.  The appellate court found that California Probate Code section 6100.5(a)(2) requires proof of a “mental health disorder” in addition to a delusion that caused the questioned testamentary disposition.  The opinion provides a guidepost for California lawyers who litigate contests arising from alleged delusions.

Kay Pearson Turns Against and Disinherits Her Granddaughters

Catherine “Kay” Pearson was close to her daughter Cathy Kane and Cathy’s two daughters, Shannon Eyford and Erin Johnson.  Cathy got cancer and Shannon provided care until Cathy died in 2014.

Kay told numerous people around this time that she was going to leave her estate to Shannon and Erin.

After Cathy’s passing, Kay and her second husband, Bob Pearson, moved to a senior living community in Napa.  Shannon and Erin visited Kay there.  Bob fell ill and died in October 2015.

Kay called her first husband, John Noyes, Sr., and said she was confused and alone.  She was admitted to the hospital and treated for anemia and a urinary tract infection.

When Kay returned to the retirement community, John and Erin went through Kay’s financial records with Kay’s consent.

The next day, Shannon took Kay to a clinic for cognitive testing.  Kay took a Mini-Mental State Examination that showed she was experiencing mild to moderate impairment.  That evening, Shannon went out alone in Napa to get food and a drink, and Kay got agitated that Shannon was acting like a “floozy” and “no woman should go out in town alone.”

Kay put Shannon and Erin on her bank account so they could help her.  Shannon and Erin obtained a form of will and financial power of attorney from the internet.  Kay signed the will, naming Shannon and Erin as her sole beneficiaries.  She named Shannon and then Erin as her agents under the power of attorney.

Shannon took Kay to an attorney, James Watson, to prepare a trust.  They had an initial meeting.

Conflict developed between Kay and Shannon.  Kay accused Shannon of trying to take away her independence, put her in assisted living, and take her car.  Kay told facility staff that she was afraid of Shannon and that her granddaughters “were interested only in her money.”  Kay accused Erin of being in “cahoots” with Shannon.

Though Kay saw attorney Watson on two additional occasions, Watson did not complete Kay’s estate planning.  Kay expressed concern about Shannon and Erin taking her money.  Watson “was uncomfortable executing documents without a capacity declaration and was concerned about protecting both Kay and his office.”

Kay told her accountant, Joan Sturges, that she wanted her estate to go to “sick babies.”  Kay then met with a new lawyer, Lori Hunt.  Hunt suggest St. Jude as a potential beneficiary and Kay indicated she loved the idea.  Kay explained she was disinheriting her granddaughters because she felt that she and Bob had given them enough over the years, her assets were attributable to Bob, and Bob loved helping sick babies.

On February 24, 2016, Kay signed a trust prepared by Hunt that named St. Jude as her sole remainder beneficiary.  Kay died that December, apparently having had no recent contact with Shannon or Erin.

Shannon and Erin Unsuccessfully Contest Kay’s Trust

Shannon and Erin contested their grandmother’s trust by petition filed in Napa County Superior Court.  They contended that Kay suffered from delusions that caused her to devise her assets in a way that she would not otherwise have done such that the trust instrument was invalid under Probate Code section 6100.5(a)(2).

The trial judge found that Kay was not experiencing delusions when she executed the trust instrument.  The judge found “little evidence” that Kay’s negative thoughts and claims about Shannon and Erin were true, and that most of Kay’s claims were “demonstrably false.”  Contrary to Kay’s assertions, her granddaughters did not steal her money or jewelry, make transactions on her bank accounts, pressure her to name them as beneficiaries, want her dead, or attempt to have her deemed incompetent.  The court found, however, that Kay’s irrational and false beliefs could be based on a reasonable hypothesis.

Since Shannon and Erin failed to carry their burden of proving that Kay was suffering from a delusion, the trial court denied their petition and validated the trust instrument.

Court of Appeal Affirms, But Expresses Sympathy

The appellate court affirmed the ruling, finding that substantial evidence (a deferential standard of review) supported the judgment.  In the opinion, the court offered a detailed description of the evidence, including the testimony of medical experts and other witnesses.

Probate Code section 6100.5(a)(2) states that an individual is not mentally competent to make a will if he or she “suffers from a mental health disorder with symptoms including delusions or hallucinations, which delusions or hallucinations result in the individual’s devising property in a way that, except for the existence of the delusions or hallucinations, the individual would not have done.”

While section 6100.5 on its face applies only to wills, the Court of Appeal applied it to Kay’s trust instrument.  In footnote 6, the court observed that section 6100.5, in Andersen v. Hunt (2011) 196 Cal.App.4th 722, had been applied to trust instruments that in content and complexity resembled a will.  However, the court did not assess or describe the complexity of Kay’s trust instrument, so it is unclear if the instrument was “simple” within the meaning of Andersen.  Instead, the parties apparently agreed that section 6100.5 applied to the trust instrument.

The appellate court then parsed the language of section 6100.5(a)(2) and found that a contestant had to prove that an individual suffer from a “mental health disorder” in addition to proving that delusions or hallucinations caused the challenged testamentary disposition.  The court found substantial evidence that Kay did not have a mental health disorder when she signed her trust instrument, relying on testimony from treating physicians and retained experts, as well as accountant Sturges and attorney Hunt.

It’s interesting that Probate Code sections 810-811, part of California’s Due Process in Competence Determinations Act, de-emphasize a “mere diagnosis” of a mental health disorder, instead requiring proof that a mental function deficit significantly impaired the person’s ability to understand and appreciate the consequences of his or her actions with regard to the type of act or decision in question.

Yet the Eyford court, without referencing sections 810-811, found that section 6100.5(a)(2) requires affirmative evidence of an adverse mental health diagnosis.

The court acknowledged that Shannon and Erin had a “good Samaritan” argument that they had acted to assist Kay, noting that the result here is “likely a very disappointing one” for them, but the appellate court’s role was apply the substantial evidence standard, not reweigh it.

Takeaways

For family members trying to help a struggling elder, the Eyford case is a cautionary tale.  If an elder misconstrues their efforts to assist, as Kay apparently did with respect to her granddaughters, the elder may penalize them through a disinheritance that may be difficult to challenge.

For lawyers, the takeaway is more technical.  Eyford does little to clarify Andersen as to when Probate Code section 6100.5 applies to trust instruments as opposed to the contractual capacity standard under Probate Code section 812.  (See my article in Trusts and Estates Quarterly for more on the nuances of Andersen.)  Yet if section 6100.5 does apply, and the contestant advances a delusion/hallucination theory, Eyford requires the contestant to persuade the court that the elder suffered from a mental health disorder when executing the challenged document.

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