Estate Planning in Montana with Slipping Capacity: What You Need to Know

As Montana’s population ages, more families are confronting the legal and practical challenges of estate planning for individuals experiencing declining cognitive function—whether from Alzheimer’s, dementia, stroke, or other memory-impairing conditions. In these situations, proactive legal planning becomes not only advisable, but essential.

Capacity and Estate Planning:

The Legal Standard in Montana

In Montana, a person must have legal capacity to create or amend estate planning documents such as wills, trusts, and powers of attorney. The relevant legal threshold is defined by statute and common law.

Under Montana Code Annotated (MCA) § 72-2-521, a person creating a will must be:

1. At least 18 years of age, and

2. “Of sound mind.”

   
   

"Sound mind" does not require perfect memory or cognition, but the testator must understand:

• The nature and extent of their property;

• The natural objects of their bounty (e.g., family members); and

• The nature of the act they are undertaking (i.e., executing a will).

  
  

Similarly, for creating or amending a trust, the settlor must indicate an intention to create a trust and must have the requisite mental capacity. To create a revocable or testamentary trust, the settlor must have the capacity to make a will. To create an irrevocable trust, the settlor must have capacity during their at the point of funding the trust to transfer said property.

For powers of attorney, Montana law—specifically MCA Title 72, Chapter 31, Part 3 (Uniform Power of Attorney Act)—does not impose a rigid capacity test, but the principal must understand the general nature of the powers being delegated.

Anyone who has dealt with individuals with slipping capacity knows that there are good days and bad days. An individual may have capacity one day and not the next. All it requires is a lucid moment and adhering to the above general principals. However, there are some additional risks that are inherit with executing estate plans once capacity starts slipping.

Diminished Capacity and Legal Risk

Estate planning under conditions of slipping capacity introduces serious legal risk:

• Challenges to testamentary documents become more likely;

• Undue influence claims may arise, especially where one individual stands to benefit disproportionately;

• Court intervention, including guardianship or conservatorship proceedings, may become necessary if capacity is lost before proper planning is completed.

  
  

Montana courts apply a functional test to determine capacity, often relying on medical evaluations and witness testimony. Importantly, MCA Title 72, Chapter 5, Part 4 (Protection of Property of Minors and Persons Under Disability governs the appointment of a conservator for a person unable to manage their property due to impaired mental function, while MCA Title 72, Chapter 5, Part 3 (Guardians of Incapacity Persons) addresses guardianship for personal care decisions.

Best Practices for Planning with Slipping Capacity

1. Plan Early: The best time to draft or update estate documents is before capacity becomes questionable. Delaying invites litigation and confusion.

2. Use Durable Instruments: Ensure powers of attorney are durable, meaning they remain effective even after incapacity, per MCA § 72-31-304(2).

3. Involve Medical Providers: When capacity is borderline, obtain a contemporaneous capacity evaluation from a qualified healthcare professional. This can provide critical evidence if the estate plan is later contested.

4. Document the Process: Video recordings, third-party witnesses, and attorney memos detailing the planning meeting can help rebut future challenges.

5. Consider a Revocable Living Trust: A well-drafted trust can minimize probate, avoid guardianship, and ensure management continuity in the event of incapacity.

   
   

Conclusion

Estate planning in the face of mental decline demands urgency, care, and precision. Montana law provides the tools, but it’s up to families and practitioners to act early and decisively. If your loved one is exhibiting signs of memory loss or confusion, do not delay. Engage with our experienced estate planning attorneys here at Measure Law to ensure their wishes are respected—and legally enforceable—before it’s too late.