Two primary types of capacity include Testamentary Capacity and Contractual Capacity. Each differs in a unique way.

Testamentary Capacity
Testamentary capacity refers to the ability of a person to make a valid will. Most states have both an age requirement (usually 18 years old) and a mental capacity requirement.

To have mental capacity, the testator must have the ability to know:

1. the nature/extent of property
2. the natural objects of her property
3. the disposition that her will is making
4. the ability to connect all of these elements together to form a coherent plan

Contractual Capacity
When an individual is mentally disabled or otherwise lacks mental capacity, a contract will be treated as voidable because of the lack of contractual capacity. There are two tests utilized by states to determine if one lacks mental capacity: the cognitive test and the affective test.

1. Cognitive Test: Under the cognitive test, a contract will be treated as void if the mentally disabled person fails to understand the meaning of the words in the contract. If so, the contract must be invalid.
2. Affective Test: Alternatively, under the affective test, if one of the parties cannot act in a reasonable fashion, and the other party is aware of this fact, the contract will be void.

In a majority of states in the U.S., individuals under the age of 18 years are typically considered to be minors. Minors are automatically deemed as lacking the capacity to enter into most contracts. There are some limited exceptions to this general rule.

If you have any questions about types of capacity or other factors pertaining to estate law, then we can help.