Is it real—or did grandma lack of capacity to amend a trust? It’s the painful question asked when a loved ones’ behavior seems to be on the edge of the shadowlands. It’s worse if its sad aftermath obscures a family’s lifetime bond and ends up in a courtroom.

Napa’s Kay Pearson and her first husband, John, had two children, Cathy and John Jr. before they divorced in the 1960s. Cathy had two children, Shannon and Erin. Friends described the three generations as “close and loving.”

That changed in 2014. Cathy died after surgery while in her girls’ care, and a distraught Kay openly blamed them for her daughter’s death. Stung, Shannon and Erin denied her accusation but continued to visit their grandmother anyway. A year later, Kay’s second husband died. She was promptly hospitalized with anemia and  “confusion” attributed to an infection. Between then and her death in December 2016 at age 90, no one diagnosed Kay as having delusions.

When her granddaughters tried to help her adjust to life as a widow, Kay admitted she knew little about her finances. With her consent, they helped with her bank accounts and took no money from her—yet Kay accused them of stealing cash and jewelry. Kay, John Jr., Shannon, and Erin went to Kay’s bank, where Kay added them to her account. Kay also signed a will that made her son and granddaughters her sole beneficiaries.

Then Kay started to claim that her granddaughters wanted her dead. After Erin begged her not to drive for safety reasons, Kay accused her of stealing her car. She called Shannon a “floozy” after she went out to eat one night—because “no woman should go out on the town alone.” She told friends she feared the two might push her over her balcony to get her money.

The relationship deteriorated further. In February 2016, Kay signed new trust documents that provided her estate—some $2 million—would go to St. Jude’s Children’s Research Hospital and disinherited her descendants. After her death, her son and granddaughters petitioned the court to invalidate the trust on the ground that Kay had a mental disorder that caused her to disinherit them.

The trial court heard evidence from doctors that Kay had not suffered from delusions. Despite finding that many of her accusations were false, the trial court dismissed the petition. Shannon, Erin, and John Jr. appealed.

The Court of Appeal affirmed, finding substantial evidence supporting the trial court’s decision that Kay did not have a mental disorder when she executed the trust agreement.  The law requires evidence of Kay’s mental condition “at the time of the making of the [trust],” which the appellants failed to produce.

The court also stated that a person is presumed to be sane: Anyone contending that a trustor lacked testamentary capacity bears a heavy burden of proof. While acknowledging the likelihood of disappointing John Jr., Erin, and Shannon, the court noted that their evidence fell short of the mark.

The court concluded that a delusion is a concept created in a disordered mind without supporting evidence. “Care must be taken to differentiate between mere unreasonable opinions and mental derangements,” the judges wrote.

If you have concerns about the capacity of a loved one, seek the counsel of an experienced estate lawyer.  Eyford v Nord, California, First Appellate District, Div. Three, A157962, March 18, 2021

About the Author:

John O’Grady leads a full-service estate and trust law firm in San Francisco. His practice includes Estate Planning & Administration, Probate and Trust Litigation.