Presented by Richard Mayberry to national audience of lawyers by teleconference and webinar, CLE, first presented 2011.

 A. Competency vs. Diminished Capacity

Diminished capacity is not incompetency. A client with diminished capacity may be competent to retain counsel and sign an estate or elder law plan.

 An initial determination is whether a prospective client has sufficient legal capacity to enter into a contract for legal services; then, whether the client has legal capacity to carry out the specific legal transaction(s) under consideration. The Comment to Model Rule 1.14 of the American Bar Association notes that “a client with diminished capacity often has the ability to understand, deliberate upon and reach conclusions about matters affecting the client’s own well-being.” 

Information relating to the representation of a client with diminished capacity is provided by Rule 1.6.  When taking protective action pursuant to paragraph (b), the lawyer is implicitly  authorized under Rule 1.6(a) to reveal information about the client, but only to the extent reasonably necessary to protect the client’s interests.

Not all of Rule 1.14 recommended by the American Bar Association has been adopted by the Virginia State Bar.  The factors addressed in this rule derive from recommendations from a 1993 National Conference on Ethical Issues in Representing Older Clients.      

 Peter Margulies wrote an article where he described six factors; the first three are “functional” and the latter three are “substantive”:

• The client’s ability to articulate reasoning leading to a decision.  The client should be able to state the basis for his or her decision.  The stated reasons for the decision should be consistent with the client’s overall stated goals and objectives.                                                                                        
• Variability of state of mind.  To what extent does the individual’s cognitive functioning fluctuate?                                      
• Ability to appreciate consequences of a decision.                 
• The substantive fairness of the decision. Mr. Margulies maintains that while lawyers normally defer to client decisions, a lawyer nonetheless cannot simply look the other way if an older individual or someone else is being taken advantage of in a blatantly unfair transaction.                
• The consistency of a decision with the known long-term commitments and values      of the client.  The decision normally should reflect the client’s lifelong or long-term perspective.  However, individuals can change their values framework as they age.  The distinction is important and usually the client will recognize his/her change of mind.              
• Irreversibly of the decision.  Mr. Margulies notes that “the law historically has attached importance to protecting parties from irreversible events,” and that “doing something that cannot be adjusted later calls for caution on the part of the attorney.”