While this may seem like a thin line for some, it is far more complex and involved than a simple mid-afternoon nap can change. Being of sound mind does not mean that you a flawless thinker with a color-coded spreadsheet and a solid 10-year plan (of which some could argue that it a certain determination that one is not of sound mind), it simply means that one is capable of understanding both the nature of the transaction and the consequences of signing a contract.

Of course, this assumes adult status (over 18), and in the determination of competency, the burden of proof lies with the contester. In other words, the person contesting the decision needs to be able to produce enough evidence to clearly show a person is incapable of making a decision for themselves or that they are being coerced into doing so.

As licensed Realtors, we need to make that determination on our own. The overused cliché, “if you know, you know,” seems apropos in this case. Although I can’t make that decision if they choose to find another Realtor, I can make that decision for myself. If a signature feels emotionally manipulative or forced, and the client has no recognition of consequences, then personally, I’m out.

To be clear, being exhausted, stressed, grumpy or annoyed does not constitute a lack of capacity. Signing may feel overwhelming even, but it does not undo a valid contract. Even a bit of buyer’s remorse in no way determines an inability to understand the nature of the transaction. The law draws the line at impairment, not bad judgement — otherwise, my second marriage wouldn’t have counted. (In my defense and for the analogue of poor excuses, it was a rebound, I likely was not of sound mind, and it was a practice one for my final).

Honestly, if bad judgement invalidated contracts, a signature would lose all credibility. The law is not asking whether you should sign a contract, just whether you can understand what signing means.

It is important that mental incompetency and mental illness do not get confused. Having a mental illness does not automatically mean someone lacks legal capacity.

Here’s where things often get misunderstood: Having a mental illness does not automatically mean someone lacks legal capacity. Depression, anxiety, bipolar disorder, PTSD, or even paranoid schizophrenia, when symptoms are controlled by medication — none of these flip a magical switch that voids your ability to enter a contract.

Plenty of people with mental health diagnoses buy and sell real estate every day, often while juggling therapy appointments, medication schedules, and the emotional rollercoaster of Zillow browsing at 2 a.m. The key question is not diagnosis, but capacity at the time of signing.

The law is refreshingly specific here: Were you able to understand what you were doing at that moment? If yes, congratulations, you’re legally competent, even if you cried in your car afterward.

Now when we are talking about cognitive or memory impairment such as dementia or Alzheimer’s disease, this is different. Not because these are stigmatized, but because these types of diseases can directly affect a person’s ability to understand reality, memory, and decision-making. My own mom suffered from this very thing for years before passing. At one point she did not even remember where she lived let alone comprehend anything she could sign. Toward the end, she couldn’t even write her own name or even remember it.

This is why estate planning, guardianship, and power of attorney are so important. These are not just legal buzzkills. They are safety nets, designed to protect people from signing away their deed to a home when they thought they were signing a petition to exclude box elder bugs from residing in Utah.

The “sound mind” requirement isn’t there to be cruel or exclusionary. It exists to protect people from being taken advantage of during moments when they truly can’t protect themselves. It also protects the integrity of contracts, because real estate would be chaos if deals could be undone every time someone didn’t feel, in hindsight, that they were emotionally aligned with their choice. So yes, the standard is serious, however, it is also practical, humane and surprisingly forgiving.

Jen Fischer is an associate broker and Realtor. She can be reached at 801-645-2134 or jen@jen-fischer.com.