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What is the difference between testamentary and contractual capacity?

What is the difference between testamentary and contractual capacity? Does my grandmother need both to create a will?

– Beth, Joliet

Testamentary capacity occurs when an individual is of sound mind in that she understands what document is being drafted, the assets owned, and who will be receiving said belongings upon her death. On the opposite side of the spectrum is contractual capacity. Contractual capacity is different than testamentary capacity in that it is a more rigorous standard to meet. For a person to have contractual capacity, she must comprehend the effects of said decision, including the potential consequences involved, as well as the benefits and other alternative possibilities. It is the capacity necessary to enter into a valid contract. Your grandmother needs to meet the standard for testamentary capacity to draft a will. However, if she would like to draft a trust, contractual capacity will be needed.