The psychiatrist hired to conduct a medical evaluation in the legal dispute involving the $215 million estate of Abigail Kawananakoa has concluded that the Campbell Estate heiress does not have the mental capacity to manage her own financial affairs as a result of a stroke she suffered last year.

However, the special master hired to advise the judge is recommending that Kawananakoa, 92, be declared mentally capable of changing or revoking her trust and also of removing and replacing the trustee.

In a court-sealed report obtained by the Honolulu Star-Advertiser, special master James Kawachika said that in order to perform those functions, the heiress only needs “testamentary capacity,” or the same level of mental acuity required to make a will.

Kawachika said that while Hawaii has yet to adopt a mental-capacity standard for those making out trusts, at least 30 states employ the testamentary capacity standard spelled out in the Uniform Trust Code. Such capacity includes knowing the nature and extent of the estate as well as the beneficiaries.

Kawananakoa demonstrated such capacity in interviews conducted for the investigation, Kawachika said.

A 63-page written evaluation by a Los Angeles psychiatrist was also sealed by the court as an exhibit to the special master’s report, addressing Kawananakoa’s ability to understand her finances, her memory and ability to plan and organize information.

Kawananakoa’s mental capacity is at the heart of the legal battle that started after she suffered a stroke on June 18 of last year. Her then-attorney, James Wright, petitioned the court for control of the estate in a move that was spelled out in a successorship plan previously set up by the heiress in case she became incapacitated.

But Veronica Gail Worth, Kawananakoa’s life partner of more than 20 years and now wife, came forward to challenge the declaration, insisting that Kawananakoa is mentally capable of handling her own affairs. Worth is seeking to return control of the trust to Kawananakoa.

At stake is a $215 million estate — at least half of which is expected to underwrite the Abigail K.K. Kawananakoa Foundation, which was set up by Kawananakoa to become a charity to fund Native Hawaiian causes following her death.

Circuit Judge R. Mark Browning appointed Kawachika, a Honolulu attorney, as special master to evaluate the circumstances surrounding the dispute and to determine whether Kawananakoa is competent to manage her trust. Kawachika hired the psychiatrist to evaluate Kawananakoa’s mental competence.

While the psychiatrist concluded Kawananakoa isn’t able to manage complex financial affairs, the report shows his opinion of her ability to amend or revoke her trust, or to be able to remove and replace the trustee, was more nuanced. In his report, the psychiatrist essentially left it up to the court to determine whether Kawananakoa should be given authority to make those kinds of decisions.

If it’s a relatively easy decision, requiring only testamentary capacity she indeed has the mental capacity, he said. But if it is complex, requiring a greater level of cognition, she does not, he said.

In the opinion of the psychiatrist, Kawananakoa also lacked the sufficient capacity to terminate Wright on July 18, one month after her stroke.

In his recommendation to the judge, Kawachika agreed that Kawananakoa does not have the mental capacity to manage her own financial affairs or serve as the trustee of her trust.

Kawachika, however, disagreed with the psychiatrist on whether she has the capacity to revoke the trust. He said the standard adopted by most states in such instances requires only testamentary capacity.

In a related matter, Kawachika wrote that he was unable to determine whether Kawananakoa was the subject of physical abuse at the hands of Worth, as alleged by Wright.

In his report, Kawachika suggested that Browning explore the possibility of reaching a settlement that would include the voluntary resignation of Wright as successor trustee and the appointment of a trio of co-trustees: Honolulu accountant Warren Duryea, Kawananakoa’s long-time bookkeeper Betty Lou Stroup and Worth.

According to documents filed by Worth’s attorney, Michael Rudy, two hired experts — Patricia Blanchette, a University of Hawaii professor of geriatric medicine, and forensic psychiatrist Martin Blinder — evaluated Kawananakoa and declared her mentally fit.

But Wright has insisted that Kawananakoa isn’t the same woman he represented for nearly two decades. Kawananakoa, a well-known philanthropist and community activist, shows no interest in the various causes she supported over the last two decades and more, he said.

Wright previously said he fears Kawananakoa’s plan to create a charity on behalf of the Native Hawaiian people is at risk, and the court needs to protect it.

Wright, who has discontinued his law practice, declined to comment for this story other than to say he is urging First Hawaiian Bank to take over as trustee. The bank was named by Kawananakoa as Wright’s successor in a 2006 amendment to her trust.