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The issue of testamentary capacity when making your Will

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Attwood Marshall Lawyers Legal Practice Director Jeff Garrett speaks to Robyn Hyland on Law Talks on Radio 4CRB about capacity in the context of making a Will.

Introduction

Making a Will is a very specific issue in relation to mental capacity.  Quite often people think making a Will is as simple as saying “I want to leave everything to my wife and then if something happens to my wife, my estate should go equally to the children”, and not much else needs to be considered. In the general scheme of things that’s what many families choose to do when writing their Will. However, when you have someone who is affected by some form of medical condition, brain injury or disease that is affecting their mental capacity, it gets a little more complex from a legal perspective. 

Generally, when you’re doing a Will there are four basic ingredients:

  • The Will-maker needs to know the general outline of the terms and conditions of the Will they are making.
  • They need to understand what assets they own and how they are owned, in a broad sense.
  • They need to have due regard to their family circumstances and any claims that may be made on the estate. Which means they need to understand who they may be morally obliged to provide adequate financial provision for.
  • Finally, they must not suffer from any mental condition or delusions that will prevent them from applying the above factors.


What is testamentary capacity?

Testamentary capacity is the ability to be able to understand and make decisions for your own affairs in the context of providing instructions for the making of and signing your Will. When you see a lawyer to provide instructions for a Will, on most occasions the two actions are done separately and sometimes you need to prove the person making the Will has the requisite capacity at both of those times.

The four ingredients mentioned above are the prerequisites for a person being in a satisfactory condition or in a state to be able to give instructions for the making of and signing a Will. 

One of the most common reasons today that testamentary capacity comes into question, which applies to elderly people mostly, is the onset of dementia or some form of Alzheimer’s disease. These diseases can take a lot of different forms which can impact on someone’s ability to give instructions to a lawyer. Dementia is a condition that occurs when the brain no longer functions properly. It may cause problems with memory, thinking and behaviour. In early stages, the symptoms may be minimal or mild, but as the disease progresses it causes more damage to the brain and symptoms worsen. The rate at which the disease progresses is different for everyone. Equally, the degree of cognitive impairment can fluctuate on an hourly or daily basis, depending on the individual circumstances of each person.

In 2021, there are an estimated 472,000 Australians living with dementia. That number is expected to increase to almost 1.1 million by 2058.

In the early onset of these conditions, although someone may not have 100% capacity or may have some memory issues or other concerns, that person may still be able to handle their affairs and make certain decisions, which means they may still have testamentary capacity to prepare and sign a valid Will. The only way to know this is for a lawyer is to sit down with the person and have the conversations required to ensure the Will-maker understands the extent of their estate, their family dynamics, and the effect of the instructions they are giving to prepare the Will.

There is a common misconception that as soon as someone is diagnosed with a condition such as early onset of Dementia that they automatically cannot write or update their Will. That is not true. Early stages of these diseases are usually fine to still manage these types of affairs. Some people have different times of the day where they may be completely lucid, and they can communicate with you perfectly. An experienced lawyer will understand the steps to take to ensure the person they are working with understands what they are doing and has the required capacity to execute the task. The lawyer may need to get a full history of the client and understand their condition so that they can manage any fluctuation in their mental capacity and ensure they are working with the client when it is the best time to do so.

It may be that the lawyer will refer to a geriatrician or other medical professional to confirm that the client has capacity both at the time they provide instructions for the Will and at the time they are executing their Will, in order to ensure that they have the best evidence to support the validity of  the Will down the track. It is a very important point to add that it is not up to the lawyer to make the decision about whether someone has the required testamentary capacity to provide instructions for a Will. This is the function of the Court. The lawyer is duty bound to give effect to the client’s instructions and prepare the Will. Many lawyers inexperienced in this area of law are unaware of this obligation.

Testing testamentary capacity

There is a famous House of Lords decision from England dating back to 1870 called Banks v Goodfellow. This case set the parameters around what a lawyer needs to do when taking instructions from a client and what the court looks at to determine whether the Will-maker did have the testamentary capacity required to make their Will.

In this case Judge Cockburn CJ stated:
“It is essential to the exercise of such a power that a testator shall understand the nature of the act and its effects; shall understand the extent of property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, pervert his sense of right, or prevent the exercise of his natural faculties – that no insane delusion shall influence his will in disposing of his property and bring about a disposal of it which if the mind had been sound, would not have been made.”

Basically, this case outlines that a Will-maker must understand what it means to make a Will, must understand what assets he or she possesses and is leaving to others; must understand who the people are who could make a claim on the estate and what moral obligation is owed to those people. And finally, the testator must not be affected by a mental disorder or delusions influencing the decisions they make about the disposal of their assets.

Sometimes it is a difficult exercise to determine whether someone has the requisite testamentary capacity to provide instructions for a Will when they are suffering from dementia or some other injury caused condition or illness (e.g., a head injury or stroke). In the 19th century English House of Lords case of Boyse v Rossborough (1857) 6 HL Cas 1 at 45 (which was quoted and adopted in Banks v Goodfellow), Lord Cranworth, who was also the Lord Chancellor, observed the difficulty in relation to this test:

“There is no possibility of mistaking midnight for noon; but at what precise moment twilight becomes darkness is hard to determine.”

This is such a great analogy because it’s very similar when considering the onset of dementia. It can be a very difficult thing to understand when that darkness point begins. When does the light switch off, and someone no longer has complete capacity or is no longer completely lucid? Sometimes this is a very difficult question to answer for a lawyer, or for their treating doctors 

Who can challenge the validity of a Will?

To be able to challenge a Will based on lack of mental capacity, you must have standing or be a person that falls within a certain category. Eligible people who can challenge a Will include:

  • Anyone named in a previous Will, including beneficiaries or the Executor;
  • In the absence of a Will, a beneficiary in accordance with the rules of intestacy. This can include a family member, spouse or ex-spouse, or grandchild of the deceased.


If someone is concerned about the validity of a Will, when should they act and challenge it?

If someone is still alive and they have written a Will that you believe does not truly reflect their testamentary intentions and they no longer have the legal capacity to change their Will, in certain circumstances you can intervene prior to them passing away and apply for a Statutory Will.

Statutory Wills are usually only applied for in rare cases where someone has a large estate or if there has been a significant event that caused a breakdown in a relationship such as a family member trying to murder or abuse their mother or father, and the mother or father has since lost mental capacity and other family members know that they would not want their Will to still include that person as a beneficiary.

In rare circumstances such as this, the court can intervene and make a Statutory Will that they believe reflects the intentions of that person if they had capacity.

In general, after someone passes way, if you believe that person’s Will is invalid, it is important to engage an experienced estate litigation lawyer at the earliest opportunity to effectively contest the validity of the Will based on lack of capacity.

Each state and territory in Australia have their own time limitations that apply when contesting and challenging a Will. For this reason, it is important to seek immediate advice to ensure you take the appropriate steps and meet the time limitations.

What happens if someone’s Will is challenged and found to be invalid?

If someone’s Will is found to be invalid, it will be set aside. 

The court will generally refer to a Will that was made prior to the Will deemed invalid, provided that the Will-maker had capacity when they made the previous Will. If that is not an option either because the previous Will was also done within the same timeframe the Will-maker lacked testamentary capacity, then the court would refer to an earlier Will before that, if one existed.

Failing to refer to a previous Will that is considered valid, then the estate would be distributed under the rules of intestacy. The law in each state varies depending on who inherits what under the rules of intestacy and a set formula will determine how the assets of the estate are distributed. It is important to note that this will not take into consideration the deceased’s specific family circumstances.

Are you concerned about someone challenging your Will based on lack of testamentary capacity?

It is important to execute documents like a Will and Enduring Power Attorney when you have the capacity to do so. Everyone should have a Will and Enduring Power of Attorney, no matter their age, financial circumstances, or health status.

To ensure your Will is a valid legal document and can be upheld after you are gone, it is best to go see a lawyer who knows what they are doing in this area and practices exclusively in estate planning.  An experienced lawyer can ensure all the appropriate checks are in place and use appropriate strategies to mitigate any risk of the Will being challenged in the future.

Mental capacity is a topic that most people don’t like to think about, however it is important to understand what can happen if your testamentary capacity is impacted and you lose the ability to execute these important legal documents. You can put safeguards in place today to protect your estate and preserve your wishes.  

Attwood Marshall Lawyers – helping you achieve your estate planning goals

With one of the largest and most experienced Wills and Estates departments in Australia, our estate planning lawyers will help you plan for the future and preserve your testamentary wishes. We take a holistic approach to estate planning to ensure that your plan aligns with your specific family circumstances, the types of assets you hold, and how you wish to distribute your assets after you pass away.

Our lawyers have the training and skills required to test for testamentary capacity and follow the steps required to ensure any documents that are being executed will be legally valid.

Whether you need assistance with setting up family trusts, drafting a Will, completing an Enduring Power of Attorney, or making a binding death benefit nomination, we can discuss your needs and ensure you have all the legal affairs in order.

To discuss our estate planning services or book an appointment, contact our Wills and Estates Department Manager, Donna Tolley, on direct line 07 5506 8241, email dtolley@attwoodmarshall.com.au or free call 1800 621 071 at any time.

You can visit our estate planning lawyers at any of our conveniently located offices at Robina Town CentreCoolangattaKingscliffBrisbaneSydney or Melbourne.

Read more:

Undue influence and unconscionable conduct in Will-making is elder abuse and is a serious issue

Court-approved Statutory Wills for minors and those who lack capacity

Mental capacity issues in day to day living and what can happen if you don’t have an Enduring Power of Attorney

 
 
 
 

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