A person must have the proper mental capacity to make or update a will — this is called “testamentary capacity” and is one of the key elements of a valid will.
The question of testamentary capacity is an important consideration in will-making and can be a contentious issue. How often do we hear family members arguing over a loved one’s ‘state-of-mind’ and how something is ‘what Grandad would have wanted’ when sadly, his memory and ability to make reasonable decisions comes into question?
A person may lose testamentary capacity due to age, injury, deteriorating health, or a combination of these things.
The test of testamentary capacity
The test of testamentary capacity was established almost 150 years ago in 1870, in an English legal case called Banks v Goodfellow. The language used reflects the Victorian era, but the key elements remain relevant:
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.
Translated to a more contemporary understanding, the will-maker must:
- understand the nature and effect of the will;
- understand the extent of his or her property;
- understand the claims which he or she ought to consider; and
- be free of illogical beliefs that are not in sync with his or her level of education and surroundings.
If the will-maker’s capacity cannot be established, then the will cannot be made, or an existing will cannot be updated.
A will-maker who is intermittently unsound may still make a valid will if it can be shown that the will was made at a time of sanity.
What happens if a will-maker lacks testamentary capacity?
Lawyers must ensure that a will-maker’s interests are protected and have an obligation to question a will-maker’s capacity if it is in doubt. The lawyer must obtain instructions directly from the will-maker and be satisfied that he or she understands the legal implications of the documents being prepared and signed.
This is another reason why it’s a bad idea to write your own will.
If a will is made or updated at a time when mental capacity is in dispute, a disgruntled family member may challenge the validity of the will after the will-maker dies.
Accordingly, if the capacity of a will-maker comes into question, the lawyer must take additional steps to confirm the will-maker’s ability to properly understand the nature of the contemplated document.
This often requires obtaining medical or psychiatric reports from specialist medical practitioners. This can be expensive and cause additional stress and anxiety to the will-maker and his or her family. However, the extra time and expense required to obtain these reports while the will-maker is alive is almost certain to be far cheaper than having to try to reconstruct this evidence after the will-maker has passed away.
What happens if there is no will?
If there is no will or if the court finds that a will is invalid because the deceased did not have testamentary capacity (and there is no earlier valid will), then the deceased is said to have “died intestate” and his or her assets will be distributed in accordance with pre-determined rules. In Western Australia, the rules are set out in the Administration Act 1903, which provides for a specific order of distribution to the deceased’s next of kin. Those who receive an inheritance will depend on the individual and family circumstances of the deceased.
The distribution of an intestate estate generally reflects the moral expectations of society, which is often not how the deceased would have chosen to distribute their estate. For instance, there are numerous reasons why a will-maker may have wanted to leave out an expectant beneficiary or indeed include non-family members in the distribution of his or her estate. For a variety of reasons, the deceased may have also wanted to allocate unequal shares to beneficiaries who under the legislation would otherwise share equally.
Points to remember
The problems of intestacy or having an outdated will can be avoided by ensuring a will is made whilst a person is in good health and of sound mind. Some points to remember:
- Mental incapacity can affect anyone and occur progressively (such as with Alzheimer’s Disease) or suddenly (such as an acquired brain injury from a car crash).
- Determining mental capacity when in doubt is not straight-forward and may require specialist medical reports.
- Planning your will now and making the effort to review it regularly will safeguard your estate from the possibility of unintentional distributions.
- Encourage your loved ones to review their will and other estate planning documents when there is a change in personal or financial circumstances and particularly when they are ageing or in deteriorating health.
- Lead by example and make or review your own will and estate plan!
Unless you have a valid and up to date will, it can be difficult (if not impossible) to establish your true intentions after you have passed away or become permanently incapacitated.
Get your estate planning right today to avoid the uncertainty, costs and stress of your loved ones arguing about it when it is too late.
If you or someone you know wants more information or needs help or advice, please contact us.