Testamentary capacity relates to whether a person was mentally capable of making a will. Where there is any question as to a deceased person’s testamentary capacity at the time of drawing up their will, there is the possibility that someone can contest the will. The legal term for someone making a will is ‘testator’.
Indicators A Testator Lacks Testamentary CapacityWhen a will is challenged on the grounds of testamentary capacity, the court looks at several factors to determine the truth of the matter. Where someone has always communicated their intentions with their loved ones regarding their last will and testament, it is likely that they would not alter that will without disclosiing and explaining that fact. Factors the court considers when determining testamentary capacity include:
- Whether there was a reason for a will change;
- Any mental dsorder, including confusion, delusions, vascular dementia, the testator may have had;
NSW Law Society GuidelinesThere are guidelines set out by the NSW Law Society which inform solicitors around testamentary capacity. These guidelines help solicitors to recognize whether their client has the mental acumen to successfully make a will. There are precautionary measures that can be put in place to ensure that the will is valid. One such measure is reading the will out loud and asking open questions of the client. These questions may include reminding the solicitor of their assets, the number of children they have and what they want to do in their will. Awareness or agreement cannot be successfully demonstrated by a nod of the client’s head.
Testamentary Capacity Is In DoubtIt isn’t always obvious whether a client has the capacity to make a will, so lawyers must investigate the matter by speaking to interested parties, including medical personnel. These investigations involve extra work for the lawyer, often taking more time and substantially increasing the costs. The solicitor is obliged to investigate, though, because in the event that the will is challenged after the testator dies, the court will want to confrm that their legal representative worked through the NSW Law Society guidelines to identify the factors contained within those guidelines. This investigation is particularly important if the testator was a nursing home resident.
The Test For Testamentary CapacityBack in 1870, an English case birthed the test for testamentary capacity. The case was Banks v Goodfellow. In that case, the judge said that a person making a will had to understand:
- What it meant to make a will;
- What assets they possessed to leave to beneficiararies, including funds in their bank accounts, investments, real estate, etc; and
- Who they might have a moral obligation to provide for after they died and who could possibly make a claim against their estate.
Case StudiesPersonal feelings don’t always matter when it comes to making a will. If a judge finds that someone who has been left out of a will shouldn’t have been, they can apportion funds according to need instead of the wishes of the deceased, particularly if they are vengeful. The NSW Supreme Court has rewritten wills when they deemed that provision was required for people who were excluded from the will made by the deceased. Example cases include: Charnock v Handley – two daughters were excluded from their father’s will. He named a friend beneficiary of his money. Associate Justice Philip Hallen changed the will to make provision for the daughters from the small estate. They each received just under $10,000. Hallen also ordered the estate to pay their costs. The change was made because Hallen found the statement the deceased wrote one day prior to his death to be inaccurate. Bourke v Keep – The deceased split her estate equally between two of her three children. In her will, she stated that her third child had demonstrated a “complete lack of concern or contact with me and other members of the family over a long period of time”. The excluded child had a disabled child to care for and Associate Justice Richard Macready determined that she was entitled to $200,000. The will change meant that the share for the other siblings was reduced by $140,000 each and the allocation to the lawyers was increased from nil to $80,000. The estate took care of the costs for the losing defendants. Franks v Franks – The court overturned disregarded the deceased’s claims one of her sons had harmed and abused her in explanation as to why she had left the majority of her estate to her other son. The son received a life interest in a Port Macquarie property, valued at circa $400,000 that was left to the husband she was separated from. The rest of her estate was shared equally between the two sons. The reason for the change hinged on evidence that the deceased may have been irrational if not psychotic at the time her claims were made. Geoghegan v Szelid – The deceased left her small estate to her two children, but her former husband contested the will over a unit in Darlinghurst valued at around $300,000 and cash deposits of about $340. Once the costs and funeral and sale expenses were taken into account, the remainder of the estate was valued at around $200,000. While the former husband was able to demonstrate his entitlement to $30,000, the costs and what was owed to lawyers totaled around $115,000.
Judicial TasksThe courts don’t only have to deal with contested wills. They also need to determine which will is valid when there are multiple wills. Complicated family branches that include brothers, sisters, half-brothers and half-sisters, etc, make determining which nieces and nephews should be included difficult.
Court PowersOn March 1, 2008, the Succession Act 2006 was passed n New South Wales making it possible for the Supreme Court to make, revoke or modify a will for people who no longer have the testamentary capacity to do it themselves. S Prior to 1 March 2008 the Supreme Court of NSW had no power to authorise a will to be made for a person lacking testamentary capacity. Problems arising from this situation included:
- A person who had made a will and then lost testamentary capacity was unable to update or change their will as their circumstances changed throughout the balance of their life;
- A person who lost testamentary capacity before ever executing a will would die intestate and their estate would be distributed in accordance with the intestacy provisions.
- The subject person is incapable of making a will;
- The proposed will, alteration or revocation is, or is reasonably likely to be, one that would have been made by the person if he or she had testamentary capacity;
- It is or may be appropriate for the order to be made;
- The applicant is an appropriate person to make the application; and
- Adequate steps have been taken to provide notice to allow representation of all persons with a legitimate interest in the application.
- A written statement of the general nature of the application and the reasons for making it.
- Evidence of the lack of testamentary capacity of the subject person.
- An estimate of the size and character of the estate of the subject person.
- A draft of the proposed will, alteration or revocation that is sought by the applicant.
- Any evidence of the wishes of the person for whom the application has been issued.
- Any evidence of the likelihood of the subject person acquiring or regaining testamentary capacity.
- Any evidence of the terms of any previous wills made by the subject person.
- Any evidence of any persons who might be entitled to claim on the intestacy of the subject person.
- Any evidence of the likelihood of an application for a family provision order being made in respect of the property of the subject person.
- Any evidence available to the applicant or that can be discovered with reasonable diligence of the circumstances of any person for whom provision might reasonably be expected to be made by will by the subject person.
- Any evidence of a gift for a charitable or other purpose that the person might reasonably be expected to make by will.
- Any other relevant facts.