04/11/2021

When making a will, the willmaker must have ‘testamentary capacity’.

The common law knows three types of capacity.

Legal capacity effectively refers to attaining the age of 18 years, though a court may make an exception allowing a minor to execute a will.

Physical capacity refers to the testator’s physical ability to see and to sign the will.

Mental capacity is the ability to understand the transaction into which they’re entering. This means that the test for mental capacity may vary depending on what transaction is being undertaken.

Testamentary capacity is the presence of enough of all three of the above to give the willmaker the capacity to make their will.

In the 1870 case of Banks v Goodfellow the court outlined the test for the mental capacity needed to make a will.  The willmaker must:

1. understand the act itself (ie creating a document that outlines how the testator wants their estate dealt with, and by whom, upon their death);
2. be aware of the value and extent of their estate;
3. be aware of those who might reasonably make a claim to the estate (ie a list of possible beneficiaries, even if that list simply consists of categories of persons rather than specified individuals, eg any children the testator may have); and
4. be able to evaluate the respective strengths of these possible claims.

There are several noteworthy points about mental capacity.

First, mental incapacity need not be permanent. A person may suffer from a temporary mental state that incapacitates them. Such individuals may learn, investigate or receive treatment and in doing so regain their mental capacity.

Second, a person who lacks capacity with regard to one type of transaction does not automatically lose capacity for other types of transaction. A person who lacks the capacity to make a contract, or to manage their own affairs, or to commence legal proceedings may nevertheless have capacity to create a will. As noted above, the tests vary based on the transaction at hand.

Third, mental incapacity is not synonymous with mental illness. A testator does not need to be mentally ill before they lose capacity. Likewise, a person with severe mental illness can, in theory, retain their mental capacity to sign a will so long as they satisfy the four criteria outlined above. A person may suffer from delusions, for example, but so long as those delusions do not affect their understanding of their estate or beneficiaries then they may well have mental capacity.

Fourth, the test for mental capacity is a legal test, not a medical one. No medical professional is required to make an assessment of the testator. Rather, to assess the testator’s mental capacity a legal test must be applied. A medical assessment can be made to inform the ultimate decision, but the medical assessment is simply evidence to support the outcome rather than decisive in and of itself.

Testing a person’s capacity can be a delicate and confronting process. Many take the mere suggestion that they lack capacity as an insult. For the benefit of the testator and beneficiaries, it is recommended that you create and update your will while you still have the necessary ‘testamentary capacity’.

For further information, please contact Townsends Business & Corporate Lawyers on 02 8296 6222 or email info@townsendslaw.com.au.