What is testamentary capacity? A basic guide
As a lawyer specialising in wills and estates, I find myself increasingly providing advice (and often launching legal proceedings) on the basis that a deceased will maker lacked the testamentary capacity to make his or her will.
The recent case Ryan v Dalton; Estate of Ryan  NSWSC 1007 is a case in point. In this case, a testator’s final will was challenged. The court held this final will to be invalid due to lack of testamentary capacity. Probate was granted to a will made two years earlier instead. (For the background facts to this case, please see my earlier article Did the old man have the mental capacity to change his will? Which case won?)
Testator gives no reason for changing his will
In considering whether the testator, Mr Frank Ryan, had testamentary capacity at the point when he made his final will, the court examined a number of factors.
One significant factor was that Mr Ryan had always told his spouse and children that his finances were separate from hers and that he would leave his estate to his children.
There was no explanation from Mr Ryan as to why he was changing his will from the previous instructions, when it was previously accepted by all parties that he and his de facto partner had agreed to keep their finances separate.
Delusions, confusion and higher order executive functions
The nursing home’s notes indicated that Mr Ryan’s condition deteriorated after 2011 and that he suffered from occasional delusions and confusion. For example, he told his de facto partner that the nursing home staff had made him sleep in a paddock and that he sometimes had to beg them for food. (Keep in mind that such information would not have been apparent to the lawyer preparing the will and would have required some real investigation.)
Expert evidence after Mr Ryan’s death suggested that while he could understand his affairs, have lucid intervals and appear to be aware, he was suffering from vascular dementia which affected his higher order executive functions.
The court also noted that the legal concept of a “lucid interval” is open to doubt from a medical perspective. Functions such as attention and alertness are thought to improve during such intervals, but not necessarily memory or higher order executive functions, which are essential for testamentary capacity.
NSW Law Society guidelines for testamentary capacity
An important factor in the court’s decision was that the solicitor preparing Mr Ryan’s will was not aware of the NSW Law Society guidelines relating to testamentary capacity: When a Client’s Mental Capacity is in Doubt: A Practical Guide for Solicitors. Consequently, she failed to take the recommended precautionary measures when preparing Mr Ryan’s 2013 will.
When getting Mr Ryan to sign the will, the solicitor read out the draft to him but did not seek confirmation of his instructions by asking non-leading questions (for example, “Remind me Frank, what did you want to do in your will?” “Can you remind me what assets you have?” “Remind me, how many children do you have?”)
Reading a will out aloud and relying upon implied agreement, expressed by the client nodding his head, is not enough to demonstrate agreement or awareness.
Another significant factor considered by the court was that the solicitor preparing Mr Ryan’s will was not aware that he had dementia. She never asked questions of Mr Ryan, or of nursing home staff, that would have clarified this. Part of the reason for this was that Frank appeared to be lucid and without any suggestion of lacking capacity (the solicitor’s file notes were very detailed as to conversations had with Frank).
Wills drafted when testamentary capacity may be in doubt
If there is any question about a client’s ability to make a will, a lawyer must address the question of testamentary capacity, which will not always be obvious. For lawyers and their clients, this creates the potential problem of a blowout in costs.
Conducting investigations with medical personnel and seeking opinions about mental capacity involves additional work for the lawyer and can take a substantial amount of time. A client is unlikely to be delighted with a solicitor charging far more than expected to make a will, particularly when capacity seems to be existent (especially for the client).
However, if, after the testator’s death, a will is challenged in NSW on the basis of testamentary capacity, the court will want to know whether the solicitor identified the factors in the NSW Law Society guidelines referred to above when taking instructions from the client to make the will. This is certainly the case if the client was a resident in a nursing home at the time the will was made.
Banks v Goodfellow test of testamentary capacity
The test for testamentary capacity was set out in the 1870 English case Banks v Goodfellow, where the judge said:
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 the 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. [Emphasis added.]
In other words, the person making the will has to understand:
- What it means to be making a will
- What assets he or she possesses and is leaving to others, including real estate, money held in bank accounts, any other investments and any refundable accommodation deposit paid to a nursing home
- Who the people are who could make a claim on the estate and what moral obligation is owed to those people
Finally – and this was the hurdle that could not be cleared in Ryan v Dalton – in order to have testamentary capacity, the will maker cannot be affected by a mental disorder influencing the disposal of his or her assets. The evidence of Mr Ryan’s dementia and his solicitor’s failure to take the recommended steps to dispel such doubts meant that he failed this test.