Testamentary capacity

2.47   In order for a will to be valid, the will-maker must have had testamentary capacity at the time it was made.⁵² Wills made by older and vulnerable will-makers are often challenged on the basis of a lack of testamentary capacity, even if it is suspected that the will-maker was acting under undue influence, because lack of testamentary capacity is easier to prove.⁵³

2.48   The test for testamentary capacity is a common law test, classically stated in the 1870 United Kingdom case of Banks v Goodfellow.⁵⁴ A person must be of sound mind, memory and understanding to make a will. However, a will-maker is assumed to have been of sound mind unless evidence presented to the court calls into question the issue of whether they had testamentary capacity—in which case it is up to the propounder of the will (usually the executor) to prove that they did.⁵⁵

2.49   According to Banks v Goodfellow, in order to have the requisite soundness of mind the person must:

1. understand the nature and effect of a will

2. understand the nature and extent of their property

3. comprehend and appreciate the claims to which they ought to give effect

4. be suffering from no disorder of the mind or insane delusion that would result in an unwanted disposition.⁵⁶

2.50   This is considered a relatively low threshold test, reflecting the policy that a person’s right to make a will should be upheld whenever it is possible to do so.⁵⁷ For example, in addition to the four-part test, the common law has acknowledged that there may be a ‘lucid interval’ where a person suffering from a mental illness may have will-making capacity.⁵⁸

2.51    When the test has been applied in more recent cases, account has been taken of new knowledge of medical and psychological matters and changing circumstances in society.⁵⁹ For example, Justice Windeyer of the New South Wales Supreme Court has observed that many people have now handed over the management of their share portfolios and real estate to advisers and may not have a proper understanding of the value of the assets that generate their income. This should not be a bar to a finding of capacity on the basis that they do not meet part two of the test, which requires them to understand the nature and extent of their property.⁶⁰

2.52    Part three of the test, that the person should comprehend and appreciate the claims that others may have, adds a moral element to the test by looking for awareness of who has a reasonable claim on their estate.⁶¹ However, ‘the freedom of testamentary disposition includes a freedom to be unfair, unwise or harsh with one’s own property’.⁶² The mere existence of a will that fails to meet the will-maker’s moral obligations does not necessarily indicate a lack of capacity.

2.53    In addition, modern understandings of ‘disorders of the mind’ or ‘insane delusions’, mentioned in part four of the test, are more nuanced. If a person suffers from dementia, this does not necessarily preclude will-making capacity. The existence or otherwise of capacity depends on the severity of the illness and whether it impairs insight, judgement and decision-making skills; that is to say, whether it impacts on the first three parts of the test.⁶³

2.54    A measure to prevent challenges to a will is to have a specialist or general medical practitioner assess the person’s will-making capacity. When this occurs, the medical practitioner is usually provided with the Banks v Goodfellow four-part test on which to base their assessment.⁶⁴

2.55    While both testamentary capacity and undue influence are legal concepts, medical assessment and opinion are important to determining whether a will-maker was of sound mind, memory and understanding and exercised a free will at the time the will came into existence. It is therefore important for legal practitioners, medical practitioners and psychiatrists to work together when developing assessments and strategies to ensure that will-making is accompanied by a sound mind and free will. To this end, interdisciplinary education should be encouraged.⁶⁵