Legal capacity - Testamentary capacity experts

Introduction

Testamentary capacity - legal capacity

Testamentary capacity is the application of the principle of legal capacity applied to the question of making, amending, or revoking a valid will.

The relevant general principles are set out at the Field of Expertise page “Legal capacity - Introduction and overview” which may be read with this page.

The principles specifically relevant to the related issues of legal capacity to appoint a power of attorney or enduring guardian are set out at the Field of Expertise pages “Legal capacity - power of attorney” and “Legal capacity - appointment of enduring guardian”.

What is testamentary capacity?

In the leading case of Banks v Goodfellow (1870) LR 5 QB 549, Cockburn CJ said (at 565):

“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 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.”

Justice Rich, ACJ, in the High Court in Timbury v Coffee [1941] HCA 22 re-stated it as being:

“The factors of competency are that the party must know what he is about, have sense and knowledge of what he is doing and the effect his dispositions will have, knowledge of what his property was, and who those persons were that then were the objects of his bounty”.

In King v Hudson, Justice Ward analysed the evidence by posing five questions:

1. Was the deceased able to understand the nature of the act of executing and publishing a will and the effect of the instrument?.

2. Was the deceased able to call to mind the property it was in his power to dispose of in that will?

3. Was the deceased able to call to mind the persons who may have claims upon his testamentary bounty?

4. Was the deceased able to weigh the relative claims of those persons?

5. Was the deceased’s mind possessed of a delusion that influenced the disposition of his property which, if his mind had been free of that delusion, would not have been made?

Evidentiary onus

Although there is a presumption of legal capacity: “where the evidence as a whole is sufficient to throw a doubt upon the testator’s competency, then the court must decide against the validity of the will unless it is satisfied affirmatively that he was of sound mind, memory and understanding when he executed it.” Bull v Fulton.

In practice, a testator who dies with dementia or similar issues may have their transactions from age 70 queried at which point the evidentiary onus may reverse.

Given that cognitive slowing affects at least 10% of the population over age 70 rising to 45% of the population over 85 years, the chances of a will be challenged for lack of capacity are now significant.

This means that the onus is on a solicitor preparing a will to collect contemporaneous evidence to establish legal capacity.

Risks to solicitors, trustees and their clients

“The demographic reality of an aging population means that the likelihood of challenges to wills on the ground of testamentary capacity is increasing.” Ryan v Dalton at [101]

The absence of contemporaneous evidence of capacity may mean that the person’s intentions as set out in their will are not given effect.

As there is a duty of care to intended beneficiaries there is a risk of civil action for failing to collect the evidence necessary to sustain the will if challenged. Hill v Van Erp.

Failure to take care in this respect may also give rise to professional sanction for unsatisfactory professional conduct.

At the bottom of this profile are brief details of a number of the experts that Expert Experts represents. Call our office to discuss your requirements and to obtain a recommendation that suits your needs and budget.

Expertise in Action

When should an independent assessment be conducted?

In Ryan v Dalton (31 July 2017) Justice Kunc provided a “postscript” on “questions of capacity” “proposing some basic rules of thumb” as “basic precautions” for solicitors to take to protect their clients, and themselves, particularly in relation to “anyone:

1. over 70;
2. being cared for by someone;
3. who resides in a nursing home or similar facility; or
4. about whom for any other reason the solicitor might have concern about capacity.”

His Honour noted that:

“the effort involved in paying attention to questions of capacity at the time instructions for a will are taken and the will is executed (including, where necessary, obtaining an assessment of the client where it is thought one is called for) pales into insignificance with the expense, delay and anxiety caused by litigation after the testator’s death”.

Actual and constructive notice

Three main scenarios arise:

1. Constructive notice: When there are circumstances giving rise to constructive notice. In Ryan v Dalton these were identified at [107] as: “anyone: (a) over 70; (b) being cared for by someone; (c) who resides in a nursing home or similar facility; or (d) about whom for any other reason the solicitor might have concern about capacity.”

It is anticipated that this will become an accepted minimum standard of constructive notice.

The other situation of constructive notice is a significant change of a will which benefits a person who may be in a position to unduly influence the testator.

2. Actual notice: When a person presents with a diagnosis of dementia or similar, when a family member or other person raises capacity as an issue, or when it appears clear to the person taking instructions that there is or may be reduced capacity.

3. Notice of a likely challenge: When familial or other circumstances including the nature of the transaction make it more likely that a transaction will eventually be challenged. This may include complex family structures, multiple partners and children, strained family relations, or the preferencing of some family members through gifts or as beneficiaries when it is anticipated this will upset other family members. Other circumstances may include large estates and complex trust structures where there is a high perceived potential reward for successfully challenging the transaction.

Qualifying an appropriate expert

The main difficulty in finding a suitable expert to assess legal capacity is in finding an expert who has both the expertise required to assess mental capacity and an understanding of the above principles.

Expert Experts has addressed this by developing products, processes and training programs to enable appropriately qualified experts to understand the legal issues involved so that they may address all of the issues required to conduct these assessments.

We also work with clients to ensure the briefing process adequately instructs the expert about the particular transaction, so that an assessment can be conducted and an admissible expert report produced in accordance with the expert witness code of conduct which addresses all relevant issues.

Different assessment types

The expert selected and assessment conducted will depend upon the condition of the examinee, the complexity and nature of the transactions being entered into, and where the examination takes place.

Sample Reports

For some fields of expertise we have some sample sections of de-identified reports. Please contact our office if you are interested in a sample.

Cost

The overall cost of expert opinion depends on the services required. Some of the key factors that affect the cost of advice include:

• The need for a view or inspection of a location
• The quantity of documentary material to be reviewed
• Whether there are reports of other experts to be reviewed and commented on in detail
• Whether there is a need for conferences with the expert either in person or by telephone/Skype

Relevant Articles To remember, to reflect and to reason - capacity - (2015)

A summary of the law by Therese Catanzariti of counsel of 13 Wentworth Chambers Sydney. A leading junior barrister advising in this field.

Relevant Cases Ryan v Dalton; Estate of Ryan [2017] NSWSC 1007 (31 July 2017)

"Rules of thumb" include testing those over 70, being cared for, in a nursing home, about whom for any other reason the solicitor might have concern about capacity.

Timbury v Coffee [1941] HCA 22

Elements of testamentary capacity.

Bull v Fulton [1942] HCA 13; (1942) 66 CLR 295

Reversal of evidentiary onus to establish legal capacity after some evidence of incapacity is lead.

Gibbons v Wright [1954] HCA 17; (1954) 91 CLR 423

Classic statement of common law position regarding capacity.

Guthrie v Spence [2009] NSWCA 369

No single test of legal capacity. Different thresholds for marriage, powers of attorney, litigation and wills. The issue is the capacity to understand the nature of the transaction when it is explained. (Citing Gibbons v Wright (1954) 91 CLR 423 at 437)

d’Apice v Gutkovich - Estate of Abraham (No. 2) [2010] NSWSC 1333

Capacity to enter one transaction but not another.

Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197

Fluctuating capacity. Lucid intervals. Capacity is a question of fact. Detailed conversation displaying understanding of relevant factors.

King v Hudson [2009] NSWSC 1013 (esp at para 49 - 59)

Restatement of Banks v Goodfellow; Questions on onus.

Legal Services Commission (Qld) v. Ford 2008 LPT 12

Unsatisfactory professional conduct. Failure relating to legal capacity.

In the Matter of the Estate of Jones (Deceased) and in the Matter of the Public Trustee of the Australian Capital Territory [2014] ACTSC 200

ACT: Lack of capacity for subsequent wills

Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159

Solicitor's duty of care to intended beneficiary.

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