Testamentary Capacity (ACT)
A fundamental principle of estate law in Australia is that a person has the freedom to decide how their estate is to be dealt with after their death. However, in order for a person’s will to be valid and impervious to challenge, they must have testamentary capacity at the time they execute the will. A testator must understand their testamentary actions, possess a good recollection of the assets they hold, and understand their dependents’ needs. A testator’s capacity may be called into question if they have a disorder or delusion that adversely affects their ability to make rational decisions. This article explains how the court assesses a person’s testamentary capacity and how a will may be challenged on the basis of lack of testamentary capacity.
What is Testamentary Capacity?
Testamentary capacity is a person’s mental and legal ability to make or alter a will. For a will to be valid, the testator must be of sound mind, memory and comprehension so as to be able to legally dispose of their property in a will. It is assumed that testators have the required level of mental acuity to make a will, but this is a rebuttable presumption. A person with standing to do so can adduce evidence to the court that proves that the testator lacked testamentary capacity at the time that they signed the will. The onus is on the person mounting the challenge to convince the Supreme Court that the evidence is sufficient to invalidate the will.
ACT Succession law uses the well-known test set out in the 1870 British decision of Banks v Goodfellow to assess testamentary capacity. In that case, the court found that a will was valid even though the testator suffered from a mental illness because the will benefited a close relative and as such it was rational. This case established that a testator can suffer from a mental disorder and still have testamentary capacity as long as they can satisfy a four-part test:
1. Does the person understand the consequences of making a will?
2. Do they remember (in general terms) the assets contained in their estate?
3. Does the person understand who is entitled to make a claim against the deceased estate?
4. Do they have a condition or disorder that will prevent them from making rational decisions about the disposition of their assets?
Recent case law that deals with testamentary capacity has clarified the limitations of this four-part test. For example, the requirement that a will-maker remembers the particulars of their property may be inconsistent with the realities of their financial management. Some people only have a general idea of what their holdings are because they use an investment or financial company to manage their wealth for them.
It can also be difficult to tell from a person’s will whether they failed to comprehend potential claims on their estate, or if they were aware of these claims but chose to disregard them. A testator has the freedom to leave their assets to whomever they choose and they are not legally obliged to acknowledge anyone in their will. An eligible claimant like a partner or child can contest the estate’s distribution but leaving an eligible claimant out of a will is not sufficient evidence that the testator lacked testamentary capacity.
Family members will often seek legal advice with concerns that a will may not be valid because of a testator’s medical condition. Close relatives are often on hand to see symptoms of mental incapacity in their parents or grandparents, such as disorientation, delusion or forgetfulness.
While it is true that a testator’s testamentary capacity may be adversely affected by a mental disorder or illness, such as psychosis, dementia, a neurological or psychiatric disorder, or personality disorder, he or she does not necessarily lack testamentary capacity. The court will assess capacity based on the type and severity of the illness and its relative impact on the testator’s judgment, insight and decision-making ability. It is up to a challenger to present sufficient evidence to the court to prove that their mental condition precluded them from making a will that was rational and valid.
Challenging A Will
In the ACT, a person who has a legal “interest” in an estate can challenge the testator’s will. Persons who are eligible to challenge or caveat a will in the ACT include beneficiaries of previous wills and those who are entitled to inherit under intestacy legislation such as spouses and children. The first step in challenging a will on the basis of testamentary incapacity is to file a probate caveat with the court.
If the court is convinced that a testator did not have testamentary capacity, it can revoke the will and probate a previous will. If there is no prior will, the deceased estate is subject to the intestate provisions of the Administration and Probate Act 1929.
How To Establish Testamentary Capacity
There are a few ways that a testator can establish that they possess testamentary capacity in an attempt to avoid challenges to their will. It is a good idea for a person to have a full mental assessment on or around the day they execute their will. A medical certificate can be shown to any interested party who has concerns about the will’s validity. If the will is subsequently challenged the executor can submit the medical report as evidence that the deceased had testamentary capacity.
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