Testamentary Capacity

Someone who makes a will must have the necessary testamentary capacity. If there are doubts about a testator’s testamentary capacity, a challenge can be raised against the will. If the court finds grounds to invalidate a will, they will disregard the wishes contained in the will. The deceased estate will then be administrated according to a previous will or according to intestate succession legislation. Only certain people have the standing to challenge a will and can do so only if they can clearly substantiate the claim of testamentary incapacity. This article defines testamentary capacity and outlines the grounds in Australia for challenging a will based on testamentary incapacity.

What Is Testamentary Capacity?

Testamentary capacity is a measure of the mental acuity of a testator at the time that they wrote their will. A will is only valid if a testator is of sound mind, understanding and memory. A testator is automatically assumed to have testamentary capacity unless and until evidence is presented to the court to substantiate a claim of incapacity.

For over a century, the legal test for testamentary capacity has been based on English case law, specifically the case of Banks v Goodfellow (1870). The deceased, Banks, had a long history of mental illness and had previously been committed to an asylum. When he died he left his estate to his niece, a minor who died several years after Banks without leaving a will herself. Her estate was therefore inherited by her next of kin, her half brother who was no relation to Banks. The son of Banks’ half brother challenged the will based on the fact that Banks lacked the necessary testamentary capacity to make a will. The court found that though the testator suffered from a mental illness, the will itself was rational as it benefited the testator’s closest relative and was therefore valid, based on a four-part test. This early test of capacity has been reaffirmed numerous times since 1870, including in NSW Trustee & Guardian v Budniak [2015]. In order for a testator to satisfy a test of testamentary capacity, they must:

• Understand the nature of a will and the effect that it will have on their deceased estate;
• Know in general terms the nature and breadth of the assets of their estate;
• Comprehend who has a reasonable claim upon the estate and who should inherit; and
• Not suffer from a medical or mental condition that stops them from making rational decisions.

Conditions That Impact Testamentary Capacity

A testator’s testamentary capacity may be challenged if they suffer from certain medical conditions that impact the mental faculties, such as psychosis, dementia, alcohol-related mental illness, psychiatric or neurological disorders, and personality disorders. It is important to note that someone who suffers from one of these conditions is not automatically deemed to lack testamentary capacity. Instead, testamentary capacity is measured according to the severity of the illness and the degree to which the testator’s judgment, insight, and decision-making ability is affected. The court will only deem a will to be invalid on the basis of testamentary incapacity if they are presented with compelling medical testimony and other evidence to suggest that a testator lacked the necessary cognitive ability to make a will.

Challenging A Will On The Basis Of Testamentary Incapacity

Circumstances that may give rise to a challenge include when a will is made just prior to death, or when a testator was:

• Very ill when they signed the will;
• Under institutional or medical care when they created the will;
• Away from their family or friends when they created the will.

The list of people who can challenge a will on the basis that a testator lacked testamentary capacity differs across jurisdictions in Australia. Generally, those with standing to challenge include the spouse and children of the deceased and registered caring partners and dependents.

Safeguarding An Estate Against A Testamentary Capacity Challenge

The only way that a testator can guard against a challenge to their will on the basis of testamentary incapacity is to establish proof of their mental acuity at the time that they made the will. One approach is for the testator to have a medical professional make an examination to assess their capacity at the time that they make their will, and for this assessment to be kept with the original of the will.

Case Study

In the 2016 Queensland Supreme Court case of Re Oliver (deceased), the testator was suffering from schizophrenia and the will was declared invalid on the basis of testamentary incapacity.

In this case, the deceased’s brother challenged a will prepared by the Public Trustee of Queensland. The deceased suffered from chronic schizophrenia his entire adulthood and had been hospitalised from the age of nineteen until he passed away at the age of sixty-one. The Public Trustee had managed his financial affairs for several decades, and upon his death they applied for a Grant of Probate to administrate the deceased estate. The deceased’s brother sought to have the will declared invalid on the basis of the testator’s mental disorder and applied to be appointed administrator of the intestate estate in place of the Public Trustee. The court appointed the Public Trustee as administrator, due to concerns over the brother’s impartiality.

The deceased died without spouse or issue, and his will left his estate to one of his four siblings, his sister. The Public Trustee claimed that the testator’s will was rational as he had left his estate to a close relative and there was therefore a presumption of validity. The claimant presented evidence contrary to this presumption and the court was convinced upon hearing the claimant’s argument.

The court found that the will failed the Banks test because:

• There were no explanatory notes justifying the decision to make the sister the sole beneficiary, or displaying awareness that the testator had other siblings who might have a legal entitlement to the estate; and
• While a doctor made an examination of the testator at the time the will was written, the court found that the medical form was not particularly illuminating as to the testator’s capacity and showed no history of the doctor’s treatment of the deceased.

If you have reason to believe that a close friend or family member lacked testamentary capacity when they made their will, the contested wills team at Armstrong Legal can advise you on your options. Please call 1300 038 223 to discuss the particulars of your case or make an appointment to chat with our experienced solicitors.