Mental capacity to make a Will is one of the most important requirements for creating a legally valid estate plan. If a person does not understand the nature and effect of their Will when they sign it, the Will may later be challenged after their death.
Concerns about mental capacity often arise where a person is elderly, experiencing memory loss, has a medical condition affecting decision-making, or is making significant changes to their estate plan later in life.
Family members may question whether a loved one understood their decisions or whether someone influenced them when preparing their Will. These disputes can lead to expensive and stressful estate litigation.
To reduce the risk of a Will challenge, a person should prepare and review their Will and estate plan while they have the mental capacity to clearly understand and communicate their wishes.
What does mental capacity mean when making a Will?
Mental capacity refers to a person’s ability to understand information, make decisions, and appreciate the consequences of those decisions.
When making a Will, the person must understand:
- That they are creating a legal document that controls how their assets are distributed after death;
- The type and value of assets they own;
- The people who may reasonably expect to benefit from their estate; and
- The consequences of including or excluding certain beneficiaries.
A person does not need to have perfect memory or complete knowledge of every detail of their financial affairs. However, they must understand the important decisions they are making at the time they sign the Will.
The legal test for testamentary capacity
The legal test for whether someone has the mental capacity to make a Will comes from the case of Banks v Goodfellow (1870). Australian courts continue to apply these principles when deciding whether a Will-maker had testamentary capacity.
Further information about succession law in New South Wales is available through the Succession Act 2006 (NSW).
Under the Banks v Goodfellow test, a Will-maker must:
- Understand the nature and effect of making a Will;
- Understand the extent of the property they are disposing of;
- Understand the people who may have a claim on their estate; and
- Not suffer from a disorder of the mind that affects their decisions.
The test focuses on the person’s understanding at the time they make the Will. A previous diagnosis, age, or medical condition does not automatically mean a person lacks testamentary capacity.
Can someone with dementia make a Will?
A person with dementia may still have the mental capacity required to make a valid Will.
Dementia affects people differently. Some people experience periods where they can clearly understand their decisions and communicate their wishes.
The important question is whether the person understood their Will when they signed it, rather than whether they had a particular medical diagnosis.
Where dementia or cognitive decline creates uncertainty, a lawyer may recommend obtaining medical evidence to confirm the person’s capacity and reduce the risk of future disputes.
How do lawyers check mental capacity when preparing a Will?
Experienced estate planning lawyers take steps to ensure a Will-maker understands their decisions before preparing and witnessing a Will.
This may involve discussing:
- The person’s assets and financial circumstances;
- Their family relationships;
- The beneficiaries they wish to include or exclude;
- The reasons behind their estate planning decisions; and
- The effect of the Will they are preparing.
If concerns arise, the lawyer may recommend obtaining a medical assessment from a qualified practitioner. Keeping detailed records can provide valuable evidence if someone later challenges the Will.
What happens if a person lacks mental capacity to make a Will?
If a person lacks testamentary capacity, they may not be able to create a valid Will.
An invalid Will can create uncertainty because the person’s estate may not pass according to their wishes. Instead, their assets may be distributed under intestacy laws.
In some circumstances, the Supreme Court of NSW can authorise the making or alteration of a Will on behalf of a person who lacks capacity.
Can a Will be challenged because of lack of mental capacity?
Yes. A person may challenge a Will if they believe the Will-maker lacked the required mental capacity when they signed it.
A challenge may involve evidence such as:
- Medical records and assessments;
- The lawyer’s file notes and instructions;
- Witness statements from people who knew the Will-maker; and
- Evidence about the person’s behaviour and decision-making ability.
The Court will consider all available evidence before deciding whether the Will accurately reflects the deceased person’s intentions.
What are the risks of making a Will when capacity is uncertain?
Preparing a Will when mental capacity is uncertain can increase the likelihood of disputes after death.
A challenge may delay the administration of the estate and create additional legal costs for beneficiaries. Family relationships can also become strained during the dispute process.
Taking steps early, including obtaining professional legal advice and medical evidence where appropriate, can help protect the Will and provide confidence that it reflects the person’s true wishes.
How to reduce the risk of a Will dispute
There are several steps that can help reduce the likelihood of a challenge based on mental capacity:
- Prepare your Will while you are healthy and able to clearly communicate your wishes;
- Review your Will regularly, especially after major life events;
- Seek advice from an experienced wills and estates lawyer;
- Keep records explaining significant estate planning decisions;
- Consider obtaining medical evidence where capacity may later become an issue.
Frequently asked questions about mental capacity and Wills
What is testamentary capacity?
Testamentary capacity is the legal ability to understand the nature and consequences of making a Will. A person must understand their assets, beneficiaries, and the decisions they are making.
Does old age affect a person’s ability to make a Will?
No. Age alone does not prevent someone from making a valid Will. The key issue is whether the person understands their decisions at the time they sign the document.
Can a family member challenge a Will if they think someone lacked capacity?
Yes. An eligible person may challenge a Will if they believe the Will-maker lacked testamentary capacity or did not understand the document they signed.
How can I prove someone had capacity when making a Will?
Evidence may include medical assessments, lawyer file notes, witness evidence, and records showing the person understood their estate planning decisions.
Need Advice About Mental Capacity and Will Disputes?
Ensuring a person has the mental capacity to make a Will helps protect their wishes and reduces the risk of disputes among family members.
If you have concerns about a loved one’s ability to prepare or update a Will, our experienced wills and estate lawyers can provide advice about your options.
Contact us on (02) 9818 2888 or email [email protected].