Wills and Estates: 31 October 2022
Author: Jack Conway - Our People
The term 'testamentary capacity' refers to a person's mental ability to make a Will, and it is a key concept when it comes to forming testamentary intent and creating a Will.
The foundational case that establishes the legal test for whether a person has capacity to make a will is the English case of Banks v Goodfellow, in which the Court held that a testator has testamentary capacity where the testator:
The Banks v Goodfellow case concerned Mr John Banks, who made a Will leaving his estate to his niece. Mr Banks suffered from a number of delusions, as he believed that he was frequently visited by devils or evil spirits and that a Mr Featherstone Alexander molested and pursued him (notwithstanding the earlier death of Mr Alexander).
When proceedings were brought questioning Mr Banks' testamentary capacity in light of these delusions, the Court found that his delusions had no impact on the gifts he made in his Will, and, accordingly, that he did not lack testamentary capacity.
Unless the delusions are connected with the dispositions of the Will, the existence of an insane delusion under which the deceased laboured does not automatically preclude a finding of testamentary capacity.
A recent judgment of the NSW Court of Appeal in Carr v Homersham delivers a contemporary analysis of the relevant principles and how they should be applied to determine whether a person had the capacity to make a will. The facts of the case are as follows:
In reaching his judgment, Macfarlan JA surveyed the authorities concerning whether an 'insane delusion' will deprive a testator of testamentary capacity. Examples where such a delusion was established include cases where the delusion was:
Macfarlan JA identified the following principles from the authorities:
In that case, the Court held that while it was possible that Ms Hordern's belief arose out of a misunderstanding or mistake, this of itself does not necessarily indicate that she held any 'delusion' that would have the effect of depriving her of testamentary capacity.
In considering the phrase 'insane delusion', the Court stated that the fourth element of 'insane delusions' of the Banks v Goodfellow test is an explication of the test of capacity rather than an independent test in its own right. The Court cautioned against reading the test expressed in the Banks v Goodfellow case as if it were enshrined in statute. As such, the inclusion of the word 'insane' means that a relevant delusion is just one indicator of a mental deficiency.
Where a person harbours a delusional belief, this will not automatically preclude a finding of testamentary capacity unless the delusions are connected with the dispositions of the Will. For example, if the delusion has no effect on the testator's decisions as to the disposition of their estate, then the mere fact that the testator suffers delusions does not prevent him or her from making a Will. Further, the holding of a factually incorrect or irrational belief does not necessarily mean that the belief rises to the level of a 'delusion' affecting testamentary capacity. As always, much will depend on the circumstances in every individual case.
The common law has long regarded a person's power to freely dispose of one's assets by Will as an important individual right. As such, to displace testamentary freedom on the basis of a lack of a sound disposing mind, memory, and understanding is a grave matter.
A solicitor's duty to take Will instructions still stands even in circumstances in which capacity is in doubt due to the client's mental deficiency. Even if the client's capacity may be in doubt, the solicitor should not prematurely judge the question of capacity as it is ultimately a matter for the Court to determine the testator's testamentary capacity.
If you require specific advice on your case in relation to testamentary capacity, please contact our award-winning team on +61 3 8600 6080 or email us at firstname.lastname@example.org so we can advise you on your options.