News

Making a Will: Testamentary Capacity

Is it time for you to make your Will?  Do you understand what it means to have testamentary capacity?

What is testamentary capacity?

To have testamentary capacity, a person must be of sound mind, memory and understanding.[1] This is an area of law which has been clear, for a long time.

In fact, in the late 1800s, the case of Banks v Goodfellow (1870) LR 5 QB 549, set out four particular factors which determine testamentary capacity.  These four factors are still relevant and applied by the courts today.

Firstly, the person making the Will must understand the nature of the act of making the Will and its effects. This means that a person must be able to know at the time of making their Will what this means and what any effects may be of a Will being drafted in such a manner. For instance, they must understand the consequences of leaving specific gifts in equal shares as tenants in common or as joint tenants.

Secondly, the person must understand the extent of the property that is being disposed of. This means that at the time of making their Will, the person must have a full understanding of what property they have to give (including real estate, funds in bank accounts, shares, investments and personal effects) and who they are giving it to.

Thirdly, the person must comprehend and appreciate the claims which may be made against their estate, depending on how their Will is made. In other words, the person must understand who may be entitled to make a claim on the estate, and any obligations they may have to a person at the time of drafting their Will.  For instance, if the person has an estranged child that has not been adequately provided for in their lifetime, the child may be entitled to make a claim on the estate.  In this case, it is prudent that the person understands their obligations to leave an adequate gift to certain family members.

Finally, the person must not have any disorder of the mind that will bring about a disposal which, if of sound mind, would not have been made. This means the testator must not have a condition that affects their capacity and decision making ability.

It is important to note that the test for testamentary capacity is time and task specific. The time at which the person must be shown to have had legal capacity is usually the point in time at which the Will is executed.[2]  Whether a person has testamentary capacity is a question of fact, and is for the court to decide, however if a person gives his or her solicitor coherent instructions regarding making their Will, the solicitor must act on those instructions.[3]

What happens if I do not leave a valid Will?

Dying without a valid Will may leave your loved ones and family members with significant problems to manage, as you will be considered legally intestate.

If you die intestate, your estate will be dealt with divided under the rules of intestacy under the Guardian and Administration Act 2000. This means that you or your family members do not have any direct control over what portion of your estate is received and by whom. Distributing an estate under the rules of intestacy may be more complex if adequate provision has not been made for a particular member of your family, and they may seek to receive further benefits from the estate through initiating legal proceedings in the Supreme Court.

Contact us

This article was prepared by the Wills and Estates Team, led by Jon Wiedman, Director.  If you need to make your Will, prepare other estate planning documents, or need legal advice regarding your specific circumstances, please make an appointment with our office on (07) 4637 6300 or alternatively, send us a direct online enquiry.

Related Articles:

Prepare your Wills and Powers of Attorney documents without putting your health at risk

Changes of Law alters outcome for Beneficiaries of a Will

Have you been left out of a Will?

 

[1] Harvey D Posener and Robin Jacoby, ‘Testamentary Capacity’ in Robin Jacoby et al (eds), Oxford Textbook of Old Age Psychiatry (Oxford University Press, 4th ed, 2008) 753, 754; A A Preece, Lee’s Manual of Queensland Succession Law (Lawbook, 7th ed, 2013) 48.

[2] Purser, Kelly, ‘Assessing Testamentary Capacity in the 21st Century: Is Banks v Goodfellow Employment LawStill Relevant’, [2015] UNSWLawJl 30; (2015) 38(3) UNSW Law Journal 854 available at http://www.austlii.edu.au/au/journals/UNSWLJ/2015/30.html#fnB18

[3] A Preece, Lee’s Manual of Queensland Succession Law (Lawbook, 7th ed, 2013) 48; Tipper v Moore [1911] HCA 42(1911) 13 CLR 248, 250 (Griffith CJ).

Request a consultation