The 4 Legal Tests for Mental Capacity to Make a Will in NSW

To be of sound mind, memory and understanding, the will-maker must have had testamentary capacity at the time of giving instructions and signing. 

The test for testamentary capacity is not a medical test – but rather a legal test – deriving from the UK case of Banks v Goodfellow (1870). 

In order to establish testamentary capacity, there must be evidence that the will-maker:

1. understood the nature and effect of making a will;
2. had a general understanding of the extent of their estate;
3. had the capability to appreciate the claims on their bounty (though they don’t need to have actually considered the claims); and
4. was not affected by a disorder or delusion that distorts those dispositions.

As the test is a legal test and not a medical test, medical evidence, although often helpful, is not conclusive. A diagnosis alone (even of dementia) is not decisive. What matters is the will-makers testamentary capacity to create the specific will at the specific point in time. 

Gathering evidence to support the above criteria at the time of creating the will, can help the executor with defending claims brought after death which assert a lack of testamentary capacity.

Why Mental Capacity Matters in NSW Estate Planning

If a court finds that a will-maker lacked testamentary capacity to make a specific will, it will refuse to grant probate for that will and will instead, grant probate for an earlier valid will. 

A grant of probate for an earlier will can result in changes to entitlements, delays, and increased costs. 

Obtaining clear evidence of testamentary capacity at the time the will is prepared can reduce the likelihood of a claim being brought, or if a claim is brought, can reduce the risk of the claim being successful, and can therefore achieve smoother administration.

Test 1: Understanding the Nature and Effect of a Will

The first limb of testamentary capacity NSW requires the will-maker to understand a will’s purpose and its legal consequences. Principles that may demonstrate an understanding of the nature and effect of a will include:

• a will is a formal instrument that operates on death and distributes their property;
• it reflects their testamentary intent NSW – who receives what – and can revoke earlier wills;
• it appoints an executor to carry out their wishes; and
• changes can be made by executing a new will that meets the legal framework for wills NSW (for example, the signing and witnessing rules in the Succession Act 2006 (NSW)).

Test 2: Understanding the Extent of Your Estate and Assets

The will-maker must have a general understanding of the extent of their estate. 

Perfect recall or exact dollar values are not required, but they should know the nature and scope of what they own e.g., a home, bank accounts, superannuation (and any death benefit nominations), shares, business interests, or significant debts. This limb links assets and testamentary capacity. If a will-maker cannot broadly identify their property, they may lack the capacity to create a will that fairly disposes of it. 

In NSW, this element is assessed at the time instructions are given and at execution, alongside the valid will requirements NSW in the Succession Act 2006 (NSW) (formal signing/witnessing). 

Major asset changes between instructions and signing should be revisited to ensure the will still reflects the testator’s understanding of their estate.

Test 3: Understanding Possible Claims Against the Estate

A will-maker must be capable of recognising those who might reasonably expect to benefit, typically a spouse or de facto partner, children (including adult or estranged children), and any dependants, and be capable of understanding the consequences of including or excluding them. 

Interestingly, this test does not require the will-maker to actually engage in the mental exercise of weighing claims, just that they had the capability to do so.

Test 4: Not Affected by a Disorder or Delusion at the time

The fourth and final test is that the will-maker was not suffering from any disorder or delusion at the time they did their will. There are no fixed categories of mental illnesses which automatically invalidate a will, but rather, each case must be considered in the context of its own facts and circumstances. 

Where controversial dispositions are intended (e.g., unequal gifts among children), extra precaution should be taken to protect the estate against claims, which may include specific and detailed contemporaneous medical evidence from appropriate medical practitioners (geriatricians) and testamentary statements explaining why the estate was distributed as it was. 

Challenging a Will in NSW (Testamentary capacity): Procedure, Evidence and Onus

• • When and where: testamentary capacity challenges are brought in the Supreme Court of NSW (probate list). They may be commenced before a grant (to prevent probate being granted) or after a grant (to revoke probate).
  • Initial step: in some instances, it may be appropriate to file a probate caveat to prevent a grant of probate being granted while evidence is being gathered.

• Key evidence:

• • Solicitor material: file notes, testamentary capacity assessments, testamentary statements, drafts, explanations given.
  • Medical material: GP/specialist records and any wills-specific assessment near instruction/execution dates.
  • Lay observations (from friends and family): cognition, memory, orientation, any delusions close to signing.
• Assessment focus (from Banks v Goodfellow): testamentary capacity at the relevant time (instructions and execution), understanding of a will’s purpose and plan of gifts, general knowledge of assets, awareness of likely claimants.
• Burden of proof: once doubt has been cast over testamentary capacity, the propounder of the will must prove testamentary capacity on the balance of probabilities.
• Practical notes: in some cases, it may be appropriate to seek interim undertakings to prevent distributions; act quickly to preserve evidence; obtain early advice on prospects and costs in will disputes based on testamentary capacity.

How Courts Assess Testamentary Capacity in NSW

When doubt is cast over testamentary capacity, NSW courts apply the principles set out in Banks v Goodfellow (1870) to the facts proven in evidence. In practice, the Court looks for:

• Capacity at the relevant time: primarily when instructions were given and when the will was executed (capacity can fluctuate; “lucid intervals” are recognised).
• Quality of instructions: coherent, consistent instructions that demonstrate an understanding of a will’s purpose, the plan of gifts, and executor choice.
• Knowledge of assets: a sensible, general grasp of the estate – home, accounts, superannuation, investments, liabilities – showing assets and testamentary capacity.
• Awareness of potential claimants: recognition of those who might reasonably expect to benefit; rational reasons for including or excluding them (relevant to NSW succession laws).
• Solicitor evidence: attendance notes, file memos, testamentary capacity assessments, drafts, and explanations given; adherence to formalities under s 6 Succession Act 2006 (NSW) and, if needed, reliance on s 8 (dispensing power).
• Medical evidence: contemporaneous testamentary capacity assessments and reports; GP/specialist opinions tied to the dates of instructions/execution.
• Behavioural indicators: cognition, memory, orientation; absence of delusions that distort testamentary intent NSW.
• Complexity vs capacity: the more complex or unusual the will, the clearer the Court expects the reasoning to be.

Once testamentary capacity is genuinely in issue, the propounder of the will must prove testamentary capacity NSW on the balance of probabilities.

Preventing Disputes Over Testamentary Capacity

Practical steps for will-makers and advisers to reduce will disputes based on capacity:

• Get timely legal advice: engage a NSW wills lawyer to best ensure the will complies with the formal legal requirements and testamentary capacity is properly examined. 
• Document the reasoning: prepare a testamentary statement explaining why you have left your estate in the manner you have. A NSW wills lawyer will be able to advise on and prepare this document so it strengthens your estate planning objectives overall.
• Obtain targeted medical evidence: if there are any concerns regarding capacity whatsoever, it is often wise to obtain evidence from an appropriate medical specialist confirming capacity with express reference to the relevant legal test.  A NSW wills lawyer will be able to prepare a letter to the medical practitioner informing them of the facts and requesting a response to specific questions. 
• Control the execution environment: ensuring all formal legal requirements are satisfied; avoid beneficiary involvement; use independent witnesses; consider video/audio record of explanation and confirmation of understanding.
• Update when circumstances change: revisit instructions if assets or relationships change before signing; revisit will if assets or relationships change after signing.
• Keep records: retain drafts, letters of advice, attendance notes, and identification of assets to evidence valid will requirements NSW and reduce later challenge.

Get Help with Will Disputes or Capacity Concerns in NSW

Whether you’re planning a will where capacity might be questioned, challenging mental capacity in wills, or defending probate, Empower Wills and Estate Lawyers can help. We advise on testamentary capacity NSW, seek persuasive evidence (solicitor files, medical reports, witness affidavits), and run or defend proceedings in the Supreme Court of NSW. For clear, practical guidance on NSW wills and estates, call 1300 414 844.

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Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources which are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.