Understanding the Impact of Dementia on Testamentary Capacity

Testamentary capacity is required at the time the testator gave instructions for their Will.

The test applied in each state of Australia for determining testamentary capacity is the test set out in the 1870 English case of Banks v Goodfellow.

The test for testamentary capacity is a legal test, not a medical test.

For a person to have testamentary capacity, the person must have:

1. the capacity to understand the nature and effect of the Will,
2. the capacity to understand the extent of the property being disposed,
3. the capacity to understand and appreciate moral claims from potential beneficiaries, and
4. an absence of any disorder of the mind that shall poison his or her affections, pervert his or her sense of right, or prevent the exercise of his or her natural faculties and that no insane delusion shall influence his or her will in disposing of his or her property and bring about a disposal of it which, if the mind had been sound, would not have been made.

Grounds for Contesting a Will Due to Dementia

A disappointed beneficiary who claims the deceased lacked testamentary capacity at the time of making their Will may have grounds to challenge the validity of the Will. Questions may arise due to dementia or other cognitive impairment.

Questions regarding capacity do not arise on intestacy — that is — where the deceased died without a Will, as the absence of a Will obviates the need to make enquires in relation to the deceased’s capacity.

The Role of Undue Influence in Contesting a Will Made By a Person With Dementia

A disappointed beneficiary may claim that the deceased was coerced into changing their Will while suffering from dementia. Often claims allege an imbalance of power, where the testator was elderly, weak or feeble.

Depending on the evidence, the Will may be challenged on the basis of a lack of capacity and undue influence.

A person who believes they may have a claim should seek advice before commencing negotiations or court proceedings, as these grounds can be complex, difficult to prove, and, if alleged without sufficient evidence, can expose the claimant to a costs order to pay the other side’s costs.

Power of Attorney and Its Implications in Estate Planning and Disputes

A power of attorney is a document where one person (the principal) grants power to another person (the attorney) to make legal and financial decisions on their behalf. The power can be general where it ceases once the principal loses capacity, or enduring where the power continues after the principal loses capacity.

While a power of attorney can come into effect immediately, in other cases, the power comes into effect once the principal is unable to make or no longer capable of making decisions for themselves.

Family Provision Claims in the Context of Dementia

A family provision claim is a claim brought by a disappointed beneficiary who believes they were not adequately provided for in the deceased’s Will.

For a court to make a family provision order, the claimant must satisfy the court that they are an eligible person and that the deceased will did not provide adequate provision for their education, maintenance and advancement in life.

A person considering a family provision claim due to disinheritance should seek advice as to their eligibility and prospects of success.

How to Make a Claim Against an Estate Due to Dementia.

1. Identifying the Legal Basis for Your Claim

Whilst each case will turn on its own facts and evidence, a Will made by a person after they have been diagnosed with dementia or Alzheimer’s may still be valid if the Court is satisfied that the four requirements in Banks v Goodfellow have been established on the balance of probabilities. In other words, a person affected by dementia can still make a Will in some cases.

If you suspect a person did not have the ability to make a Will due to a lack of testamentary capacity, you should seek expert advice as soon as possible.

Once evidence is raised to negate testamentary capacity, the onus will shift to the person propounding a Will to establish capacity.

2. Gathering Necessary Evidence and Documentation

Common types of evidence relied upon to determine whether the testator had capacity or a lack of capacity may include:

• file notes of the solicitor who prepared the Will,
• medical records from the person’s treating doctors,
• expert medical reports, and
• witness testimony from friends and family.

Clear evidence of the deceased ceasing to make sound decisions may suggest incapacity.

The issue of testamentary capacity can be complex and the success of a case will turn on the evidence given in the proceedings.

3. Negotiations and Mediation

When it comes to challenging the validity of a Will based on testamentary capacity, it is important to act without delay. If a person waits until a grant of probate has been made in relation to the doubtful Will, they may face more difficulties.

As with most estate disputes, the first step usually involves negotiating with the other parties to see whether an agreement can be reached outside of court.

4. Court Proceedings: Filing the Claim and Understanding Legal Requirements

If negotiations prove unsuccessful, and a person wishes to press their claim, they may commence court proceedings.

This will usually require a solicitor to draft the relevant court documents and to file these documents with the court, officially commencing court proceedings.

5. Finalising the Claim and Understanding the Outcome

If the court is satisfied that the testator did have testamentary capacity at the time they made the Will and finds the Will legally valid, the court will grant probate to the executor named in the Will. The estate will be distributed according to the terms of the Will.

If the court finds the testator lacked capacity at the time they made the Will, the court will refuse to grant probate for that Will, or where probate has already been granted, revoke the probate of that Will, and grant probate for an earlier, valid Will, or, if there is no Will, grant administration to an administrator. The estate will be distributed in accordance with the last valid Will or pursuant to the intestacy laws.

The determination of whether or not a person had capacity can impact the distribution of the entire estate.

Navigating Estate Disputes Involving Dementia: Strategies and Considerations

Where a person who has or is suspected of having dementia wishes to make a new Will, they should seek advice from a expert wills and estate lawyer. The lawyer will be able to assess the person’s testamentary capacity in accordance with the requirements in Banks v Goodfellow at the time they make the Will and if required, have their client assessed by a specialist medical practitioner (i.e. physician or geriatrician). These assessments can be stored on the solicitor’s file and relied upon in future court proceedings to establish capacity.

Contest a Will Due to Dementia with Empower Wills and Estate Lawyers

If you have been impacted by a Will made by a person after a diagnosis of dementia, have questions regarding a person’s capacity to make a Will, or suspect a lack of testamentary capacity or undue influence and would like further advice from a law firm, contact Empower Wills and Estate Lawyers today on 1300 414 844.

Liability limited by a scheme approved under Professional Standards Legislation.

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.