A will is a legal document instructing on the distribution of a person’s assets after their death. Anyone over 18 can make a valid will, as long as they have “testamentary capacity”.
What is testamentary capacity?
Testamentary capacity means that a person has the required mental capacity to make a will. It refers to a person’s mental capacity opposed to their physical capacity.
To have testamentary capacity a person must meet the following requirements:
1. Be able to understand the nature of the act of making a will and its effects;
2. Have a general idea about what assets they own;
3. Know who the people are who would normally expect to be provided for under the will. They must be able to think about their family members and whether or not it is appropriate to include them in the will; and
4. Not suffer from a mental condition preventing them from making a rational decision.
What might affect mental capacity?
Limited capacity might be due to a person’s age, illness or injury. For example, a person may not have capacity due to a diagnosis such as Alzheimer’s or dementia.
A loss of capacity may be temporary. For example, a person who is recovering from a head injury. In other circumstances, the loss may be permanent.
There are a variety of legal tests for mental capacity. Some are contained in legislation such as the Guardianship Act 1987 (NSW) and others have been developed over time by courts and tribunals.
A person with limited mental capacity may be able to make certain types of decisions, but not others. For example, a person might be able to make simple decisions such as purchasing food or paying rent but be unable to fully understand more complicated financial arrangements such as investments or trusts.
How is testamentary capacity determined?
Where capacity is in question a medical practitioner will need to provide evidence. A written report from a doctor clarifying any medical condition and its impact on mental capacity may be necessary.
Ultimately, the decision about testamentary capacity is a legal matter which may need to be determined by a court.
What happens if capacity is lost?
Where a person is determined to not have had testamentary capacity when a will was made, the document will not be valid.
If the person has passed away and had previously made a will, the earlier will will likely be declared their last will. If the person has no earlier will, their property will be divided in accordance with the laws of intestacy.
When a living person no longer has capacity to make a will, a new will can be prepared on their behalf. This is called a “statutory will”. A statutory will can only be authorised and ordered by the Supreme Court. Anyone can make an application for a statutory will, providing they have detailed reasons. A statutory will is usually used for asset protection and tax minimisation purposes.
Avoid issues regarding testamentary capacity by preparing a valid will as soon as possible. We recommended that everyone have a current will even if you are young and healthy. There is no way to know for sure that your circumstances won’t change suddenly.
Other requirements for a valid will:
A person with testamentary capacity must also ensure that their will meets the following requirements:
– is in writing;
– is signed by the person making the will; and
– is signed by two independent people who have witnessed the will being signed.
An experienced solicitor will ensure that your wishes are included in a valid will.
For more information see our wills e-book!