Testamentary capacity – the mistaken belief of capacity for a valid Will

The term testamentary capacity is often used but rarely understood. Most would think that a Will would not be valid if the will maker was suffering a disorder of the mind or was suffering an insane delusion about certain matters regarding the obvious beneficiaries to their estate.

Banks v Goodfellow (1870) LR 5 QB 549 is an old English authority adopted in Australia setting down the principles of testamentary capacity:

The will maker (testator) must:

  • understand the nature and effect of making a will ie that the document will govern who is appointed as the executor after the will maker’s death, and what will happen to his or her assets;
  • understand the nature and extent of their property. This does not mean that they should know precisely to the dollar the amount held in their bank account, but understand in general terms what property they own or have a disposable interest in; and
  • have the capacity to comprehend the moral claims of potential beneficiaries on their estate.

One might think that a person who holds a false belief about a beneficiary which affects their decision to make a gift they would otherwise have made, would constitute incapacity.

The cases which have followed Banks have developed concepts of the absence of a ‘disorder of the mind’ including an ‘insane delusion.

In the case of Carr v Homersham [2018] NSWCA 65 the Court of Appeal dealt with a situation where Mrs Hordern, 76 year old woman, had changed her will to leave all of her estate to a friend (rather than her niece and next of kin). She did so because she held a false belief about her niece having made disgraceful comments about her mother, the deceased’s sister, when she had not.

The Court found had the deceased known it to be untrue at the time of the will she would have left her estate to the niece. The Court upheld the will on the basis that even though the belief was untrue, the decision was not irrational, nor the product of a delusion or mental disorder. Because the deceased had not been faced with the truth, it could not be said that the belief was not simply a misunderstanding or mistake.

It is interesting to note that not even a diagnosis of dementia will not preclude a finding of testamentary capacity.

 

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