Demystifying the Legal Lingo: Testamentary Capacity Required for a Will
When someone is making a Will, they are required to have testamentary capacity. We explain what testamentary capacity is, why it’s important and what you need to do when you are unsure about testamentary capacity.
A Will is an important legal document that every adult in Australia should have. Your Will sets out your wishes and directions for how you’d like your assets handled when you pass away. When writing your Will, there are many aspects to consider. These include deciding whom you want to appoint as your Executor, inherit your Estate, and appoint as guardian for your minor children. It can also be a good way to state your funeral wishes.
To make a Will in Australia, you are required to be an adult and have something called testamentary capacity.
What is testamentary capacity?
Testamentary capacity is different to physical capacity, as it involves whether a person has the mental understanding and capability to make a Will.
The key test needed to establish testamentary capacity was created by a case called ‘Banks v Goodfellow’ in 1870. This case explained that to establish testamentary capacity, the person making the Will must:
- Understand the purpose and effect of a Will;
- Understand what assets they have available to dispose of by their Will;
- Recognise which people are eligible to make a claim against their estate; and
- Understand who they have a moral or legal obligation to.
What happens if you don’t have testamentary capacity?
If someone does not have testamentary capacity at the time of making their Will, their Will might be challenged, and the Supreme Court could determine the Will is invalid.
If a current Will is considered invalid, the person’s previous Will may apply. If they don’t have any other Will, the person will have died ‘intestate’. Dying intestate means that a person has died without a Will, and the laws of intestacy apply when considering who is eligible to receive the inheritance from the estate.
This puts the distribution of the estate at risk, as the person or people who inherit under intestacy laws are not necessarily going to be the same people the deceased provided for under the Will.
What to do if you’re unsure about testamentary capacity?
As we age, our family may become concerned about our testamentary capacity. It can also be harder for people suffering from capacity-impaired illnesses, such as dementia, to effectively prepare their Will. There are approximately 478,500 Australians currently living with dementia, with rising numbers among young Australians and an expected projection of 1.1 million Australians by the year 2058. As a result, it's extremely important that people consider writing their Will earlier in life.
It’s important to note that a diagnosis of dementia doesn’t necessarily mean that a person cannot write their Will. People often don’t realise that testamentary capacity is a legal test and not a medical test. In this sense, a lawyer is better equipped than a doctor to ask questions that confirm whether there is testamentary capacity.
If you are concerned about testamentary capacity, it’s recommended that you make your Will with a specialist estate planning lawyer. They can take detailed notes and instructions about your capacity.
Before meeting with an Estate Planning Lawyer, it’s a good idea to think about what you want to write in your Will. Create a list of all your close family members, as well as an overview of your assets and liabilities. This will present the lawyer with a snapshot of your current situation and help them give you personalised advice.
During your appointment with a lawyer, they should assess your testamentary capacity. If there are no concerns, they will proceed with the normal stages of their appointment with you. However, if a lawyer is concerned about your testamentary capacity, they may refer you to a medical professional. This could be a geriatrician, a specialist doctor who can provide one or more additional medical reports which detail your capacity. This can be used to assist the lawyer in determining whether you’re able to proceed with writing your Will.
Planning ahead
Safewill Legal is a specialised Wills and Estates law firm that can assist you with all types of Estate Planning, including Wills, Financial Powers of Attorney and Medical Powers of Attorney.
If you are unsure whether you have the testamentary capacity to write a Will, or you are looking to make a Will, contact us at Safewill Legal and we’ll be happy to help.