Incapacity: managing decision-making capacity
By James Whiley
When faced with old age or terminal illness, a Will is a vital document to have in place. Unfortunately, with age and worsening health, there is an increased risk that the decision-making capacity of the testator (or the person making the Will) may worsen.
If there are unhappy beneficiaries or family members looking to challenge a Will, it is becoming increasingly common to make allegations that the testator did not have the required decision-making capacity to make a Will due to their old age or illness, and their Will should therefore be invalid.
If you are looking to make a Will where capacity may be an issue, how can you ensure that you demonstrate that you had sufficient decision-making capacity?
In a world where people are increasingly living to older ages, unfortunately loss of capacity is a very common issue. As advisors, we need to be careful in looking for this.
Some common red flags to look for are: older age in general – not that old age in itself means that you lack capacity, but in the context of estates where there may be claims and contentious matters, it can be something that people seek out and seek to make that assertion.
The other one is illness, so commonly things like dementia and other mental illnesses are red flags. Doesn't always mean that someone lacks capacity. It can also be other illnesses, such as end of life and terminal cancer, where the individual may have their judgement impaired due to the treatment they receive.
Where loss of capacity may be an issue, we need to seek detailed medical advice and a capacity assessment before the client executes their documents to avoid them later being challenged. We should write to the client's doctor, but we're increasingly seeing that GPs are unprepared to provide these assessments, because they want a specialist – geriatrician or other specialist – to provide this, due to the risks involved.
When writing, we explain the documents to the doctor, but we also explain the detailed test to the doctor, in terms of the legal test for loss of capacity, which differ between Wills and powers of attorney and appointments of enduring guardian. We need to ask the doctors to see the clients on their own, without their family member present and we need to ask them to set out detailed reasons for their decisions, including the methodology and views we can use later.
In terms of the test for capacity, that differs between different documents but for Wills, commonly, it's looking at does the client understand the document is a Will, do they understand the nature of their assets, do they understand the nature of any claims that may be against their estate and do they have a mental illness.
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Assessing decision-making capacity
Every person is presumed to have decision-making capacity unless there is evidence to the contrary. The legal standard setting out when a person is considered to have decision-making capacity to make a valid Will differs between all states and territories. However, in general, a person can be considered to have decision-making capacity if they can:
- understand the information relevant to the decision and the effect of the decision;
- retain that information to the extent necessary to make the decision;
- use or weigh that information as part of the process of making the decision; and
- communicate the decision and the person's views and needs as to the decision in some way, including by speech, gestures or other means.
When making a Will, commonly, a testator will have the requisite decision-making capacity if they can understand the document they are signing is a Will, understand the assets they are giving away, and understand the ways that people could challenge their Will.
Getting professional advice
If you believe that your capacity may be called into question, to ensure that your legacy is protected, it is very important that you get advice on the best way to document your capacity.
As solicitors who prepare succession planning documents, we must satisfy ourselves that clients have capacity during the course of the matter, and take detailed notes during our meetings to ensure that this is documented for the future.
Where there are doubts around capacity, we also write to your doctor or specialist setting out the legal tests of decision-making capacity and requesting a detailed letter certifying your capacity.
If you are looking to make a Will and documents to deal with loss of capacity, but want to ensure your succession planning intentions are effective and minimise the chances of disputes, please contact us.
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