The Solicitor’s Role

DISCUSSION PAPER TESTAMENTARY CAPACITY

The Nature of the Problem
I have a duty to serve the best interests of my client. So when a client instructs me to prepare a Will, I must do my best to produce a document and have it executed so that the client is satisfied with it and it will achieve what he wants. There are a number of issues here, that arise at the outset namely:

a) the nature of the instructions (i.e. their form and reliability)

b) my response to what I perceive as deficient or imperfect instructions

c) what do I need, to continue to act

Let us look at these more closely.

The Instructions

Usually it is obvious when a client has testamentary capacity (“TC”). However this is not always the case and I have had situations where there is no immediate trigger for expecting lack of TC and to later find out that the client was suffering from a serious psychiatric illness. This would not of course rule out TC in a lucid interval. More later on this point. The problem arises when you get tell tale signs that raise concerns about TC. These usually are:

• Who is the client? Of course, the client is the testator, but if your instructions are coming from a member of the family or someone outside the family then there would be a need to investigate whether there is any question of undue influence.

• Age. Somebody of advanced years would normally merit some investigation of their TC simply on this basis.

• The appointment with the client. The fact that the appointment to see the client is made by another person and in addition if that other person attends at that appointment it may again raise the issue of undue influence.

• The venue for the appointment. An appointment in my office would not normally trigger concern. However an appointment in the home with a client and more particularly in a Nursing Home or Hospital, may need further investigation.

• Resistance to rapport. Many of the cases and texts refer to the nature of the rapport between the solicitor and the client. Some difficulties in establishing rapport may be:

a) Cultural background. This may arise out of ethnicity or English as a second language.

b) Socio/Economic background. The client may resist being disclosive.

c) Available time. This is important particularly with regard to people who have difficulty in communicating but nevertheless can communicate given enough time and effort. 1

• Terms of the Will. If the client wishes to exclude the normal objects of his bounty, then this would raise concern. 2 Particularly if they had been previously included and subsequently excluded.

• Multiple Wills.

The G.T. Perspective

The issue of capacity arises in the context of an application to the Guardianship Tribunal for an Order. An application must be accompanied by usually two (2) reports from medical professionals providing evidence as to the client’s cognitive functioning. If there is little or no evidence as to lack of capacity then it would be suggested to the applicant that they withdraw the application.

So faced with one or more of these triggers, what do I do? First, I must go to the legal test for capacity.

The Legal Test

Banks v Goodfellow 3 is still the starting point for the test to be applied to determine TC. Whether this test is still entirely relevant in view of advances in medical knowledge, see later. To paraphrase the test, it must be shown that:

• The client understands the nature and effect of what he is doing

• He understands the extent of the property of which he is disposing

• He appreciates the claims that he should deal with

• That there have been no delusions affecting his mind.

The test was confirmed in Timbury v Coffee 4 where Dixon J referred to Hood J in the Will of Wilson at 199:

“Before a Will can be upheld it must be shown that at the time of making it the testator had a sufficient mental capacity to comprehend the nature of what he was doing, and its effect; that he was able to realise the extent and the character of the property he was dealing with, and to weigh the claims which naturally press upon him. In order that a man should rightly understand these various matters it is essential that his mind should be free to act in the natural, regular manner.”

And again in Timbury v Coffee Rich, A-CJ said at 280:

“The factors of competency are that the party must know what he is about, have sense and knowledge of what he is doing and the effect his dispositions will have, knowledge of what his property was, and who those persons were that then were the objects of his bounty.”
The High Court pronounced on the issue of capacity in Gibbons v Wright 5 Dixon CJ, Kitto and Taylor, JJ observed that a person will not have capacity if he does not understand

• The general nature of the transaction when it is explained, and

• The effect of the transaction which the instrument is the means of carrying it out.

Thus we have the propounding of the two elements of capacity, namely understanding the nature and the effect of the document or transaction. By way of clarification the Court alluded to the need for specific tests for specific transactions and said:

“The Law does not prescribe any fixed standard of sanity as requisite for the validity of all transactions. It requires, in relation to each particular matter or piece of business transacted, that each party shall have such soundness of mind as to be capable of understanding the general nature of what he is doing by his participation.”

In Ranclaud v Cabban 6 the nature and effect test is restated by Young J:

“When considering whether a person is capable of giving that sort of power one would have to be sure not only that she understood that she was authorising someone to look after her affairs but also what sort of things the attorney could do without reference to her.”

The main theme through the cases is that the client understands the nature and effect of what they are doing. The nature part requires evidence to show that they understand that they are creating a document that will operate on their death by dealing with their property. I suggest that this implies that they understand the extent of their property not necessarily in detail but at least in general terms e.g. I own my house, my motor car, three bank accounts and shares in four or five companies. And the effect part requires that they understand how the document is going to operate, namely, who will be receiving the property and the property that they will be receiving. This implies that the testator will understand who the people are that he should be providing for.

Now the question arises, what level of understanding must the testator display and how do I go about assessing the level of understanding? The Queensland Law Society has published “Capacity Guidelines for Witnesses of Enduring Powers of Attorney”. These refer to the Queensland Powers of Attorney Act 1998 which states:

Section 41:

(1) A principal may make an enduring power of attorney only if the principal understands the nature and effect of the enduring power of attorney.

The section then goes on to itemise the matters that are included in understanding nature and effect.

The Law Society of New South Wales has also published “Client Capacity Guidelines” September 2003. At page 4:

“The main factor to bear in mind is to carefully assess whether all steps have been taken to ensure proper communication with the client and, if they have been, whether the client is able to understand the information given by the solicitor and to then give proper instructions. In summary, capacity must be assessed in terms of an individual in a particular situation, faced with particular decisions that need to be made. The question of the client’s capacity can arise at any of a number of points in a transaction, and a solicitor who has doubts about the client’s capacity should consider the different decisions the client must make at each stage.” 7

And again from Gibbons v Wright

“The mental capacity required by the law in respect of any instrument is relative to the particular transaction which is being effected by means of the instrument and may be described as the capacity to understand the nature of that transaction when it is explained.”

The Formal Test

There are a number of formal tests that can be carried out with a view to showing the level of cognitive functioning or impairment. See Testing for Mental Capacity in the Elderly. 8 These Tests include:

• Mental Status Exam

• Mini Mental Status Exam (see copy attached)

• Legal Capacity Questionnaire (see copy attached) this test is designed for Lawyers to assess capacity of an elderly client.

• Geriatric Depression Scale

• Neurobehavioral Cognitive Status Examination

• Dementia Rating Scale

• Clock drawing

• DEEP-IN. This is described as a “Screening Test designed to streamline initial assessment of the geriatric patient. These Screens can quickly identify signs of delirium, dementia, depression and adverse drug effects; vision and hearing deficits; risk for future impairments in activities of daily living; incontinence and malnutrition.”

• Practical Guide Line to assessment of competency of the older adult.

• RUDAS (Rowland Universal Dementia Assessment Scale: A Multicultural Cognitive Assessment Scale) (copy attached). This Test is designed particularly for use in the multicultural situation.

A worthwhile book on the subject is “Who Can Decide : The Six Step Capacity Assessment Process” by Darzins, Molloy and Strang.

The G.T. Perspective<

The approach of the Guardianship Tribunal to the determination of capacity is set out in the Guardianship Act 1987. It is worth noting the general principles of the Act.

Section 4: General Principles

It is the duty of everyone exercising functions under this Act with respect to persons who have disabilities to observe the following principles;

• The welfare and interest of such persons should be given paramount consideration,

• The freedom of decision and freedom of action of such persons should be restricted as little as possible,

• Such persons should be encouraged, as fare as possible, to live a normal life in the community,

• The views of such persons in relation to the exercise of those functions should be taken into consideration,

• The importance of preserving the family relationships and the cultural and linguistic environments of such persons should be recognised,

• Such persons should be encouraged, as far as possible, to be self-reliant in matters relating to their personal, domestic and financial affairs,

• Such persons should be protected from neglect, abuse and exploitation,

• The community should be encouraged to apply and promote these principles

Then in dealing with a matter:

Section 55 – Proceeding Generally:

(1) The Tribunal is not bound by the rules of evidence but may inform itself on any matter in such manner as it thinks fit.

(2) Proceedings before the Tribunal shall be conducted with as little formality and legal technicality and form as the circumstances of the case permit.

Section 58 – Right of Appearance

(1) In any proceedings before the Tribunal, the parties to the proceedings may appear in person or, by leave of the Tribunal, be represented by a barrister, solicitor or agent.

Section 66 – Conciliation to be attempted

(1) The Tribunal shall not make a decision in respect of an application made to it until it has brought, or used its best endeavours to bring, the parties to a settlement

(1A) Subsection (1) does not apply in respect of an application if the Tribunal considers that it is not possible, or appropriate, to attempt to bring the parties to a settlement.

The Guardianship Tribunal is inquisitorial and not adversarial. It endeavours to conduct its hearings as informally as possible and this is largely with a view to obtaining a rapport with the person, the subject of the hearing. This is in the hope that the person and others will be able to express their own views and the Tribunal take evidence directly from the parties.

Section 14 – Guardianship Orders

(1) If, after conducting a hearing into any application made to it for a guardianship order in respect of a person, the Tribunal is satisfied that the person is a person in need of a guardian, it may make a guardianship order in respect of the person.

(2) In considering whether or not to make a guardianship order in respect of a person, the tribunal shall have regard to:

a. The views (if any) of:

i. The person, and

ii. The person’s spouse, if any, and

iii. The person, if any, who has care of the person.

b. The importance of preserving the person’s existing family relationships

c. The importance of preserving the person’s particular cultural and linguistic environments, and

d. The practicability of services being provided to the person without the need for the making of such an order.

A person in need of a Guardian is defined

Section 3 – Definitions

(1) In this Act: person in need of a guardian, means a person who, because of a disability, is totally or partially incapable of managing his or her person

(2) In this Act, a reference to a person who has a disability is a reference to a person:

(a) who is intellectually, physically, psychologically or sensorily disabled,

(b) who is of advanced age,

(c) who is a mentally ill person within the meaning of Chapter 3 of the Mental Health Act 1990, or

(d) who is otherwise disabled,
and who, by virtue of that fact, is restricted in one or more major life activities to such an extent that he or she requires supervision or social habilitation

So the test to be satisfied for the appointment of a guardian requires evidence of:

• A disability

• As a result of that disability a need for a guardian

• And that such an appointment is in the best interests of the person.

The test for the appointment of a financial manager is set out in
Section 25(G) Grounds for making Financial Management Order
The Tribunal may make a financial management order in respect of a person only if the Tribunal has considered the person’s capability to manage his or her own affairs and is satisfied that:

(a) the person is not capable of managing those affairs, and

(b) there is a need for another person to manage those affairs on the person’s behalf, and
(c) it is in the person’s best interests that the order be made.

A person not capable of managing his or her affairs was the subject of a decision by Powell J in PY v RJS & Ors 9: who stated the test as follows:

“A person is not shown to be incapable of managing his or her own affairs unless, at the least, it appears;

a. that he or she appears incapable of dealing, in a reasonably competent fashion, with the ordinary routine affairs of man; and

b. that, by reason of that lack of competence there is shown to be a real risk that either;

i. he or she may be disadvantaged in the conduct of such affairs; or

ii. that such moneys or property which he or she may possess may be dissipated or lost;

… it is not sufficient, in my view, merely to demonstrate that the person lacks the high level of ability needed to deal with complicated transactions or that he or she does not deal with even simple or routine transactions in the most efficient manner…”

The reference to “the ordinary routine affairs of man” was clarified further in H v H. 10
The Court stated that this was not just a matter showing that you could go to the bank and draw out money and pay your household bills but that you are able to plan for the future and work out how one will feed oneself and ones family and how one is going to generate income and look after capital. It does not mean that you have to show that you are capable of managing complex financial affairs.

In all of these considerations the Tribunal attempts to achieve the least restrictive alternative as referred to in Section 4(b) which requires that the freedom of decision and action of the person should be restricted as little as possible.

Delusions

“…that no insane delusion shall influence his will.”

The Court in Banks v Goodfellow went on to say;

“A degree or form of unsoundness of mind which neither disturbs the exercise of the faculties necessary for such an act, nor is capable of influencing the result, ought not to take away the power of making a Will.” 3

Then later in Tipper v Moore 11 the High Court stated;

“… delusions are only material to the question of testamentary capacity if they are connected with the dispositions of the will.”

Delusions and the evidence required were dealt with by the Court of Appeal in Easter v Griffith 2 with Gleeson, CJ and Handley, JA dismissing the appeal and Kirby P in dissent. The case although unreported is enlightening. In brief it involved an 84 year old woman who had made several wills over a number of years consistently disinheriting her son and only child. The son challenged the will on the basis of lack of TC. At first instance Santow J decided in the son’s favour. The executor of the will appealed and the Court of Appeal reviewed the evidence. Gleeson CJ stated;

“The power freely to dispose of one’s assets by will is an important right, and a determination that a person lacked (or, has not been shown to have possessed) a sound disposing mind, memory and understanding is a grave matter. Where a testatrix exhibits florid symptoms of psychotic disturbance, such a conclusion may be reached relatively easily. However where, as in the present case, what is claimed is that a woman, who presented to the world an appearance of intelligence and rationality, had formed an aversion to her child so unfounded and unreasoning that it evidences an unsoundness of mind, the decision may be very difficult. This was the point made by Sir James Hannen in his charge to the jury in Boughton v Knight. Nevertheless, difficult though its application may be in individual cases, the law treats as critical the distinction between mere antipathy, albeit unreasonable, towards one who has a claim, and a judgment which is affected by a disorder of the mind.”

Gleeson CJ then went on to restate the traditionally accepted formula of Banks v Goodfellow, and specifically on delusions:

“Where an alleged delusion concerns a fact, or state of affairs, bearing upon a judgment as to the moral claim one person has upon another’s bounty, and the question of its falsity is capable of objective determination, the task of the court is relatively straightforward. However, there may be cases in which one person’s estimation of another’s claim may seem harsh and unwarranted, and perhaps even unnatural, but it is impossible to assign a reason for that, or to point to any false belief. Testamentary capacity is not reserved for people who are wise, or fair, or reasonable, or whose values conform to generally accepted community standards. A person may disinherit a child for reasons that would shock the conscience of most ordinary members of the community, but that does not make the will invalid.

In this area of discourse the concept of delusion is not restricted to false beliefs about objective facts (such as a husband’s belief that his wife is unfaithful). Delusion may also consist in, or involve, a value judgment where “the judgment is so extreme as to defy credibility”. (See the definition in the Diagnostic and Statistical Manual of Mental Disorders, 3rd Ed, Revised (DSM-III-R), 1987, issued by the American Psychiatric Association and cited by M Spitzer, “On Defining Delusions” (1990) Comprehensive Psychiatry, Vol 31, No 5 at 395). In practice, however, it may be much easier to characterise a belief about a matter of objective fact as irrational and the product of a disorder of the mind than it is to characterise a value judgment as so extreme as to warrant the description of a delusion. The scope for difference of opinion about the character of other people, in particular, is so wide that great care needs to be exercised before concluding that a harsh or unreasonable judgment of another amounts to a delusion.”

Gleeson CJ accepted the views of Santow J:

“That it was unnecessary for him to make a positive finding that the testatrix was suffering from insane delusions, in order for the onus of proof of testamentary capacity to fall upon the party propounding the will.”

“The key finding is that there was a plausible case, not rebutted, that the testatrix was unable to consider and give effect to the claims upon her bounty of her only child.”

Kirby J stated that the question was whether on the evidence the testatrix was;

“(1) Responsible for a disposition of her estate which might appear to be harsh or unreasonable by disinheriting her only child completely but was nevertheless a valid will; or

(2) Evidenced an aberration of the mind which affected her capacity to judge the competing claims on her estate, including that of her only child, so as to deprive her of the capacity to make a valid Will.”

His Honour went on to say:

“I am far from convinced that the evidence showed that the testatrix’s behaviour in disinheriting the respondent was such as to give rise to an inference that she lacked testamentary capacity when she made the last will which is propounded by the appellant.”

“In judging the will propounded, and the challenge to it, the court must consider all of the facts proved which are relevant to the testamentary capacity of the testator. It must not be deflected into a consideration of medical evidence, such less of jargon, as to whether particular conditions such as a “delusion” or “paranoia” have been established. Such evidence is only relevant as it throws light on the court’s responsibility to decide whether the testator has appreciated the extent of the property to be disposed of; realised the various calls for disposition to which consideration should be given; and was able to evaluate those calls to give effect to the resulting dispositions by the provisions of the will. See Banks, 557. There is nothing excessively technical in any of these considerations. What the Court is asked to do is to determine, on all of the evidence, whether for the purpose for which the law provides and protects testamentary freedom, the testator had the capacity to give effect of the legal privilege. Determining that question, courts must steadfastly resist the temptation to rewrite the wills of testators which they regard as unfair, unwise or harsh. The only warrant for courts to do that is to be found in the power that Parliament which has given, now, under the Family Provision Act. No wider legislative mandate has been given to the judges. They must not usurp it.”

His Honour went on to conclude that the evidence supported;

“As entirely rational the dispositions made by the testatrix in excluding her son from her last Will. They may, and do, seem harsh, perhaps unwise and even possibly unfair. They may even seem morally wrong to some. But, in my view, they combine to sustain the testatrix’s choice as completely rational and conformable with the criteria which the law lays down for distinguishing the existence of testamentary capacity from its absence…”

“… I am not convinced that the claimed want of testamentary capacity is established simply because of the act of disinheritance.”

The Medical Evidence

“There is clearly scope here for a clear new standard test for testamentary capacity which would consign Banks v Goodfellow to darkest Africa where in my view it belongs.” 12

The author of this comment points out that Banks v Goodfellow was decided in 1870. In that year “Gladstone’s first ministry was barely up and running, David Livingstone was still lost in darkest Africa and Germany as we know it did not even exist…” The author goes on to point out “that medical knowledge of diseases of the mind, let alone judicial knowledge was at that time almost none existent”. It was not until 1907 that Aloies Alzheimer first diagnosed and described the disease which bears his name. Nearly one hundred years later judicial knowledge of the disease remains negligible.

Back in 1870 people died of a range of physical diseases and ailments “only rarely did they outlive their minds”. The present day situation is very different.

“The prevalence of dementia in the population as a whole stated as a modern demographic statistic is now such that one in fifty (1-50) in the age group 65-70 are afflicted rising to one in twenty (1-20) in the age group 70-80 rising again to one in 5 (1-5) in the age group 80 plus”. 13

Prior to 1990 dementia was regarded as a “syndrome”. It indicated the presence of cognitive impairments in multiple domains such as:

• Attention
• Language
• Spatial skills
• Memory

During the 1990’s diagnostic criteria was developed which specified dementia sub-types. Generally these are:

• Alzheimer’s disease
• Vascular dementia
• Dementia due to general medical conditions, HIV, Head trauma, Parkinson’s disease, etc.

It became clear that each sub-type is associated with a particular type of brain pathology and the distribution of the pathology within the brain is different. So the cognitive functioning associated with each sub-type may be different which will in turn affect the management, treatment and prognosis of the sub-type and the impact on legal capacity. In other words, people suffering from dementia do not suffer from global cognitive deficits. They suffer from impairments in particular cognitive domains which will vary with the sub-type. In particular, sufferers will also retain particular strengths and abilities.

For the clinically minded Alzheimer’s disease is described as:

“The accumulation in the brain of neurofibrillary tangles and plaques of beta ameloid protein with an associated deficiency in the neurotransmitter acetylcholine. The tangles and plaques damage the nerve cells and impair the normal function of the brain which ceases to be able to rely on the normal signals between brain cells. The clinical symptoms of Alzheimer’s disease are quite clearly a matter for proper clinical observation and diagnosis by a properly qualified medical specialist such as Psycho-Geriatrician”. 14

The assessment process must be task/domain specific. Then, is it, possible to fix a point when T C is lost? Drs Brodaty and Peisah believe it is.

“…it may be assumed that capacity is preserved in early dementia and lost in late dementia. Any further delineation depends on the pattern of decline. Thus the gradually progressive somewhat predictable decline of Alzheimer’s disease, lends itself to an approximation of such a threshold”. 15

Dr Brodaty states that in the course of Alzheimer’s disease it is possible to clinically identify the point during the progress of the disease where a patient losses capacity. He argues that there are some cognitive functions that can be identified to confirm testamentary capacity, these include:

• Comprehension and judgment required to understand a will to the extent of assets and claims of beneficiaries
• Long term memory
• Immediate memory
• Expressive and receptive language.

He then goes on to outline the requirements for a medical assessment and divides this into contemporaneous and retrospective.

Contemporaneous assessment requires:

• Consultation with the lawyer

• The interview with the client to be as close as possible to the execution of the will. Perhaps a second interview may be appropriate

• Whether the witnesses should be present for the purpose of the client’s comfort and co-operation, but bearing in mind possible undue influence.

• Rapport, and an explanation as to the purpose and nature of the interview.

The interview should then cover a comprehensive examination of the client’s mental status noting in particular the presence of any psychotic symptoms. If possible corroboration should be obtained from medical reports, other clinicians and the clients family.

The retrospective assessment requires:

• Medical records
• Corroborative information from relatives’ friends and business associates.
• Relevant financial and other personal documents.
• A copy of the will and lawyers notes.

Dr Brodaty concludes:

“A clear “test” for competency is unlikely to be developed. It will always depend on the facts and the doctor’s assessment of them. Doctors who can explain why they formed an opinion in a particular case are likely to have that opinion vindicated when the court assesses the evidence. Medical practitioners should appreciate that, though a request for an assessment of testamentary capacity may have been made, as an expert witness in court they will not be permitted to express an opinion about this. Rather, they will be asked for an opinion regarding each of the four requirements for capacity. Ultimately, testamentary capacity is a legal judgment.” 16

Conclusions

The problems associated with testamentary capacity are largely brought about because:

• we live in an ageing society where, more and more, our bodies will outlast our minds.

• the family home (at least in Sydney) is now a “gold mine”.

• notwithstanding testamentary freedom, society expects “next of kin” to be provided for.

• rampant materialism aggravates family dysfunction and the breakdown of loyalty and cohesion.

• legal practitioners are chasing new areas of work.

Despite the advances of medical science it is unlikely that a fool proof test for testamentary capacity will be devised, at least in the near future. Apart from the nature of the test there are other arbitrary factors that will remain relevant such as:

• The skill of the lawyer

• The nature of the venue

• The comfort of the client

• The nature of any distractions.

These matters cannot be built into a test. So I would suggest that if the following matters are covered and all point to confirmation of testamentary capacity, then there would be little room for a challenge.

• An extensive interview by the Solicitor covering all aspects of the legal test and then possibly a follow up interview

• Comprehensive notes by the Solicitor

• A formal test, and I would favour the Legal Capacity Questionnaire.

• A contemporaneous medical assessment

• A second opinion by another legal practitioner

• Some lay evidence by third parties well known to the client but having no interest in the Will.

I come back to where I started that we are there to serve the interest of the client. A will is the one opportunity that the client will have during their life to dispose of their estate. It is a significant event and requires considerable responsibility on the part of the client and the Solicitor.

KEN HANCOCK FEBRUARY 2004

Refrences

1. Shorter v Shorter (2001) NSW SC100

2. Estate Ethel Griffith (deceased) Easter v Griffith Unreported NSW Court of Appeal CA4049/94 judgment June 1995

3. Banks v Goodfellow (1870) LR5 QB549

4. Timbury v Coffee (1941) 66 CLR 277

5. Gibbons v Wright (1954) 91 CLR 423

6. Ranclaud v Cabban (1988) NSW Cov R

7. Law Society of New South Wales, “Client Capacity Guidelines” September 2003

8. Phil Hrenchir, “Testing for Mental Capacity in the Elderly” April 2002 at HYPERLINK “http://www.keln.org/bibs/hrenchir3.html” http://www.keln.org/bibs/hrenchir3.html

9. PY v RJS (1982) 2NSWLR 700

10. H v H unreported, Young J, NSW SC March 2000

11. Tipper v Moor (1941) 66 CLR 277

12. Hedley Marten, “Testamentary Capacity” – Is the Law Still in its Right Mind?” p.4 at HYPERLINK “http://www.11newsquare.co.uk/articles/hmtestcap.htm” http://www.llnewsquare.co.uk/Articles/hmtestcap.htm.

13. ibid.p.2

14. ibid

15. Drs Carmel Peisah and Henry Brodaty “Dementia and the Will – Making Process the role of the medical practitioner” Medical Journal of Australia 1994 at p.382

16. ibid.p.384

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.