Assessing capacity for making a Will cherry

The number of people living with Dementia in the UK is projected to nearly double from 850,000 to 1.6 million by 2040, mainly due to an ageing population (according to Dementia UK). Therefore, ensuring that the right tests and assessments are followed to establish that a person making a Will (the “testator”) has capacity to make the Will (known as “testamentary capacity”) is becoming increasingly important.

Anyone over the age of 18 years can make a will provided they are of sound mind. In legal terms, the testator should have the capacity to specifically make a will. The test for testamentary capacity was established in the case of Banks v Goodfellow (1870) and includes having an understanding of the following:

the nature and effect of making a will;
the extent of their estate;
the claims of those who might expect to benefit from the testator’s will (both those included in the will and those excluded); and
the testator should not have a mental illness or a disorder of mind that shall poison their affections and influence them into making bequests they would not otherwise have made, if their mind had been sound.

With an ageing population leaving substantial estates, it is becoming common for wills to be challenged on the grounds that the testator lacked capacity. It is therefore important to record the testator’s understanding of matters at the time they made their will and, in some circumstances, it is advisable to obtain medical evidence of their capacity.

The Mental Capacity Act 2005 (MCA) has introduced an additional statutory test for mental capacity. This has understandably caused a long running debate over which test should apply. This has finally been answered in the recent case of Clitheroe, Re Probate [2021] EWHC 1102 (Ch) which confirms that, when assessing testamentary capacity, the Banks v Goodfellow test should be followed both by Will writers and medical practitioners. It should also be applied retrospectively by the court in contentious probate cases.

The testator must have capacity both when instructions are given to draft the Will and at the time the Will is signed which can create issues where the testator’s capacity is diminishing over time. Where an adviser is making a will for an elderly client or one who has been seriously ill, they should therefore follow the “golden rule” – that is to have a medical practitioner witness the Will and document their examination of the testator.

What if someone does not have the capacity to make a Will?

If an individual lacks testamentary capacity, they will not be in a position to make a will. This does not necessarily mean that it is too late for them and they have no option but to subject their estate to the rules of intestacy. It may be appropriate, in some circumstances, to ask the Court of Protection for permission to make a will on behalf of the person who has lost capacity. Such a will is called a Statutory Will and the Court of Protection has the power, under Section 18(1) of the Mental Capacity Act 2005 to authorise this.

The Court of Protection

The Court of Protection is a specialist Court set up to protect the interests of those who are unable make certain financial or welfare decisions because they lack capacity.

Where an attorney has already been appointed to manage the affairs of someone who lacks capacity (via an LPA), they have the power to make some decisions. But an attorney cannot simply go ahead and make a will on behalf of someone who lacks capacity. There are instances where the Court’s permission is required, regardless of whether an attorney exists, and making and signing a will on behalf of a vulnerable person is one such instance.

Who may apply for a statutory Will?

Applying for a statutory will is not as straightforward as giving instructions for a will and executing it. It involves making an application to the Court, submitting evidence for the Court’s consideration and allowing the Court to make a decision as to whether the statutory will is in the vulnerable person’s best interests.

Before an application is made to the Court of Protection, the Court’s permission is usually required. However, some categories of people are exempted from seeking permission. They are:

the vulnerable person;
the donor or donee of a Lasting Power of Attorney;
an attorney under a registered Enduring Power of Attorney;
a deputy appointed by the Court of Protection;
persons who may become entitled to the vulnerable person’s estate under the rules of intestacy or under an existing will; and
a person for whom the vulnerable person might be expected to provide if they had capacity.
A concerned relative or a friend wishing to make an application will need the court’s permission before making an application for a statutory will unless they fall under the above categories.

When should a Statutory Will be considered?

There are a few situations where a statutory will may be considered appropriate and/or necessary:

The vulnerable person has never made a Will before;
The Estate has reduced in value;
The Estate has increased in value, for example as a result of compensation awarded;
Tax planning purposes in some circumstances;
A beneficiary or beneficiaries under an existing Will has passed away;
A beneficiary under an existing Will has already received substantial gifts and the Will should be adjusted;
The vulnerable person’s wishes under an existing will have been frustrated as a result of an attorney selling a property that is subject of a specific gift.

The Court of Protection is most likely to allow a statutory will if the person who lacks capacity has never made a Will or there has been a significant change in their circumstances.

Factors which the Court of Protection will consider

The Court of Protection is required to apply an objective test and assess whether the proposed statutory will is in the vulnerable person’s best interests. When determining a statutory will application, the Court of Protection will try and encourage the vulnerable person to participate and will consider the checklist of steps to follow in section 4 of the Mental Capacity Act 2005 which include:

Identifying all relevant circumstances

Taking into account the vulnerable person’s past and present wishes and feelings (and, in particular, any relevant written statement made by the vulnerable person when they had capacity); their beliefs and values that would be likely to influence the vulnerable person’s decision in question; and

Any other factors that the vulnerable person would be likely to consider if they were able to do so.

In addition to the above factors, the Court of Protection will take into account the views of those who are engaged in caring for the vulnerable person, the views of the attorney chosen by the vulnerable person or the view of the deputy appointed for the vulnerable person by the Court of Protection - as to what would be in that vulnerable person’s best interests.

Balancing wishes

A vulnerable person’s known wishes and feelings will be of great importance. However, they are not paramount. That is not to say that the vulnerable person’s expressed wishes should be lightly overridden - they will be an important factor to consider but the Court of Protection must also have regard to other relevant circumstances and factors.

The court may also look to locate any previous wills written by the vulnerable person, then the court can consider any previous wishes and feelings that they may have had. It is therefore recommended that will search is conducted when applying for a statutory will.

Final decision

Ultimately, the decision lies with the Court of Protection. The Court must be convinced that authorising the execution of a statutory will is in the vulnerable person’s best interests and the Court may even end up approving a statutory will which is different to the terms initially proposed in the application.

The vulnerable person therefore has no final say as to what will happen to their estate after they die. This is why it is advisable for one to take control of their financial affairs in advance, at a time when they are of sound mind, and put a Will in place.