18 April 2016

Strict Test for Testamentary Capacity

Kellie Keenan, Charlie Young
Kellie Keenan
Charlie Young

In the recent decision of MPL [2016] QSC 61, the Supreme Court of Queensland has provided an important reminder of the relevant test to establish whether or not a person has testamentary capacity to make a Will and the importance of each limb of that test.

MPL is a 24 year old male who suffered a traumatic brain injury in 2012. As a result of the accident, he received a compensation payment in excess of $7 million.

In February 2016, he gave instructions to a solicitor to prepare a Will and he signed that Will.

MPL’s mother recognised that upon her son’s death, someone could try to argue that MPL did not have the necessary capacity when he created the Will, which might render it invalid. Therefore, to avoid any doubt, MPL’s mother made an application for a Court ordered Will  (or “Statutory Will”) for MPL in the same terms as ‘the Will’ he signed in February 2016.

The Court confirmed that before it can make a Statutory Will for any person, the Court must first be satisfied that the person lacks testamentary capacity.

What is testamentary capacity? It is often described has having soundness of mind, memory and understanding to make a Will.

What is the test for testamentary capacity? At the time a Will is signed, the person making it must:

  • understand the nature and effect of making a Will;
  • understand the extent of their property that they are disposing of by their Will; and
  • appreciate the claims that could be made on their estate when they die.

When assessing whether MPL lacks testamentary capacity, the Court considered several expert medical reports. Ultimately, the medical reports concluded that MPL understands the nature and effect of making a Will and the persons who will have a claim against his estate when he dies. However, the reports revealed that MPL was not aware of the nature and extent of his estate, on account of his short term memory loss. In this regard, MPL could report to his solicitor (after prompting) the amount of his compensation payment, but could not recall the amount of the payment when questioned by a doctor.

Therefore, because MPL could not satisfy all three limbs of the test for testamentary capacity, the Court determined that he did not have testamentary capacity to make a Will and that it was appropriate for the Court to make one for him.

MPL’s Statutory Will makes gifts to his mother, sister, step-brother and nieces and nephews. By comparison, if no Will was made for MPL by the Court, his estate would be distributed according to the rules of intestacy when he dies, being to his mother and father only.

This case is a powerful demonstration of the importance of Statutory Wills, to ensure that the wishes (or likely wishes) of those people who do not have the testamentary capacity to make a Will are carried out when they die.

For more information or advice in relation to Statutory Wills, please contact a member of our team today.

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