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TRANSCRIPT
CAPACITY:
INTER VIVOS AND TESTAMENTARY GIFTS
LUKE HARRIS
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INTRODUCTION
1. The law of gifts is wide-ranging and complex. When examining the validity and
effect of an alleged gift it is necessary to consider a number of factors:
(1) The form of the gift and the relevant formalities for gifts of that kind.
The principle tripartite distinction is between: (1) gifts inter vivos, (2) gifts
mortis causa and (3) testamentary gifts. The formalities for the gift will in
part depend on which of type of gift is under consideration and in part
upon the type of property conveyed (i.e. personalty, land etc.).
(2) Issues of competence and capacity in relation to the donor and
donee. The essence of every gift is that there is both a giving and a taking
of property. It is therefore necessary that the donor should be competent
to give, and the donee competent to receive, the property in question.
(3) The consequences of any imperfection in the gift. Once any failure in
the transaction has been identified it is necessary to give careful
consideration to the precise consequences of the defect (is the whole
transaction void or merely voidable, what are the effects of third party
rights etc.). Different consequences may follow from different
imperfections.
2. This paper focuses upon issues of capacity as they relate to inter vivos and
testamentary gifts. It considers the test of capacity in relation to each type of gift
and the remedial consequences in cases where the donor or testator is shown to
lack capacity.
INTER VIVOS GIFTS
The general rule
3. Prima facie any person who is of full age and capacity can dispose of any property,
or any estate or interest in property, to which he is absolutely entitled. Legal and
equitable principles dictate that a person of full age and capacity acting freely,
fairly and with sufficient knowledge ought to be able to make a voluntary
disposition of any part of their property.1 A gift may be executed under a power
of attorney, provided the power is executed as a deed and authorises the gift.
1 The equitable doctrine of undue influence is, of course, directed at these issues. A gift will be impeached for undue influence where, in the eyes of equity, it is not an independent expression of the donor’s free will.
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The Court of Protection
4. A gift by a person who, by reason of mental disorder, is incapable of managing
and administering his property and affairs, so that the management of his property
has been committed to the Court of Protection, is not be a valid gift. The
individual’s status as a patient of the Court of Protection means that he is disabled
from making a gift regardless of his de facto capacity to give at any particular time.2
The common law test of capacity
5. The locus classicus of the common law test for capacity to make a gift in respect of a
person who is not a patient of the Court of Protection is the judgment of Martin
Nourse QC in Re Beaney.3 His Lordship held that the mental capacity required
to make a gift is the capacity to understand the nature of the transaction when it is
explained to the donor;4 and the level of understanding required depends on the
circumstances of the transaction:
“The degree or extent of understanding required in respect of any instrument is relative to
the particular transaction which it is to effect. In the case of a will the degree is always
high. In the case of a contract, a deed made for consideration or a gift inter vivos,
whether by deed or otherwise, the degree required varies with the circumstances of the
transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in
relation to the donor’s other assets a low degree of understanding will suffice. But, at the
other extreme, if its effect is to dispose of the donor’s only asset of value and thus, for
practical purposes, to pre-empt the devolution of his estate under his will or his intestacy,
then the degree of understanding required is as high as that required for a will, and the
donor must understand the claims of all potential donees and the extent of the property
disposed of.”
6. The test has been applied many times since. Recent examples are: Re Morris,
Special Trustees for Great Ormond Street Hospital for Children v Rushnin
(2001)5 Willams v Williams (2003);6 Qutb v Hussain (2005),7 Re Sutton
(2009)8 and Gorjat v Gorjat.9
2 Re Walker [1905] 1 Ch 160. 3 1978] 1 WLR 770. 4 Citing with approval the decision of the High Court of Australia in Gibbons v Wright (1954) 91 CLR 423. 5 [2001] WTLR 1137 (D) 598. 6 [2003] WTLR 1371. 7 [2005] EWHC 157 (Ch). 8 [2010] WTLR 115. 9 13 ITELR 312.
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7. Where the donor has formed an intention at the outset to make a series of gifts
which he effects over a relatively short period, it is appropriate to consider the
course of conduct as a whole.10 The thought underlying this proposition is that if
the test in Re Beaney11 is applied to each gift in isolation it would become
progressively more difficult to satisfy. Each successive gift would require a higher
degree of understanding than the last because the later gifts in the sequence would
have a greater significance in the sense of representing a greater proportion of the
donor’s remaining assets.
8. The test in relation to testamentary capacity has recently been expanded to take
into account not only the testator’s ability to understand the various matters
required of him by the Banks v Goodfellow test, but also his decision-making
powers. By parity of reasoning, it is strongly arguable that the common law test in
relation to inter vivos gifts should also be construed in this more expansive manner.
Time of assessment
9. The relevant time for the assessment of capacity is at the time the gift was made.
Burden of proof at common law
10. The legal burden of proving lack of mental capacity lies on the person alleging it.
In other words, every adult is presumed to have mental capacity until the reverse
is proved.
11. Incidentally, it is worth noting that, although the issue under consideration here is
the burden of proof in relation to the issue of capacity, there also said to be an old
rule that a gift alleged to have been made by a deceased donor cannot be
established without some corroboration. Nowadays, it seems that there is no
longer a hard and fast rule that the evidence of the alleged donee must be
disbelieved unless corroborated although the court will examine that evidence
with great care, if not suspicion.
12. If the claimant establishes a prima facie case of lack of capacity that the evidential
burden will shift from the claimant to the defendant.12 To shift the evidential
burden it is not sufficient for the claimant simply to call into question capacity
10 Gorjat v Gorjat 13 ITELR 312, para 136. 11 [1978] 1 WLR 770. 12 Williams v Williams [2003] WTLR 1371, 1384; Gorjat v Gorjat 13 ITELR 312, para 139.
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generally: he must make out a case that the donor lacked capacity to a sufficient
degree to call into question the validity of the transaction under consideration.13
13. Once the evidential burden has shifted it will then be for the defendant to prove
capacity.14
Effect of the Mental Capacity Act 2005
14. The Mental Capacity Act 2005 (“the Act”), ss.1-4, came into force on 1 April
2007.15
“1. The Principles
(1) The following principles apply for the purposes of this Act.
(2) A person must be assumed to have capacity unless it is established that he
lacks capacity.....
2. People who lack capacity
(1) For the purposes of this Act, a person lacks capacity in relation to a matter
if at the material time he is unable to make a decision for himself in relation
to the matter because of an impairment of, or a disturbance in the functioning
of, the mind or brain....
3. Inability to make decisions
(1) For the purposes of section 2, a person is unable to make a decision for
himself if he is unable:
(a) to understand the information relevant to the decision;
(b) to retain that information;
(c) to use or weigh that information as part of the process of making the
decision; and
13 Gorjat v Gorjat 13 ITELR 312, para 140. 14 The position is similar to with cases of undue influence. The legal burden of proving undue influence rests with the party alleging it. However, in cases of ‘presumed undue influence’ proof by the claimant of (1) a relationship of trust and confidence, and (2) a transaction which calls for explanation will have the effect of shifting the evidential burden to the defendant to rebut the undue influence which is presumed or inferred in such cases. See the analysis of Lord Nicholls in Royal Bank of Scotland v Etridge (No.2) [2002] 2 AC 773 at paras 13 and 14. 15 SI 2007/563. The rest of the Act came into force on 1 October 2007: SI 2007/1897.
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(d) to communicate his decision (whether by talking, using sign language
or any other means).
(2) A person is not to be regarded as unable to understand the information
relevant to a decision if he is able to understand an explanation of it given to
him in a way that is appropriate to his circumstances.
(3) The fact that a person is able to retain the information relevant to a decision
for a short period only does not prevent him from being regarded as able to
make the decision.
(4) The information relevant to a decision includes information about the
reasonable foreseeable consequences of-
(a) deciding one way or another; or
(b) failing to make the decision.”
15. The Act is supplemented by a Code of Practice made under it (“the Code”).
16. The statutory test of capacity is therefore a two-stage test. A person lacks capacity
if:
(1) they have an impairment or disturbance that affects the way in which the
brain or mind works; and
(2) the impairment or disturbance means that they are unable to make a
specific decision at the time it needs to be made.
17. The question arises what effect, if any, the statutory definition in the Act, and the
Code, has on the old common law test of capacity. The position is rather
confusing. At the time of writing no reported case has settled this issue. Most of
the commentary in the cases has been about the relationship between the Act and
the old common law test of testamentary (rather than inter vivos) capacity. Here,
the position appears to be as follows:
(1) There is some doubt about whether the statutory definition of capacity has
any relevance to wills made outside of the statutory jurisdiction, i.e. as
whether ‘the purposes of the Act’ (s.1) includes making a will outside of
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this jurisdiction.16 Some passages of the Code suggest not. Paragraphs
4.41-33 provide:
“What other legal tests of capacity are there?
4.31. The Act makes clear that the definition of ‘lack of capacity’ and the two
stage test for capacity set out in the Act are ‘for the purposes of this Act’. This
means that the definition and test are to be used in situations covered by this
Act. Schedule 6 of the Act also amends existing laws to ensure that the
definition and test are used in other areas not directly covered by this Act…
4.32. There are several tests of capacity that have been produced following
judgments in court cases (known as common law tests). These cover:
• capacity to make a will
• capacity to make a gift
• capacity to enter into a contract
• capacity to litigate (take part in legal cases), and
• capacity to enter into marriage.
4.33. The Act’s new definition of capacity is in line with the existing common
law tests, and the Act does not replace them. When cases come before the court
on the above issues, judges can adopt the new definition if they think it is
appropriate. The Act will apply to all other cases relating to financial,
healthcare or welfare decisions.”
(2) Notwithstanding this, the better view is that the statutory test probably
does apply to wills. 17 However, to avoid giving the Act a retrospective
effect, the definition should only be applied to wills made after the date
when ss.1-4 came into force, namely 1 April 2007. As regards will made
before that date, the common law test continues to apply.18
16 Scammell v Farmer [2008] WTLR 126 at [26]. 17 This is the view adopted by ‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010), para 6.3. This is a joint BMI and Law Society publication. In Re Gale [2010] EWHC 1575 (Ch) Jules Sher QC said that the common law test of testamentary capacity “has not been displaced as the applicable test in this area by the Mental Capacity Act 2005, at least in relation to testamentary instruments which ante-date the coming into force of that Act”. However, the Court of Appeal did not address the point in Perrins v Holland [2010] WTLR 1415. 18 Scammell v Farmer [2008] WTLR 1261 at para [27] – [30]. It is not clear from this passage whether the judge thought that the critical event to bring the test into play was when the will was made, when the death occurred or
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(3) In any case, the statutory test is probably a modern restatement of the
traditional test for testamentary capacity (considered below), namely that
propounded in Banks v Goodfellow.19
18. Turning back to inter vivos gifts, it is suggested that the position is the same.
Consequently, as regards gifts made prior to 1 April 2007, the common law test
applies but, thereafter, the Act is engaged.
19. At the time of writing there is no reported case authoritatively dealing with the
effect of the Act on the common law test of capacity for inter vivos gifts. However,
the correct view seems to be the Act supersedes the common law and introduces
a new, statutory test of capacity in respect of gifts made after 1 April 2007.20
Comparison between common law and the Act
20. On the assumption that there are two tests of capacity in play depending upon the
timing of the gift in issue, the next question is what, if anything, is the difference
between them. Two points call for comment:
(1) First, the Act contains a statutory presumption of capacity (s.1(2)). As
noted above, this was the position at common law in any event.21 The
question might then be posed whether the new statutory presumption
alters the law as regards evidential burdens set out above. It is submitted
that it probably does not.
(2) Second, it is arguable that the Act has introduced a different substantive
test for capacity in relation to inter vivos gifts. Although the Code
comments (para 4.33.) that the statutory definition of incapacity is “in line
with the existing common law tests, and… does not replace them” it is difficult to
make sense of this comment. Given that the test for inter vivos capacity is
different from the test of testamentary capacity, it is hard to see in what
when the claim was issued. The correct view would seem to be when the will was made: see further Re Key [2010] 1 WLR 220 at para [94]. 19 (1870) 5 QB 549. 20 Again, this is the view endorsed by ‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010), para 7.3 a joint BMI and Law Society publication. The suggestion that the new test will apply in respect of transactions which post-date the coming into force of the Act is based upon an analogy with the test for testamentary capacity and makes reference to Scammell v Farmer [2008] WTLR 1261. In the recent case of Gorjat v Gorjat 13 ITELR 312 Sarah Asplin QC commented: “Lack of mental capacity is now dealt with at ss 2 and 3 of the Mental Capacity Act” implying that her Ladyship thought that the Act had superseded the common law. However, following Scammell v Farmer she declined to apply the Act to the inter vivos gift in question on the ground that the gift pre-dated the legislation. 21 In Gorjat v Gorjat 13 ITELR 312 Sarah Asplin QC observed that (para 139) that s.1(2) put the presumption of capacity “on a statutory footing”.
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sense the statutory definition can be “in line with” both. In particular, the
emphasis at common law in relation to inter vivos gifts has traditionally been
on comprehension rather than decision-making22 whereas the statutory test
is fundamentally directed at decision-making.
TESTAMENTARY GIFTS
The common law test of capacity
21. The test of testamentary capacity at common law is set out in the well known
judgment of Cockburn CJ in Banks v Goodfellow:23
“It is essential to the exercise of such power that a testator shall understand the nature of
the acts and its effects; shall understand the extent of the property of which he is
disposing; shall be able to comprehend and appreciate the claims to which he ought to give
effect; and, with a view to the latter object, that no disorder of the mind shall poison his
affections, pervert his sense of right, or prevent the exercise of his natural faculties – that
no insane delusion shall influence his will in disposing of his property and bring about a
disposal of it which, if the mind had been sound, would not have been made.”
22. Recently, the courts have confirmed that the test in Banks v Goodfellow24 has
stood the test of time and does not need to be reformulated in modern language.25
The test thus stated can be broken down into four individual issues, each of which
must be satisfied separately.26 The requirements of capacity are:
(1) that the testator shall understand the nature of the act and its effects;
(2) that the testator shall understand the extent of the property of which he is
disposing;
(3) that the testator shall be able to comprehend and appreciate the claims to
which he ought to give effect and, with a view to the latter object;
(4) that no disorder of the mind shall poison the testator’s affections, or
prevent the exercise of his natural faculties – that no insane delusion shall
22 Although see para 8 above. 23 (1870) LR 5 QR 549, 565. 24 (1870) LR 5 QR 549, 565. 25 Sharp v Adams [2006] WTLR 1059, at paras [66] & [82] 26 Kostic v Chaplin EWHC 2298 (Ch) at para 197. Following the approach in Sharp v Adams [2006] WTLR 1059.
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influence his will in disposing of his property and bring about a disposal of
it which, if the mind had been sound, would not have been made.27
23. The most recent case to consider the Banks v Goodfellow test is Re Key.28 In
that case Briggs J arguably developed the test to focus more on the testator’s
decision-making capacity, rather than his ability to comprehend, than had
previously been the case. He said:
“This is not one of those cases in which it is possible to point simply to a conspicuous
inability of the deceased to satisfy one of the distinct limbs of the Banks v
Goodfellow test. Rather it is a case in which I have been persuaded, taking the evidence
as a whole, that Mr. Key was simply unable during the week following his wife's death
to exercise the decision-making powers required of a testator. In any event, the defendants
have not discharged the burden of proving that he was. To the extent that such a
conclusion involves a slight development of the Banks v Goodfellow test, taking into
account decision-making powers rather than just comprehension, I consider that it is
necessitated by the greater understanding of the mind now available from modern
psychiatric medicine, in particular in relation to affective disorder.”
Time of assessment
24. The time for assessing capacity is both at the time when instructions for the will
are given and at the time of its execution.29 However, where it is shown that the
testator had testamentary capacity at the time when he gave his instructions it will
be sufficient if, at the time of execution, the testator appreciates that he is being
asked to execute as his will a document drawn up in accordance with his
instructions even though the testator may not be able to follow all the
provisions.30
Burden of proof at common law
25. There is a presumption at common law that the testator had testamentary capacity
at the time when he made his will. A will which is not on its face irrational, and
which is duly executed, will be admitted to probate without proof of competence.
27 In Kostic v Chaplin EWHC 2298 (Ch) it was suggested in argument that issue (4) was in fact a sub-element of issue (3). Henderson J rejected the submission (at para 198). 28 [2010] 1 WLR 220. 29 Wellesley v Vere (1841) 2 Curt 917. 30 This is the rule in Parker v Felgate (1883) 8 PD 171. The rule was recently applied by Lewison J in Perrins v Holland [2009] EWHC 1945 (Ch), approved by the Court of Appeal [2010] WTLR 1415.
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However, if the testator’s capacity it is put in issue, it is for the party propounding
the will to prove that the testator was competent to make it.
26. In terms of discharging this burden, the law presumes that a state of affairs shown
to exist continues to exist until the contrary is proved. So, where there is no
suggestion that the testator lacked capacity, the testator will be presumed to have
remained competent at the time he made his will.31
27. Conversely, if the evidence shows that the testator lacked capacity at some earlier
point in time it will be for the person propounding the will to prove competence
at the relevant time.32 However, the strength of the presumption against capacity
will depend upon other circumstances. Thus, if the will contains dispositions
which are prima facie not such that an ordinary testator would make, the
presumption will be harder to overcome but where they are such as a sane testator
would make, and more so, if the testator drew the will himself, the presumption is
weaker.
Lucid intervals
28. Where the testator is shown to lack capacity before the execution of the will, the
party propounding the will must prove a lucid interval: it is not necessary to prove
full mental recovery.33
Effect of the Act and comparison with the common law
29. The interface between the common law test of testamentary capacity and the new
statutory test under the Act has been considered above.34 As already noted, the
emergent view seems to be that the statutory test of capacity is a “modern restatement
of the test propounded in Banks v Goodfellow”,35 so the Act does not seem to have made
a substantive change to the actual test of capacity.36
30. However, one important point of difference between the Act and the common
law is the burden of proof. The common law principle, which places the burden
31 Chambers and Yatman v Queen’s Proctor (1840) 2 Curt 415. 32 Banks v Goodfellow (1870) LR 5 QB 549. 33 For an example of a case where the party propounding the will failed to establish a lucid interval see Richards v Allan [2001] WTLR 1031. 34 See paragraph 17 above. 35 Scammell v Farmer [2008] WTLR 126 at [24]. 36 It might actually be questioned whether this is actually so. Traditionally, the test in Banks v Goodfellow (1870) LR 5 QB 549 is focused upon the testator’s ability to comprehend, rather than his ability to take decisions. However, in light of the recent decision in Re Key [2010] 1 WLR 220, the common law might have developed in such a way since Scammell v Farmer [2008] WTLR 126 as to retrospectively justify this view: see para 23 above.
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of proving capacity upon the person propounding the will, cannot be reconciled
with the statutory presumption of capacity in s.1(2) of the Act.
31. It is therefore submitted that the Act has changed the law in this regard and that
the principle that now applies is the same as the common law burden of proving
capacity for inter vivos gifts (which does conform to the Act).37
EVIDENCE
Inter vivos gifts
32. The principles which apply to the admissibility of evidence of capacity in the wills
cases are more clearly developed. It is submitted that the same principles apply,
mutatis mutandis, in relation to inter vivos gifts.
Testamentary gifts
33. The following principles are drawn from the law of testamentary gifts.38
(1) Both oral and documentary evidence is admissible to show that the testator
was of sound disposing mind at the relevant time.
(2) Statements made by the testator when he made his will, or in preparation
for its production, are admissible to prove that the testator knew the
character of what he was doing.
(3) The fact that the will is in the testator’s own writing is a strong indication
of capacity.
(4) Evidence of an attesting witness to the effect that the testator lacked
capacity is admissible but requires corroboration because is necessarily
impeaches the witnesses own act of attestation.
(5) Evidence as to the manner in which the will was made is admissible.
(6) Evidence is admissible to show that the will accords with the testator’s
natural affection and moral duty and also that it conforms to the testator’s
past and subsequent declarations of intent.
(7) Evidence of the testator’s general habits and course of life is admissible.
37 See paras 20(2) above. 38 See generally Williams on Wills (2002) at para 4.20.
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(8) Evidence of the testator’s conduct before and after making the will is
admissible.
(9) The treatment of the testator by his friends and relations is admissible as
for or against them.
34. The following evidence is seemingly not admissible in relation to testamentary
gifts:
(1) Evidence that unsoundness of mind exists or has existed in the testator’s
family.
(2) Evidence that the testator had a general reputation as suffering from
unsoundness of mind.
Medical evidence
35. Medical evidence will normally consist of:
(1) The donor’s or testator’s medical records (GP records and records of any
specialists who have seen him).
(2) Expert evidence produced by an independent expert, who is instructed to
give his opinion on the donor’s or testator’s medical records. Obviously, if
the donor is alive, the expert may be able to supplement this material by
assessing the donor himself.
36. It is important to distinguish between factual evidence given by medical
practitioners who have experience of the donor or testator and evidence by way of
expert opinion.
(1) Medical evidence obviously carries great sway with the court. The
evidence of any expert who has attended the donor or testator is
admissible but the witness cannot be asked to give his opinion about facts
which he has not observed himself.
(2) It is also important not to fall into the trap of thinking that expert evidence
will be decisive. The precise weight afforded to the expert will vary
according to the facts of the case. In some cases expert evidence has been
outweighed by the factual evidence of witnesses who had the opportunity
of assessing the donor’s or testator’s capacity based upon their own
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observations and experience. The court will be wary of placing too much
reliance on the evidence of medical experts who did not have the
opportunity of seeing the deceased.
The golden rule – wills
37. Any solicitor who is instructed to prepare a will must have ‘the golden rule’ at the
front of his mind. The substance of the golden rule is that when a solicitor is
instructed to prepare a will for an aged testator, or for one who has been seriously
ill, he should arrange for a medical practitioner first to satisfy himself as to the
capacity and understanding of the testator, and to make a contemporaneous
record of his examination and findings.39
38. Compliance with the golden rule does not operate as a touchstone of the validity
of a will, nor does non-compliance demonstrate its invalidity. Its purpose is to
assist in the avoidance of disputes, or at least to minimise their scope.
39. Any solicitor taking instructions for the preparation of a will should also consult
‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010)40 and the
Solicitors’ Code of Conduct 2007, Guidance Notes to rule 2.01, para 6(a)(iii)
(‘Taking on Clients’).
CONSEQUENCES AND REMEDIES
Gifts inter vivos
40. Where an inter vivos gift is infected by lack of capacity the question arises as to
whether the gift is void or voidable.41 On either footing, the gift will be ‘invalid’
and is liable to be set aside. This being the case, the precise status of the
impugned transaction is arguably irrelevant although from time to time it is argued
that the void/voidable distinction may have some significance for tax purposes.
There are authorities (including Re Beaney itself) in which the gift has been held
to be void,42 but on analysis the point does not seem to have been properly argued
39 See Kenward v Adams The Times, 28 November 1975; In re Simpson, decd (1977) 121 SJ 224, in both cases per Templeman J, and subsequently approved in Buckenham v Dickinson [2000] WTLR 1083, Hoff v Atherton [2005] WTLR 99, Cattermole v Prisk [2006] 1 FLR 693 and in Scammell v Farmer [2008] WTLR 1261, paras 117-123. 40 A joint BMI & Law Society publication (2010). 41 The point was recently considered by Christopher Nugee in Re Sutton [2010] WTLR 115. 42 Re Beaney 1978] 1 WLR 770; Re Morris, Special Trustees for Great Ormond Street Hospital for Children v Rushnin [2001] WTLR 1137 (D) 598; Willams v Williams [2003] WTLR 1371; Qutb v Hussain [2005] EWHC 157 (Ch).
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or resolved and in most of them it does not seem to have made any practical
difference.43
41. This debate is similar to the ongoing debate in cases on the ‘rule in Hastings-
Bass’ about the nature of an imperfect transaction executed by trustees.44 In this
context it has been suggested that although the transaction might be void rather
than voidable, it would still be open to the court to take general equitable
considerations into account when deciding whether to grant declaratory relief (on
the basis that a declaration is a discretionary remedy However, the suggestion
seems dubious next to the recent House of Lords case of Fisher v Brooker45
where the court held that once the claimant had been found entitled to a property
right it would be wrong to refuse him a declaration to that effect on the grounds
of laches and acquiescence.
42. Overall, the better view is probably that, where the donor lacks capacity, the
transaction is voidable, rather than void.46 If this were not the case, it would lead
to the anomaly that a person who had recovered their faculties could not affirm
their own transaction. To conclude that the transaction is voidable rather than
void also allows the court to take into account equitable defences whereas, if the
whole transaction were void, this would not be possible. Authoritative resolution
of these issues awaits a further decision.47
43. The primary remedy in such cases will be: (1) a declaration that the gift is invalid
(unless it serves some real purpose the court is unlikely to go further and declare
the gift void); and (2) an Order that the gift be set aside. Where the subject matter
of the gift is still in the hands of the original donee then (possibly subject to a
defence of change of position) the property should be repaid to the estate of the
donor (or any person validly claiming through or under it).
43 See Re Sutton [2010] WTLR 115. 44 It is probably a fair summary of the void/voidable debate in this area to say that, while the judges seems naturally drawn to the idea that the trustees’ decision is voidable, the weight of authority is that the decision is actually void. 45 [2009] 1 WLR 1764. 46 See Re Sutton [2010] WTLR 115. This is the position argued in Snell’s Equity (31st edn, 2005) at para 8-44. There is persuasive Australian authority to this effect: Gibbons v Wright (1954) 91 CLR 423; Craigo v McIntyre [1976] 1 NSWLR 729. 47 In this context it is useful to note: (1) that a gift by a minor is generally voidable rather than void; (2) there is some suggestion that the plea of non est factum might be available to a mentally incapacitated person – and the plea if successful certainly means that the deed is void rather than voidable; (3) a contract which is infected by incapacity is voidable rather than void, although only where the other party knows of the disability. This additional condition does not seem to have made its way into the law of gifts (despite Snell’s suggestion to the contrary, see fn 48 above). All these points will need to be considered when the void/voidable debate is resolved in relation to gifts.
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44. Things will, of course, be more complicated if the original donee has transferred
the property to a third party. Again, the first question will be whether the
claimant can assert a continuing interest in the property. This will depend upon
the substantive law of tracing. Where it is possible to assert a proprietary claim,
the remedy will be either the imposition of a constructive trust or an equitable lien
over the property.
45. The claimant will also need to consider whether any personal claims are available
at law (of a restitutionary nature, such as money had and received) or in equity
(dishonest assistance and/or unconscionable receipt).
Testamentary gifts
46. A will which is executed by a testator who lacks mental capacity on the part of the
testator is invalid. It will not be not be admitted to probate or, if probate has been
granted, the grant is liable to be revoked. If the estate has not been distributed the
position is, of course, much more straight-forward. However, if property has
been distributed on the footing of a will which is subsequently held to be invalid
the personal representatives will need to consider recovery of the property for the
estate.
47. In this regard it is important to note that the personal and proprietary remedies
available against the original recipient and any subsequent transferee of the
property may not only be available to the personal representatives of the testator,
but also to creditors and beneficiaries of the estate.
LUKE HARRIS
3 Stone Buildings
Tel: 020 7242 4937
DDI: 020 7692 2196
22 November 2010
CAPACITY:
INTER VIVOS AND TESTAMENTARY GIFTS
LUKE HARRIS
2
INTRODUCTION
1. The law of gifts is wide-ranging and complex. When examining the validity and
effect of an alleged gift it is necessary to consider a number of factors:
(1) The form of the gift and the relevant formalities for gifts of that kind.
The principle tripartite distinction is between: (1) gifts inter vivos, (2) gifts
mortis causa and (3) testamentary gifts. The formalities for the gift will in
part depend on which of type of gift is under consideration and in part
upon the type of property conveyed (i.e. personalty, land etc.).
(2) Issues of competence and capacity in relation to the donor and
donee. The essence of every gift is that there is both a giving and a taking
of property. It is therefore necessary that the donor should be competent
to give, and the donee competent to receive, the property in question.
(3) The consequences of any imperfection in the gift. Once any failure in
the transaction has been identified it is necessary to give careful
consideration to the precise consequences of the defect (is the whole
transaction void or merely voidable, what are the effects of third party
rights etc.). Different consequences may follow from different
imperfections.
2. This paper focuses upon issues of capacity as they relate to inter vivos and
testamentary gifts. It considers the test of capacity in relation to each type of gift
and the remedial consequences in cases where the donor or testator is shown to
lack capacity.
INTER VIVOS GIFTS
The general rule
3. Prima facie any person who is of full age and capacity can dispose of any property,
or any estate or interest in property, to which he is absolutely entitled. Legal and
equitable principles dictate that a person of full age and capacity acting freely,
fairly and with sufficient knowledge ought to be able to make a voluntary
disposition of any part of their property.1 A gift may be executed under a power
of attorney, provided the power is executed as a deed and authorises the gift.
1 The equitable doctrine of undue influence is, of course, directed at these issues. A gift will be impeached for undue influence where, in the eyes of equity, it is not an independent expression of the donor’s free will.
3
The Court of Protection
4. A gift by a person who, by reason of mental disorder, is incapable of managing
and administering his property and affairs, so that the management of his property
has been committed to the Court of Protection, is not be a valid gift. The
individual’s status as a patient of the Court of Protection means that he is disabled
from making a gift regardless of his de facto capacity to give at any particular time.2
The common law test of capacity
5. The locus classicus of the common law test for capacity to make a gift in respect of a
person who is not a patient of the Court of Protection is the judgment of Martin
Nourse QC in Re Beaney.3 His Lordship held that the mental capacity required
to make a gift is the capacity to understand the nature of the transaction when it is
explained to the donor;4 and the level of understanding required depends on the
circumstances of the transaction:
“The degree or extent of understanding required in respect of any instrument is relative to
the particular transaction which it is to effect. In the case of a will the degree is always
high. In the case of a contract, a deed made for consideration or a gift inter vivos,
whether by deed or otherwise, the degree required varies with the circumstances of the
transaction. Thus, at one extreme, if the subject matter and value of a gift are trivial in
relation to the donor’s other assets a low degree of understanding will suffice. But, at the
other extreme, if its effect is to dispose of the donor’s only asset of value and thus, for
practical purposes, to pre-empt the devolution of his estate under his will or his intestacy,
then the degree of understanding required is as high as that required for a will, and the
donor must understand the claims of all potential donees and the extent of the property
disposed of.”
6. The test has been applied many times since. Recent examples are: Re Morris,
Special Trustees for Great Ormond Street Hospital for Children v Rushnin
(2001)5 Willams v Williams (2003);6 Qutb v Hussain (2005),7 Re Sutton
(2009)8 and Gorjat v Gorjat.9
2 Re Walker [1905] 1 Ch 160. 3 1978] 1 WLR 770. 4 Citing with approval the decision of the High Court of Australia in Gibbons v Wright (1954) 91 CLR 423. 5 [2001] WTLR 1137 (D) 598. 6 [2003] WTLR 1371. 7 [2005] EWHC 157 (Ch). 8 [2010] WTLR 115. 9 13 ITELR 312.
4
7. Where the donor has formed an intention at the outset to make a series of gifts
which he effects over a relatively short period, it is appropriate to consider the
course of conduct as a whole.10 The thought underlying this proposition is that if
the test in Re Beaney11 is applied to each gift in isolation it would become
progressively more difficult to satisfy. Each successive gift would require a higher
degree of understanding than the last because the later gifts in the sequence would
have a greater significance in the sense of representing a greater proportion of the
donor’s remaining assets.
8. The test in relation to testamentary capacity has recently been expanded to take
into account not only the testator’s ability to understand the various matters
required of him by the Banks v Goodfellow test, but also his decision-making
powers. By parity of reasoning, it is strongly arguable that the common law test in
relation to inter vivos gifts should also be construed in this more expansive manner.
Time of assessment
9. The relevant time for the assessment of capacity is at the time the gift was made.
Burden of proof at common law
10. The legal burden of proving lack of mental capacity lies on the person alleging it.
In other words, every adult is presumed to have mental capacity until the reverse
is proved.
11. Incidentally, it is worth noting that, although the issue under consideration here is
the burden of proof in relation to the issue of capacity, there also said to be an old
rule that a gift alleged to have been made by a deceased donor cannot be
established without some corroboration. Nowadays, it seems that there is no
longer a hard and fast rule that the evidence of the alleged donee must be
disbelieved unless corroborated although the court will examine that evidence
with great care, if not suspicion.
12. If the claimant establishes a prima facie case of lack of capacity that the evidential
burden will shift from the claimant to the defendant.12 To shift the evidential
burden it is not sufficient for the claimant simply to call into question capacity
10 Gorjat v Gorjat 13 ITELR 312, para 136. 11 [1978] 1 WLR 770. 12 Williams v Williams [2003] WTLR 1371, 1384; Gorjat v Gorjat 13 ITELR 312, para 139.
5
generally: he must make out a case that the donor lacked capacity to a sufficient
degree to call into question the validity of the transaction under consideration.13
13. Once the evidential burden has shifted it will then be for the defendant to prove
capacity.14
Effect of the Mental Capacity Act 2005
14. The Mental Capacity Act 2005 (“the Act”), ss.1-4, came into force on 1 April
2007.15
“1. The Principles
(1) The following principles apply for the purposes of this Act.
(2) A person must be assumed to have capacity unless it is established that he
lacks capacity.....
2. People who lack capacity
(1) For the purposes of this Act, a person lacks capacity in relation to a matter
if at the material time he is unable to make a decision for himself in relation
to the matter because of an impairment of, or a disturbance in the functioning
of, the mind or brain....
3. Inability to make decisions
(1) For the purposes of section 2, a person is unable to make a decision for
himself if he is unable:
(a) to understand the information relevant to the decision;
(b) to retain that information;
(c) to use or weigh that information as part of the process of making the
decision; and
13 Gorjat v Gorjat 13 ITELR 312, para 140. 14 The position is similar to with cases of undue influence. The legal burden of proving undue influence rests with the party alleging it. However, in cases of ‘presumed undue influence’ proof by the claimant of (1) a relationship of trust and confidence, and (2) a transaction which calls for explanation will have the effect of shifting the evidential burden to the defendant to rebut the undue influence which is presumed or inferred in such cases. See the analysis of Lord Nicholls in Royal Bank of Scotland v Etridge (No.2) [2002] 2 AC 773 at paras 13 and 14. 15 SI 2007/563. The rest of the Act came into force on 1 October 2007: SI 2007/1897.
6
(d) to communicate his decision (whether by talking, using sign language
or any other means).
(2) A person is not to be regarded as unable to understand the information
relevant to a decision if he is able to understand an explanation of it given to
him in a way that is appropriate to his circumstances.
(3) The fact that a person is able to retain the information relevant to a decision
for a short period only does not prevent him from being regarded as able to
make the decision.
(4) The information relevant to a decision includes information about the
reasonable foreseeable consequences of-
(a) deciding one way or another; or
(b) failing to make the decision.”
15. The Act is supplemented by a Code of Practice made under it (“the Code”).
16. The statutory test of capacity is therefore a two-stage test. A person lacks capacity
if:
(1) they have an impairment or disturbance that affects the way in which the
brain or mind works; and
(2) the impairment or disturbance means that they are unable to make a
specific decision at the time it needs to be made.
17. The question arises what effect, if any, the statutory definition in the Act, and the
Code, has on the old common law test of capacity. The position is rather
confusing. At the time of writing no reported case has settled this issue. Most of
the commentary in the cases has been about the relationship between the Act and
the old common law test of testamentary (rather than inter vivos) capacity. Here,
the position appears to be as follows:
(1) There is some doubt about whether the statutory definition of capacity has
any relevance to wills made outside of the statutory jurisdiction, i.e. as
whether ‘the purposes of the Act’ (s.1) includes making a will outside of
7
this jurisdiction.16 Some passages of the Code suggest not. Paragraphs
4.41-33 provide:
“What other legal tests of capacity are there?
4.31. The Act makes clear that the definition of ‘lack of capacity’ and the two
stage test for capacity set out in the Act are ‘for the purposes of this Act’. This
means that the definition and test are to be used in situations covered by this
Act. Schedule 6 of the Act also amends existing laws to ensure that the
definition and test are used in other areas not directly covered by this Act…
4.32. There are several tests of capacity that have been produced following
judgments in court cases (known as common law tests). These cover:
• capacity to make a will
• capacity to make a gift
• capacity to enter into a contract
• capacity to litigate (take part in legal cases), and
• capacity to enter into marriage.
4.33. The Act’s new definition of capacity is in line with the existing common
law tests, and the Act does not replace them. When cases come before the court
on the above issues, judges can adopt the new definition if they think it is
appropriate. The Act will apply to all other cases relating to financial,
healthcare or welfare decisions.”
(2) Notwithstanding this, the better view is that the statutory test probably
does apply to wills. 17 However, to avoid giving the Act a retrospective
effect, the definition should only be applied to wills made after the date
when ss.1-4 came into force, namely 1 April 2007. As regards will made
before that date, the common law test continues to apply.18
16 Scammell v Farmer [2008] WTLR 126 at [26]. 17 This is the view adopted by ‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010), para 6.3. This is a joint BMI and Law Society publication. In Re Gale [2010] EWHC 1575 (Ch) Jules Sher QC said that the common law test of testamentary capacity “has not been displaced as the applicable test in this area by the Mental Capacity Act 2005, at least in relation to testamentary instruments which ante-date the coming into force of that Act”. However, the Court of Appeal did not address the point in Perrins v Holland [2010] WTLR 1415. 18 Scammell v Farmer [2008] WTLR 1261 at para [27] – [30]. It is not clear from this passage whether the judge thought that the critical event to bring the test into play was when the will was made, when the death occurred or
8
(3) In any case, the statutory test is probably a modern restatement of the
traditional test for testamentary capacity (considered below), namely that
propounded in Banks v Goodfellow.19
18. Turning back to inter vivos gifts, it is suggested that the position is the same.
Consequently, as regards gifts made prior to 1 April 2007, the common law test
applies but, thereafter, the Act is engaged.
19. At the time of writing there is no reported case authoritatively dealing with the
effect of the Act on the common law test of capacity for inter vivos gifts. However,
the correct view seems to be the Act supersedes the common law and introduces
a new, statutory test of capacity in respect of gifts made after 1 April 2007.20
Comparison between common law and the Act
20. On the assumption that there are two tests of capacity in play depending upon the
timing of the gift in issue, the next question is what, if anything, is the difference
between them. Two points call for comment:
(1) First, the Act contains a statutory presumption of capacity (s.1(2)). As
noted above, this was the position at common law in any event.21 The
question might then be posed whether the new statutory presumption
alters the law as regards evidential burdens set out above. It is submitted
that it probably does not.
(2) Second, it is arguable that the Act has introduced a different substantive
test for capacity in relation to inter vivos gifts. Although the Code
comments (para 4.33.) that the statutory definition of incapacity is “in line
with the existing common law tests, and… does not replace them” it is difficult to
make sense of this comment. Given that the test for inter vivos capacity is
different from the test of testamentary capacity, it is hard to see in what
when the claim was issued. The correct view would seem to be when the will was made: see further Re Key [2010] 1 WLR 220 at para [94]. 19 (1870) 5 QB 549. 20 Again, this is the view endorsed by ‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010), para 7.3 a joint BMI and Law Society publication. The suggestion that the new test will apply in respect of transactions which post-date the coming into force of the Act is based upon an analogy with the test for testamentary capacity and makes reference to Scammell v Farmer [2008] WTLR 1261. In the recent case of Gorjat v Gorjat 13 ITELR 312 Sarah Asplin QC commented: “Lack of mental capacity is now dealt with at ss 2 and 3 of the Mental Capacity Act” implying that her Ladyship thought that the Act had superseded the common law. However, following Scammell v Farmer she declined to apply the Act to the inter vivos gift in question on the ground that the gift pre-dated the legislation. 21 In Gorjat v Gorjat 13 ITELR 312 Sarah Asplin QC observed that (para 139) that s.1(2) put the presumption of capacity “on a statutory footing”.
9
sense the statutory definition can be “in line with” both. In particular, the
emphasis at common law in relation to inter vivos gifts has traditionally been
on comprehension rather than decision-making22 whereas the statutory test
is fundamentally directed at decision-making.
TESTAMENTARY GIFTS
The common law test of capacity
21. The test of testamentary capacity at common law is set out in the well known
judgment of Cockburn CJ in Banks v Goodfellow:23
“It is essential to the exercise of such power that a testator shall understand the nature of
the acts and its effects; shall understand the extent of the property of which he is
disposing; shall be able to comprehend and appreciate the claims to which he ought to give
effect; and, with a view to the latter object, that no disorder of the mind shall poison his
affections, pervert his sense of right, or prevent the exercise of his natural faculties – that
no insane delusion shall influence his will in disposing of his property and bring about a
disposal of it which, if the mind had been sound, would not have been made.”
22. Recently, the courts have confirmed that the test in Banks v Goodfellow24 has
stood the test of time and does not need to be reformulated in modern language.25
The test thus stated can be broken down into four individual issues, each of which
must be satisfied separately.26 The requirements of capacity are:
(1) that the testator shall understand the nature of the act and its effects;
(2) that the testator shall understand the extent of the property of which he is
disposing;
(3) that the testator shall be able to comprehend and appreciate the claims to
which he ought to give effect and, with a view to the latter object;
(4) that no disorder of the mind shall poison the testator’s affections, or
prevent the exercise of his natural faculties – that no insane delusion shall
22 Although see para 8 above. 23 (1870) LR 5 QR 549, 565. 24 (1870) LR 5 QR 549, 565. 25 Sharp v Adams [2006] WTLR 1059, at paras [66] & [82] 26 Kostic v Chaplin EWHC 2298 (Ch) at para 197. Following the approach in Sharp v Adams [2006] WTLR 1059.
10
influence his will in disposing of his property and bring about a disposal of
it which, if the mind had been sound, would not have been made.27
23. The most recent case to consider the Banks v Goodfellow test is Re Key.28 In
that case Briggs J arguably developed the test to focus more on the testator’s
decision-making capacity, rather than his ability to comprehend, than had
previously been the case. He said:
“This is not one of those cases in which it is possible to point simply to a conspicuous
inability of the deceased to satisfy one of the distinct limbs of the Banks v
Goodfellow test. Rather it is a case in which I have been persuaded, taking the evidence
as a whole, that Mr. Key was simply unable during the week following his wife's death
to exercise the decision-making powers required of a testator. In any event, the defendants
have not discharged the burden of proving that he was. To the extent that such a
conclusion involves a slight development of the Banks v Goodfellow test, taking into
account decision-making powers rather than just comprehension, I consider that it is
necessitated by the greater understanding of the mind now available from modern
psychiatric medicine, in particular in relation to affective disorder.”
Time of assessment
24. The time for assessing capacity is both at the time when instructions for the will
are given and at the time of its execution.29 However, where it is shown that the
testator had testamentary capacity at the time when he gave his instructions it will
be sufficient if, at the time of execution, the testator appreciates that he is being
asked to execute as his will a document drawn up in accordance with his
instructions even though the testator may not be able to follow all the
provisions.30
Burden of proof at common law
25. There is a presumption at common law that the testator had testamentary capacity
at the time when he made his will. A will which is not on its face irrational, and
which is duly executed, will be admitted to probate without proof of competence.
27 In Kostic v Chaplin EWHC 2298 (Ch) it was suggested in argument that issue (4) was in fact a sub-element of issue (3). Henderson J rejected the submission (at para 198). 28 [2010] 1 WLR 220. 29 Wellesley v Vere (1841) 2 Curt 917. 30 This is the rule in Parker v Felgate (1883) 8 PD 171. The rule was recently applied by Lewison J in Perrins v Holland [2009] EWHC 1945 (Ch), approved by the Court of Appeal [2010] WTLR 1415.
11
However, if the testator’s capacity it is put in issue, it is for the party propounding
the will to prove that the testator was competent to make it.
26. In terms of discharging this burden, the law presumes that a state of affairs shown
to exist continues to exist until the contrary is proved. So, where there is no
suggestion that the testator lacked capacity, the testator will be presumed to have
remained competent at the time he made his will.31
27. Conversely, if the evidence shows that the testator lacked capacity at some earlier
point in time it will be for the person propounding the will to prove competence
at the relevant time.32 However, the strength of the presumption against capacity
will depend upon other circumstances. Thus, if the will contains dispositions
which are prima facie not such that an ordinary testator would make, the
presumption will be harder to overcome but where they are such as a sane testator
would make, and more so, if the testator drew the will himself, the presumption is
weaker.
Lucid intervals
28. Where the testator is shown to lack capacity before the execution of the will, the
party propounding the will must prove a lucid interval: it is not necessary to prove
full mental recovery.33
Effect of the Act and comparison with the common law
29. The interface between the common law test of testamentary capacity and the new
statutory test under the Act has been considered above.34 As already noted, the
emergent view seems to be that the statutory test of capacity is a “modern restatement
of the test propounded in Banks v Goodfellow”,35 so the Act does not seem to have made
a substantive change to the actual test of capacity.36
30. However, one important point of difference between the Act and the common
law is the burden of proof. The common law principle, which places the burden
31 Chambers and Yatman v Queen’s Proctor (1840) 2 Curt 415. 32 Banks v Goodfellow (1870) LR 5 QB 549. 33 For an example of a case where the party propounding the will failed to establish a lucid interval see Richards v Allan [2001] WTLR 1031. 34 See paragraph 17 above. 35 Scammell v Farmer [2008] WTLR 126 at [24]. 36 It might actually be questioned whether this is actually so. Traditionally, the test in Banks v Goodfellow (1870) LR 5 QB 549 is focused upon the testator’s ability to comprehend, rather than his ability to take decisions. However, in light of the recent decision in Re Key [2010] 1 WLR 220, the common law might have developed in such a way since Scammell v Farmer [2008] WTLR 126 as to retrospectively justify this view: see para 23 above.
12
of proving capacity upon the person propounding the will, cannot be reconciled
with the statutory presumption of capacity in s.1(2) of the Act.
31. It is therefore submitted that the Act has changed the law in this regard and that
the principle that now applies is the same as the common law burden of proving
capacity for inter vivos gifts (which does conform to the Act).37
EVIDENCE
Inter vivos gifts
32. The principles which apply to the admissibility of evidence of capacity in the wills
cases are more clearly developed. It is submitted that the same principles apply,
mutatis mutandis, in relation to inter vivos gifts.
Testamentary gifts
33. The following principles are drawn from the law of testamentary gifts.38
(1) Both oral and documentary evidence is admissible to show that the testator
was of sound disposing mind at the relevant time.
(2) Statements made by the testator when he made his will, or in preparation
for its production, are admissible to prove that the testator knew the
character of what he was doing.
(3) The fact that the will is in the testator’s own writing is a strong indication
of capacity.
(4) Evidence of an attesting witness to the effect that the testator lacked
capacity is admissible but requires corroboration because is necessarily
impeaches the witnesses own act of attestation.
(5) Evidence as to the manner in which the will was made is admissible.
(6) Evidence is admissible to show that the will accords with the testator’s
natural affection and moral duty and also that it conforms to the testator’s
past and subsequent declarations of intent.
(7) Evidence of the testator’s general habits and course of life is admissible.
37 See paras 20(2) above. 38 See generally Williams on Wills (2002) at para 4.20.
13
(8) Evidence of the testator’s conduct before and after making the will is
admissible.
(9) The treatment of the testator by his friends and relations is admissible as
for or against them.
34. The following evidence is seemingly not admissible in relation to testamentary
gifts:
(1) Evidence that unsoundness of mind exists or has existed in the testator’s
family.
(2) Evidence that the testator had a general reputation as suffering from
unsoundness of mind.
Medical evidence
35. Medical evidence will normally consist of:
(1) The donor’s or testator’s medical records (GP records and records of any
specialists who have seen him).
(2) Expert evidence produced by an independent expert, who is instructed to
give his opinion on the donor’s or testator’s medical records. Obviously, if
the donor is alive, the expert may be able to supplement this material by
assessing the donor himself.
36. It is important to distinguish between factual evidence given by medical
practitioners who have experience of the donor or testator and evidence by way of
expert opinion.
(1) Medical evidence obviously carries great sway with the court. The
evidence of any expert who has attended the donor or testator is
admissible but the witness cannot be asked to give his opinion about facts
which he has not observed himself.
(2) It is also important not to fall into the trap of thinking that expert evidence
will be decisive. The precise weight afforded to the expert will vary
according to the facts of the case. In some cases expert evidence has been
outweighed by the factual evidence of witnesses who had the opportunity
of assessing the donor’s or testator’s capacity based upon their own
14
observations and experience. The court will be wary of placing too much
reliance on the evidence of medical experts who did not have the
opportunity of seeing the deceased.
The golden rule – wills
37. Any solicitor who is instructed to prepare a will must have ‘the golden rule’ at the
front of his mind. The substance of the golden rule is that when a solicitor is
instructed to prepare a will for an aged testator, or for one who has been seriously
ill, he should arrange for a medical practitioner first to satisfy himself as to the
capacity and understanding of the testator, and to make a contemporaneous
record of his examination and findings.39
38. Compliance with the golden rule does not operate as a touchstone of the validity
of a will, nor does non-compliance demonstrate its invalidity. Its purpose is to
assist in the avoidance of disputes, or at least to minimise their scope.
39. Any solicitor taking instructions for the preparation of a will should also consult
‘Assessment of Mental Capacity, a Practical Guide to Doctors and Lawyers’ (2010)40 and the
Solicitors’ Code of Conduct 2007, Guidance Notes to rule 2.01, para 6(a)(iii)
(‘Taking on Clients’).
CONSEQUENCES AND REMEDIES
Gifts inter vivos
40. Where an inter vivos gift is infected by lack of capacity the question arises as to
whether the gift is void or voidable.41 On either footing, the gift will be ‘invalid’
and is liable to be set aside. This being the case, the precise status of the
impugned transaction is arguably irrelevant although from time to time it is argued
that the void/voidable distinction may have some significance for tax purposes.
There are authorities (including Re Beaney itself) in which the gift has been held
to be void,42 but on analysis the point does not seem to have been properly argued
39 See Kenward v Adams The Times, 28 November 1975; In re Simpson, decd (1977) 121 SJ 224, in both cases per Templeman J, and subsequently approved in Buckenham v Dickinson [2000] WTLR 1083, Hoff v Atherton [2005] WTLR 99, Cattermole v Prisk [2006] 1 FLR 693 and in Scammell v Farmer [2008] WTLR 1261, paras 117-123. 40 A joint BMI & Law Society publication (2010). 41 The point was recently considered by Christopher Nugee in Re Sutton [2010] WTLR 115. 42 Re Beaney 1978] 1 WLR 770; Re Morris, Special Trustees for Great Ormond Street Hospital for Children v Rushnin [2001] WTLR 1137 (D) 598; Willams v Williams [2003] WTLR 1371; Qutb v Hussain [2005] EWHC 157 (Ch).
15
or resolved and in most of them it does not seem to have made any practical
difference.43
41. This debate is similar to the ongoing debate in cases on the ‘rule in Hastings-
Bass’ about the nature of an imperfect transaction executed by trustees.44 In this
context it has been suggested that although the transaction might be void rather
than voidable, it would still be open to the court to take general equitable
considerations into account when deciding whether to grant declaratory relief (on
the basis that a declaration is a discretionary remedy However, the suggestion
seems dubious next to the recent House of Lords case of Fisher v Brooker45
where the court held that once the claimant had been found entitled to a property
right it would be wrong to refuse him a declaration to that effect on the grounds
of laches and acquiescence.
42. Overall, the better view is probably that, where the donor lacks capacity, the
transaction is voidable, rather than void.46 If this were not the case, it would lead
to the anomaly that a person who had recovered their faculties could not affirm
their own transaction. To conclude that the transaction is voidable rather than
void also allows the court to take into account equitable defences whereas, if the
whole transaction were void, this would not be possible. Authoritative resolution
of these issues awaits a further decision.47
43. The primary remedy in such cases will be: (1) a declaration that the gift is invalid
(unless it serves some real purpose the court is unlikely to go further and declare
the gift void); and (2) an Order that the gift be set aside. Where the subject matter
of the gift is still in the hands of the original donee then (possibly subject to a
defence of change of position) the property should be repaid to the estate of the
donor (or any person validly claiming through or under it).
43 See Re Sutton [2010] WTLR 115. 44 It is probably a fair summary of the void/voidable debate in this area to say that, while the judges seems naturally drawn to the idea that the trustees’ decision is voidable, the weight of authority is that the decision is actually void. 45 [2009] 1 WLR 1764. 46 See Re Sutton [2010] WTLR 115. This is the position argued in Snell’s Equity (31st edn, 2005) at para 8-44. There is persuasive Australian authority to this effect: Gibbons v Wright (1954) 91 CLR 423; Craigo v McIntyre [1976] 1 NSWLR 729. 47 In this context it is useful to note: (1) that a gift by a minor is generally voidable rather than void; (2) there is some suggestion that the plea of non est factum might be available to a mentally incapacitated person – and the plea if successful certainly means that the deed is void rather than voidable; (3) a contract which is infected by incapacity is voidable rather than void, although only where the other party knows of the disability. This additional condition does not seem to have made its way into the law of gifts (despite Snell’s suggestion to the contrary, see fn 48 above). All these points will need to be considered when the void/voidable debate is resolved in relation to gifts.
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44. Things will, of course, be more complicated if the original donee has transferred
the property to a third party. Again, the first question will be whether the
claimant can assert a continuing interest in the property. This will depend upon
the substantive law of tracing. Where it is possible to assert a proprietary claim,
the remedy will be either the imposition of a constructive trust or an equitable lien
over the property.
45. The claimant will also need to consider whether any personal claims are available
at law (of a restitutionary nature, such as money had and received) or in equity
(dishonest assistance and/or unconscionable receipt).
Testamentary gifts
46. A will which is executed by a testator who lacks mental capacity on the part of the
testator is invalid. It will not be not be admitted to probate or, if probate has been
granted, the grant is liable to be revoked. If the estate has not been distributed the
position is, of course, much more straight-forward. However, if property has
been distributed on the footing of a will which is subsequently held to be invalid
the personal representatives will need to consider recovery of the property for the
estate.
47. In this regard it is important to note that the personal and proprietary remedies
available against the original recipient and any subsequent transferee of the
property may not only be available to the personal representatives of the testator,
but also to creditors and beneficiaries of the estate.
LUKE HARRIS
3 Stone Buildings
Tel: 020 7242 4937
DDI: 020 7692 2196
22 November 2010
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CAPACITY AND CAPACITY ASSESSMENT IN ONTARIO1 Judith Wahl Barrister and Solicitor Advocacy Centre for the Elderly 2 Carlton Street, Suite 701 Toronto, Ontario M5B 1J3 Tel: 416-598-2656 Fax: 416-598-7924 Email – [email protected] Website: www.advocacycentreelderly.org Introduction - Older Clients and Capacity A common theme in the client work at the Advocacy Centre for the Elderly2, an Ontario community legal clinic, is that of decisional capacity. Capacity may not always be the primary legal issue in the client case, such as in a guardianship application or a hearing to review a finding of incapacity before the Consent and Capacity Board, but often the capacity of an older client to make decisions is questioned by someone as part of the problem or conflict on which the client is seeking help. Some clients of ACE have asked us if they can make a particular decision or whether they need to “consult” or get authority from a son or daughter to do something, particularly if they have given that son or daughter a Power of Attorney. Although the older client is mentally capable, he or she reports that others question his or her authority to act independently. In some instances, the client has been told that his or her son or daughter is the decision maker, not him or herself. The family member directs the service provider when in fact the capable client should have been the one the service provider turned to for authorization or consent.
1 This paper is a “work in progress” prepared for the CBA Elderlaw Programme for March 24-25, 2006 in Ottawa, Ontario. Due to time limitations (present work overload!), it was not possible to complete the paper to the degree desired. However the intent of the writer is to develop this first draft publication into a comprehensive publication on capacity issues. Comments on this first draft would be very welcome and should be sent to [email protected]. Comments can be critiques as well as suggestions of issues that should be explored in the paper. I am particularly interested in knowing what practice issues related to capacity would be useful to include in the paper. Anyone interested in the final paper should contact the writer in August 2006 or thereafter for a copy. 2 The Advocacy Centre for the Elderly is one of 79 community legal clinics in the Province of Ontario. Funded by Legal Aid Ontario, ACE has the mandate to provide legal services to low income seniors. The legal services include client services, - both advice and representation before courts and tribunals at any level; public legal education - by means of the production of written materials and the presentation of education sessions and workshops; law reform activities, such as submissions to government at the local, provincial and federal levels on proposed legislation, existing policies and practices as well as participation in government advisory committees and consultations; and community development – engaging in activities to assist communities to better respond to legal issues that impact on seniors, such as elder abuse. ACE has been in operation since 1984 and is a unique legal service in Canada. See www.advocacycentreelderly.org for more details.
2
Just because a person has passed some magic age that now places them in the category of “senior” or “older adult”, it doesn’t mean that that person has lost decisional capacity or that his or her capacity should necessarily be put in question. This approach is ageist and based on a wrong assumption. The vast majority of older adults retain decisional capacity and the right to make decision about their own lives, even when their physical abilities may have declined or they become frail and in need of assistance with activities of daily living.3 In our legal practice at ACE, we have observed lawyers, acting on these wrong assumptions about capacity, asking older clients to obtain capacity assessments of some type, before those lawyers will act for the client in the preparation of a will or power of attorney, or act for them in litigation or in other legal matters. Unfortunately, some of these “assessments” are ultimately meaningless as there is no specific context for the assessment. Mental capacity is always measured in a context, in relation to a particular decision. An assessment that states that the person is “globally capable” or simply “incapable” doesn’t mean much and doesn’t help the lawyer determine if the client is capable to instruct for a particular task on which the lawyer is being retained. We have also been told by lawyers that they may do a version of the Mini Mental Status Exam (MMSE) on their older clients before being retained. This does not make sense for a number of reasons. The MMSE is not a test of decisional capacity in the legal context. The MMSE is a short screening test that is designed to evaluate basic mental function in a number of areas such as orientation, ability to recall facts, ability to write and to calculate numbers.4 However this clinical test does not shed much light on capacity to instruct in a motor vehicle case or to prepare a power of attorney for property. The results of that test may not identify if a client has the “ability to understand “and the “ability to appreciate” information relevant to making a decision. This ability to understand and ability to appreciate is the legal test of capacity in Ontario, Some persons with high scores may lack capacity to instruct on particular issues. It should not be presumed that a high score equates with capacity or lack of impaired cognitive function. The reverse may also be true, that a person a low score, may have capacity to instruct on the particular legal issue. Even from the clinical perspective, this test has some identified “flaws”. Persons that have higher education usually score higher on the test even if they have some cognitive impairment. That test also does not reliably measure executive function or insight, an element of the “ability to appreciate” side of the legal test of capacity. Literature describing this common test and critiquing it may be found in various journals and publications. 3 Specialists in Gerontology that have provided information to the writer on this issue include Gail Elliott of McMaster University and Michael Stones of Lakehead University. Both, as well as others, have said in presentations and discussions that only 6-8% of older adults (over 65) lack decisional capacity. 4 The test provides a quick way to determine if more in-depth testing is needed. The next draft of the paper will include an analysis of the MMSE and what the results from the test demonstrates, including information from literature commenting on the test and other clinical tests of cognition that are used by health professionals.
3
Lawyers are not ordinarily trained in this test or in interpreting its results appropriately. Had the drafters of the Ontario capacity legislation – the Substitute Decisions Act and the Health Care Consent Act – and the legislators decided that the MMSE would be the standardized test used to determine decisional capacity, the legislation would have reflected that. In fact, extensive discussions were held at the meetings of the Fram Committee about whether there was a specific gold standard “test” of capacity. The Fram Committee, more properly known as the Attorney-General’s Advisory Committee on Substitute Decision Making for Mentally Incapable Persons5 prepared the report that resulted in the present Ontario legislation. With input from many sectors, including health professionals, the legal community, and the advocacy community, it was determined that there was no such gold standard test or clinical test that appropriately and reliably measured mental capacity, therefore no such test was included as the standard in the legislation. Although this legislation was drafted and proclaimed over ten years ago, it is still believed that no such gold standard test yet exists. In some cases, third party assessments of capacity are appropriate as evidence in a proceeding, or as evidence to be kept on the lawyer’s file as a “defense” assessment in the event someone challenges the validity of a will or Power of Attorney. However in other instances the request for the assessment is not appropriate because capacity is not at issue in the case and the client is capable to instruct on the matter on which they seek assistance. It is the lawyer’s obligation to determine any client’s capacity to instruct before being retained.6 There are some exceptions to this rule, such as when retained by a client who
5 The Attorney-General’s Advisory Committee for Substitute Decision Making for Mentally Incapable Persons, commonly known as the Fram Committee in honour of its Chair, Stephen Fram, Senior Policy Lawyer at the Ontario Ministry of the Attorney General, was set up in 1984 with the mandate to review the law related to mental capacity and substitute decision making for mentally incapable adults and to make recommendations for reform of this law. The Committee was composed of representatives from a variety of organizations and professions and Ministries, including health professionals, advocacy organizations, and other professional organizations ie Canadian Bar Association Ontario (as it then was). Jim McDonald, for the period in 1984, and then Judith Wahl from 1985 to the dissolution of the Committee, represented the seniors’ advocacy community, along with Ivy St. Lawrence, a seniors’ activist. The Committee released its report and recommendations in 1988. Legislation was drafted and introduced in 1992 (Substitute Decisions Act, Consent to Treatment Act, and Advocacy Act) and proclaimed in 1995. The Consent to Treatment Act and Advocacy Act were repealed in 1996 and the Health Care Consent Act was introduced and passed that same year. The Health Care Consent Act was substantially the same as the Consent to Treatment Act with two notable exceptions. All reference to the role of advocates was removed from the legislation and fundamental changes were made to the rights advice processes. The Substitute Decisions Act amendments were also primarily related to removing the role of advocates that had been created under the Advocacy Act that was repealed 6 Law Society of Upper Canada- Rules of Professional Conduct Client Under a Disability 2.02 (6) When a client's ability to make decisions is impaired because of minority, mental disability, or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal lawyer and client relationship.
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challenges a finding of incapacity in a Consent and Capacity Hearing. In any proceedings under the Substitute Decisions Act and Health Care Consent Act where capacity is at issue, the lawyer may presume capacity of the client to instruct. This is practical as capacity is the issue. 7 Acting for a client in these circumstances in a proceeding under the Substitute Decisions Act or Health Care Consent Act does poses challenges for the lawyer. The lawyer is obligated to maintain a professional relationship with that client and advocate for the client. This means not falling into a “best interests” type of representation. The lawyer has to be careful not to make a judgment of the client’s best interests and to fail to take directions from the client if the lawyer believes that the client is incapable or is acting against his or her best interests, despite this direction to presume capacity in the statute. In Banton v. Banton et al.8 the court stated:
The position of lawyers retained to represent a client whose capacity is an issue in proceedings under the Substitute Decisions Act, 1992 is potentially one of considerable difficulty. Even in cases where the client is deemed to have capacity to retain and instruct counsel pursuant to section 3 (1) of the Act, I do not believe that counsel is in the position of a litigation guardian with authority to make decisions in the client’s interests. Counsel must take instructions from the client and must not, in my view, act as if satisfied that capacity to give instructions is lacking. A very high degree of professionalism may be required in borderline cases where it is possible that the client’s wishes may be in conflict with his or her best interests and counsel’s duties to the Court.
Commentary
Commentary - A lawyer and client relationship presupposes that the client has the requisite mental ability to make decisions about his or her legal affairs and to give the lawyer instructions. A client's ability to make decisions, however, depends on such factors as his or her age, intelligence, experience, and mental and physical health, and on the advice, guidance, and support of others. Further, a client's ability to make decisions may change, for better or worse, over time. When a client is or comes to be under a disability that impairs his or her ability to make decisions, the impairment may be minor or it might prevent the client from having the legal capacity to give instructions or to enter into binding legal relationships. Recognizing these factors, the purpose of this rule is to direct a lawyer with a client under a disability to maintain, as far as reasonably possible, a normal lawyer and client relationship
A lawyer with a client under a disability should appreciate that if the disability of the client is such that the client no longer has the legal capacity to manage his or her legal affairs, then the lawyer may need to take steps to have a lawfully authorized representative appointed, for example, a litigation guardian, or to obtain the assistance of the Office of the Public Guardian and Trustee or the Office of the Children's Lawyer to protect the interests of the client. In any event, the lawyer has an ethical obligation to ensure that the client's interests are not abandoned.
7 Substitute Decisions Act, s. 3; Health Care Consent Act , s. 81 8 Banton v. Banton (1998), 164 D.L.R. (4th) 176
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This obligation to determine capacity to instruct is not limited to only older clients but applies to all clients. Older clients should not be the only ones targeted for additional scrutiny of capacity. For the purpose of good practice, it is important that lawyers first meet with clients and make their own determination of capacity of the client to instruct before seeking some form of assessment. Lawyers should specifically look at the capacity of the client to “make decisions about his or her legal affairs” as described in the Rules of Professional Conduct. This capacity may be different for giving instructions about a complex business transaction as opposed to asking the lawyer to advocate about his or her rights to have visitors or to take a temporary leave from a long term care home in which he or she resides. By seeking out an assessment first before making his or her own determination of capacity to instruct, the lawyer assumes that a health professional or some other person from whom he seeks the assessment is more knowledgeable than him or her about capacity to instruct on the particular matter on which the client wants help. This is ironic considering that the capacity that we are talking about is not a clinical assessment but is a legal determination based on legal definitions of capacity. “Clinical assessments underlie diagnosis, treatment recommendations and identify or mobilize social supports. Legal assessments remove from that person the right to make autonomous decisions in specified areas.”9 10 It is also unlikely that the health professional knows the specific legal criteria for capacity for that particular purpose unless the lawyer details the definition of the decisional capacity before seeking the assessment. A report that a client “lacks testamentary capacity” or “has testamentary capacity” is not going to be helpful to the lawyer if the physician that did this assessment did not know the statutory definition of capacity or criteria from the case law about the specific type of capacity. This is exactly where the opposing party in the action challenging the will document should attack the assessment—cross-examining the physician on what is his or her understanding of testamentary capacity. If the physician does not know the tests of capacity in the legal context, the report should not be given much weight. Likewise a report that states that the client “is capable for all purposes” is of little assistance when the lawyer needs to take instructions for litigation. There is questionable value added from these types of assessments to the lawyer’s own determination of capacity to instruct based on his or her own exchange with the client about the case to be pursued.
9 Dr. Janet Munson and Dr Carole Cohen in materials used for training of Capacity Assessors as defined under the Substitute Decisions Act, 1992, S.O., 1992, c.30 10 The role of a health professional in Capacity assessment will be explored and expanded in the future paper as health professionals do have a role in this process, if not to address capacity to instruct, but to present relevant evidence that is useful in the determination of capacity. Health Professionals may also act as “capacity assessors” and “evaluators” as defined in the legislation, but in that capacity they are doing legal assessment, not clinical assessments of capacity. This is discussed later in this paper. One of the problems is the use of language about capacity. Lawyers and health professionals use this same terminology but may mean different things and use the language in different ways. This also will be explored in the later draft of this paper.
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If a third party assessment is needed as evidence in a proceeding, or if it is appropriate to obtain a “defense” assessment for the benefit of the client in the event that capacity to instruct or to prepare a particular instrument such as a power of attorney or a will, may be challenged, then what should lawyers be doing to ensure a proper and fair assessment, appropriate to the need, is done? If capacity is at issue in a proceeding, how can a lawyer “assess the assessment” - either the one he or she obtained for the client or assessments submitted as evidence by the opposite side in the action? The only way a lawyer is going to be able to do this, is if the lawyer understands the applicable law on capacity. This may seem obvious yet, our experience in Ontario is that there remains a learning curve for many lawyers, as well as health professionals and service providers dealing with seniors in respect to capacity issues. Although the Substitute Decisions Act and the Health Care Consent Act, have been in effect in Ontario since 1995, there is still a great deal of confusion about the definitions of capacity, who assesses capacity under what circumstances, and how capacity is assessed. This paper will outline the legislative framework in Ontario, examine the definitions of capacity, discuss who assesses capacity for what purposes, and review how capacity is assessed. It will also discuss the consequences of assessment and the need to “assess the assessors” if we intend to protect the rights of persons that get caught in the processes and procedures under the legislation. Capacity – What is Capacity? What is mental capacity? How is it defined in law? Capacity legislation is provincial therefore the definitions differ from province to province. In Ontario, decision making capacity is a legal definition, determined through a “legal” assessment. The definitions of capacity that appear in the Substitute Decisions Act and the Health Care Consent Act are as follows: Capacity to manage property- Substitute Decisions Act 6. A person is incapable of managing property if the person is not able to understand information that is relevant to making a decision in the management of his or her property, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision. Capacity for personal care - Substitute Decisions Act 45. A person is incapable of personal care if the person is not able to understand information that is relevant to making a decision concerning his or her own health care, nutrition, shelter, clothing, hygiene or safety, or is not able to appreciate the reasonably foreseeable consequences of a decision or lack of decision. Capacity in respect to treatment, admission to a care facility, or a personal assistance service – Health Care Consent Act
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4. (1) A person is capable with respect to a treatment, admission to a care facility or a personal assistance service if the person is able to understand the information that is relevant to making a decision about the treatment, admission or personal assistance service, as the case may be, and able to appreciate the reasonably foreseeable consequences of a decision or lack of decision. The Substitute Decisions Act and Health Care Consent Act refer to capacity as relating to two streams of decision making – decisions in respect to property and decisions related to personal care. In general all the decisions that a person makes in his or her life should fall into one of these two broad categories. Property decisions include, for example, all decision related to banking, day to day finances, investments, and real and personal property. Personal Care decisions include all decisions related to shelter, hygiene, nutrition, clothing, safety and health. Health care is the personal care area in which most often it was believed that authority for a particular decision was necessary because of the requirement for consent. That is one of the reasons why a separate Health Care Consent Act was created, to clarify consent and to ensure that all persons had a substitute decision maker for health care, even if that person had not executed a power of attorney for personal care or was not the subject of an order for guardianship. Health care decisions are defined as decisions related to treatment, admission to long term care homes, and personal assistance services in long term care homes.11 The Fram Report recommendations on this legislation proposed one bill. However two separate but related acts were created to assign administrative authority to the two appropriate Ministries, the Ministry of the Attorney General and the Ministry of Health and Long Term Care. It is helpful to read the two acts together, as if they were one, as this does help in understanding the legislative scheme. The two acts confirm that capacity is “issue specific” and relates to a particular decision. A person may be capable for personal care but incapable in respect to property in the broadest sense. A person may be capable in respect to some property decisions, such as simple day to day financial decisions (shopping for food, paying rent), but incapable for management of extensive assets or a business. A person may be capable to make a Continuing Power of attorney for property but not capable to manage property12. On the personal care side, it is similar. A person may have the ability to consent to some simple and obvious treatments, such as treatments to care for a cut or visible wound, but lack the capacity to consent to more complex treatments such as an operation or treatment for a psychiatric disorder. Likewise, a person may be incapable of making decisions in respect to where he or she should live (shelter) but capable for making decisions about hygiene, nutrition, and clothing, which are other domains of personal decisions making.
11 Health Care Consent Act, s.4 12 Substitute Decisions Act, s 6, s.8
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The legislation confirms that there is a presumption of capacity.13 Capacity should not come into question unless there is evidence to question that capacity for any purpose and a decision needs to be made. This presumption has broad implications. It means that it is important to look at the individual and his or her own individual “ability to understand and appreciate” information relevant to making a decision and not at any labels or diagnoses of disorders or disabilities. A person in the early stages of Alzheimer’s may still retain capacity for most purposes. A person in later stages of Alzheimer’s may still retain particular capacities and be able to make some choices. Persons with psychiatric disorders may be capable even for treatment decisions. The Ontario legislation defines capacity in relation to cognitive function. Assessment of capacity is an assessment of that person’s decisional abilities. Capacity in this respect does not relate to functional abilities or the results of a functional assessment. A person may have multiple physical disabilities and yet be mentally capable. Just because a person is considered by service providers as being “at risk’ because of his or her abilities to care for him or herself, that is not the criteria for determining that person to be incapable. The issue is whether the person has the ability to understand and appreciate the risks and not that that person chooses to place him or herself at risk. All the definitions in the legislation focus on the “ability to understand “and the “ability to appreciate”. What does this mean? Some guidance to how to interpret these phrases comes from within the Substitute Decisions Act. The drafters of the act included specific definitions of capacity to give a Continuing Power of attorney for Property and a Power of attorney for personal care. These are as follows: SDA 8. (1) A person is capable of giving a continuing power of attorney if he or she, (a) knows what kind of property he or she has and its approximate value; (b) is aware of obligations owed to his or her dependants; (c) knows that the attorney will be able to do on the person’s behalf anything in respect of property that the person could do if capable, except make a will, subject to the conditions and restrictions set out in the power of attorney; (d) knows that the attorney must account for his or her dealings with the person’s property; (e) knows that he or she may, if capable, revoke the continuing power of attorney; (f) appreciates that unless the attorney manages the property prudently its value may decline; and (g) appreciates the possibility that the attorney could misuse the authority given to him or her. 1992, c. 30, s. 8 (1)
13 Substitute Decisions Act, s.2; Health Care Consent Act, s.4
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SDA 47. (1) A person is capable of giving a power of attorney for personal care if the person, (a) has the ability to understand whether the proposed attorney has a genuine concern for the person’s welfare; and (b) appreciates that the person may need to have the proposed attorney make decisions for the person. 1992, c. 30, s. 47 (1). In looking at the definition of capacity to give a continuing power of property, “ability to understand” is reflected in the requirements that the person “know or understand particular relevant factual information – what their property is and the approximate value of it. The criteria also includes a requirement to “know” of obligations owed to dependents, that the attorney will have the same authority to deal with the grantor’s property that the grantor would have except make a will, that the attorney must account for how he or she deals with the grantor’s property because the attorney is a fiduciary and the money being managed is not the attorney’s and that the grantor may revoke the power of attorney. Some of the criteria go beyond having factual knowledge and require that the person also must have problem solving ability which is part of “ability to understand”. Knowing of obligations owed to dependents infers that the person must “understand” the competing interests in his or her property and legal obligations of support. Knowing about the duty to account and the ability to revoke infers that the grantor “knows’ that he or she can make choices, choosing to revoke the POA or have it continue. He or she also knows that the attorney must use the grantor’s property for the grantor’s benefit and is accountable for the management of the property and can be put to the test of reporting on how that management was done. This demonstrates ability to problem solve. “Ability to appreciate” is reflected in the requirement that the person appreciates that the property value of his or her assets may decline and that the attorney could abuse this authority that is granted in the POA This demonstrates that the person has insight and can reason, and can appraise potential outcomes of the decision to grant a POA. The definition of capacity to give a power of attorney for personal care is similar, focusing on whether the person has the factual knowledge about the attorney concern for the grantor’s welfare as well as the appreciation or insight into the attorney’s role as attorney and that the attorney would make decisions for the grantor that impact on the grantor’s life. What does “ability to understand “and “ability to appreciate” mean?14 The ability to understand focuses on factual knowledge and problem solving ability, which includes
14 Reference should be made to the cases of Starson v. Swaze, [2003} 1S.C.R. 722 and Re: Koch, 33 O.R. (35)485, [1997] O.J.No. 1487 for the discussion of these definitions and the assessment process. The expanded paper will include review of this case law.
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understanding of options.15 Does the person have the ability to retain information and have the factual knowledge that he or she needs to consider when making a decision? In the treatment scenario, does the person know that he or she has a health problem and what that health problem is? Does that person have the ability to understand the risks and benefits of the treatment even if he or she does not accept the treatment offered or does not comply with the recommended health care plan? A person is not incapable just because the person refuses treatments that could be beneficial or disagrees with the health providers. Obviously, a person is not incapable just because they have a lack of knowledge. They must be given the opportunity to learn the facts and then be assessed as to whether they understand and can retain that knowledge. In the property context, does the person know what assets and income he or she has and the approximate value of these assets? Again this is contextual. If a person does not do their own financial management, he or she may not know the details of the assets or be able to explain how much is paid for a particular expense. However he or she may be able to explain his or her overall income and that expenses do not exceed income. In this day and age of electronic banking, many people do not pay bills by signing and mailing cheques. They have set up automatic deductions from bank accounts. This can explain why a person does not have the particular knowledge of the amount of a bill. Not knowing the specific bill amounts would then not reflect incapacity but only lack of specific knowledge. As well, a person may not have the factual knowledge or appreciate the true value of some of his or her assets because that person has no reason to update his or her knowledge about the value of the assets. House values in Toronto have greatly increased in the past years. It would be unfair to determine that a senior is incapable of managing property just because he or she greatly underestimates the true value of the property. To put this in perspective that senior may have purchased the property in 1964 for $12,000. He or she may know that property values have increased but when asked about he value of the asset may respond that the property has a value of $175,000 when in fact the present value may be in excess of $700,000. If that person is not seeking to sell the property, these answers may make sense. If that person is in the midst of a sale, or is thinking of selling and does not understand how to get the value determined or cannot retain the information about the true value, this may raise some concerns about that persons ability to understand and appreciate. Can the person understand information about options and risks to make an informed choice? The person may make a decision to live at risk but if he or she has the ability to
15 The description of the terms “ability to understand” and “ability to appreciate” in this article is adapted from teaching materials and education sessions delivered by Dr. Janet Munson and Dr. Carole Cohen and from the Guidelines for Conducting Assessments of Capacity, Capacity Assessment Office, Ontario Ministry of the Attorney General , May 2005. The foreword to those Guidelines provides complete credit to all persons involved. That foreword gives primary credit for the guidelines to Dr. Janet Munson and Dr. Jean Kozak.
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understand and appreciate that risk that is evidence of capacity. Can the person problem solve around personal issues, such as how he or she will accomplish necessary tasks like getting groceries or paying bills or toileting and maintaining a level of hygiene? Can the person retain information long enough to make a decision? The ability to appreciate is related to whether that person has a realistic appraisal of outcomes and can justify choices. Appreciation focuses on the reasoning process.” The “appreciate” standard attempts to capture the evaluative nature of capable decision-making, and reflects the attachment of personal meaning to the facts in a given situation.” 16 Does the person demonstrate adequate insight? Does the person acknowledge and recognize his or her own limitations that prevent him or her from meeting his or her own needs or meeting situational demands? Can that person justify his or her choices? Does the person show that he or she can make a reasoned choice? The choice does not necessarily need to be a “reasonable” one or best one from the point of view of the observer but can the person explain his or her choices and justify them and are the choices based in reality? A person can be eccentric but still capable. Can the person manipulate the information relevant to making a decision? A person may have delusions but if the delusions do not relate to the decision that needs to be made, that person may be mentally capable. 17
Note that the definitions of capacity in the statute refer to the ABILITY to understand and ABILITY to appreciate, not just understanding and appreciation. As stated by Mr Justice Major, for the majority, commenting on the test of capacity in respect to treatment in the case of Starson v. Swayze, [2004] 1 S.C.R. 722,
“… the Act (Health Care Consent Act) requires a patient to have the ability to appreciate the consequences of a decision. It does not require actual appreciation of those consequences. The distinction is subtle but important: see L. H. Roth, A. Meisel and C. W. Lidz, "Tests of Competency to Consent to Treatment" (1977), 134 Am. J. Psychiatry 279, at pp. 281-82, and Weisstub Report, supra, at p. 249 . In practice, the determination of capacity should begin with an inquiry into the patient's actual appreciation of the parameters of the decision being made: the nature and purpose of the proposed treatment; the foreseeable benefits and risks of treatment; the alternative courses of action available; and the expected consequences of not having the treatment. If the patient shows an appreciation of these parameters -- regardless of whether he weighs or values the information differently than the attending physician and disagrees with the treatment recommendation -- he has the ability to appreciate the decision he makes: see Roth, Meisel and Lidz, supra, at p. 281.
However, a patient's failure to demonstrate actual appreciation does not inexorably lead to a conclusion of incapacity. The patient's lack of appreciation may derive from causes that do not undermine his ability to appreciate consequences. For
16 Guidelines for Conducting Assessments of Capacity, Capacity Assessment Office, Ontario Ministry of the Attorney General , May 2005, p.II.4 17 See also Quick reference Chart on Capacity Assessment at the end of this paper.
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instance, a lack of appreciation may reflect the attending physician's failure to adequately inform the patient of the decision's consequences: see the Weisstub Report, supra, at p. 249. Accordingly, it is imperative that the Board inquire into the reasons for the patient's failure to appreciate consequences. A finding of incapacity is justified only if those reasons demonstrate that the patient's mental disorder prevents him [page763] from having the ability to appreciate the foreseeable consequences of the decision.”
Who Assesses Capacity? Who assesses capacity? This is a somewhat difficult question to answer as it depends on a number of factors.18 It is necessary to look at what type of capacity is being assessed or what decision needs to be made. It is also necessary to look at whether the statutes, the Substitute Decisions Act or the Health Care Consent Act, or any other statute, require a particular class of persons to assess the particular capacity. 19 If a statute does not require a particular class of persons to do the determination of capacity, then the answer as to who assesses is in the common law. 20 For capacity to instruct, as described above, it is the lawyer interacting with the potential client that should determine this capacity, For health treatment, the health practitioner who proposes the treatment is responsible for the assessment of capacity of the patient.21 The term health practitioner22 is defined in the Health Care Consent Act as including all persons who are members of any of the regulated health professions , such as physicians, nurses, psychologists, dentists, audiologists, physiotherapists as well as naturopaths registered as a drugless therapists under the Drugless Practitioners Act. The full list of health practitioners is in the definitions section 1 of that legislation. If there is a plan of treatment for a person involving more than one health practitioners, one health practitioner on behalf of the team of health practitioners may determine the person’s capacity in respect to the treatments in the plan. 23 If the health practitioner determines that the person is incapable for the treatment proposed, he or she is required to inform that person of the consequences of that finding of incapacity24, following the guidelines for their particular Health College. In general,
18 See Chart on Who Assesses Capacity Under What Circumstances at end of paper. 19 An example of another statute that specifies who assesses capacity in respect to property is the Mental Health Act, R.S.O, 1990, c, M.7. S.54 of that Act requires on admission of a patient to a psychiatric facility, that a physician determine whether that patient is capable of managing property. 20 See Chart - Who Assesses Capacity Under What Circumstances at end of paper 21 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A, s.10(1) 22 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A, s,1 23 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A, s.13 24 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A, s.17
13
the guidelines specify that the finding of incapacity must be communicated and the fact that the health practitioner will turn to the incapable persons substitute decision maker for the consent or refusal of consent to the treatment proposed. As well the person must be informed of the opportunity to challenge the finding of incapacity by way of a hearing before the Consent and Capacity Board. If the person does not challenge this finding then the health practitioner may proceed to get the consent or refusal of consent from the substitute. 25 It is also a statutory requirement that capacity to make a decision in respect to admission to a long term care facility must be assessed by an “evaluator’26. An evaluator is defined in the statute as a member of one of the following Health Colleges: (a) College of Audiologists and Speech-Language Pathologists of Ontario (b) College of Nurses of Ontario (c) College of Occupational Therapists of Ontario (d) College of Physicians and Surgeons of Ontario (e) College of Physiotherapists of Ontario (f) College of Psychologists of Ontario27 In addition to the various health practitioners listed in the statute, social workers are added by Regulation 104/96 as amended by O.Reg. 264/00 under the Health Care Consent Act as evaluators. The term "social worker" is defined as a member of the Ontario College of Social Workers and Social Service Workers who holds a certificate of registration for social work. These health professionals were chosen to undertake this determination of capacity because these are the professionals most likely to be providing direct services to seniors, the primary users of long term care, both in the community and in health care facilities. The Ontario legislation also provides for persons called “capacity assessors’. Despite this misleading title, capacity assessors are not required to be used for capacity assessments unless the statute so requires. Capacity assessors should not be used to determine capacity for treatment because that responsibility is that of the health professional proposing the treatment. Although capacity assessors are not required in all instances to determine capacity to manage property, capacity assessors are required to assess capacity in respect to property to trigger a statutory guardianship under S. 16 of the Substitute Decision Act. A statutory guardianship is a type of guardianship of property. A request may be made to a capacity assessor to do this type of assessment if the person to be assessed is believed to lack capacity to manage property, and has not executed a continuing power of attorney for property over all their property. 28 If a person has created a continuing power of attorney for property and drafted into it a requirement that the power of attorney should not come into effect until he or she has
25 See also Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A,, s.18 26 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A. 40(1) 27 Health Care Consent Act, 1996, S.O. 1996, c.2, Schedule A,s.2(1) 28 Substitute Decisions Act, 1992, S.O. 1992, c.30, s.16
14
been assessed as incapable to manage property, and the method of assessment is not specified in that power of attorney document, then the Substitute Decisions Act, s.9 (3) specifies that a capacity assessor must be used to assess capacity. If the person had specified a different method of assessment, such as by a nurse, physician, or even a person that is not a health professional, such as a family member or friend, that other method of assessment would need to be followed. The assessment by a capacity assessor is the default, as set out in the statute. A similar provision may be included in a power of attorney for personal care about the confirmation of incapacity before the POAPC comes into effect.29 As with Continuing POA for Property, the requirement for confirmation of incapacity may state that a particular person or class of persons does this confirmation of incapacity, even if the person or type of person named is not a health professional or capacity assessor. If the requirement for assessment is included in the POAPC but no person or class of persons is specified to do the assessment, the default is that a “Capacity assessor” as defined by the legislation do the confirmation of incapacity.30 The term "capacity assessor" is defined in the Substitute Decisions Act, Regulation 460/05. This regulation states: “2. (1) A person is qualified to do assessments of capacity if he or she, (a) satisfies one of the conditions set out in subsection (2); (b) has successfully completed the qualifying course for assessors described in section 4; (c) complies with section 5 (continuing education courses); (d) complies with section 6 (minimum annual number of assessments); and (e) is covered by professional liability insurance of not less than $1,000,000, in respect of assessments of capacity, or belongs to an association that provides protection against professional liability, in respect of assessments of capacity, in an amount not less than $1,000,000. (2) The following are the conditions mentioned in clause (1) (a): 1. Being a member of the College of Physicians and Surgeons of Ontario. 2. Being a member of the College of Psychologists of Ontario. 3. Being a member of the Ontario College of Social Workers and Social Service Workers and holding a certificate of registration for social work. 4. Being a member of the College of Occupational Therapists of Ontario. 5. Being a member of the College of Nurses of Ontario and holding a general certificate of registration as a registered nurse or an extended certificate of registration as a registered nurse. (3) The requirement that the person hold a general certificate of registration as a registered nurse or an extended certificate of registration as a registered nurse, as set out in paragraph 5 of subsection (2), does not apply to a member of the College of Nurses of Ontario who, on November 30, 2005, is qualified to do assessments of capacity under Ontario Regulation 293/96 (Capacity Assessment) made under the Act. 29 Substitute Decisions Act, s.49 30 Substitute Decisions Act, s. 49(2)
15
(4) Clause (1) (b) does not apply to a person who, on November 30, 2005, is qualified to do assessments of capacity under Ontario Regulation 293/96 (Capacity Assessment) made under the Act. … “ Capacity Assessors are required to conduct assessments in the manner and form as described in the “Guidelines for Conducting Assessments of Capacity” dated May, 2005, available on the internet website of the Ontario Ministry of the Attorney General. Failure to comply with the prescribed guidelines may result in a complaint to the college of the regulated health profession of which the assessor is a member. No “formal” assessment by a health professional or capacity assessor or evaluator is necessary in all circumstances to determine that a person is incapable and lacks decisional capacity. The formal assessments are required only if the statute so specifies for a particular purpose or a person has drafted this requirement into a power of attorney document. In other circumstances, for example, to trigger a power of attorney for property that does not specify a requirement for a formal assessment, then the named attorney makes the determination of incapacity which would require him or her to take over management of the grantor’s property.31 Capacity assessors may charge fees for the assessments that they undertake. These fees may range anywhere from $300 to fairly substantial sums, depending on the time necessary to the assessment and the complexity of the assessment. These fees are not covered by provincial health insurance. The person requesting the assessment is usually responsible for the payment for the assessment although requestors may ask for reimbursement from the person’s estate if the person is found incapable and a statutory guardian is created, and there are sufficient funds in the incapable person’s estate to pay for the assessment. There is also a Financial Assistance Programme to cover the costs of an assessment where an individual makes this request and cannot afford to pay the fees. As stated in the information sheet from the Capacity Assessment Office32 this assistance is available if: a. the particular assessment required cannot, by law, be completed by anyone other than a designated capacity assessor; b. the Capacity Assessment Office agrees that a capacity assessment is appropriate in the circumstances; and c. the individual requesting the assessment meets the financial criteria to be eligible for financial assistance. To determine this, the requester will need to provide financial information about his/her own finances.”
31 See Chart at end of paper 32 Capacity Assessment Office: Questions and Answers , Ministry of the Attorney General, www.attorneygeneral.jus.gov.on.ca/English/family/pgt/capacityoffice.asp#12
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Applications for Financial Assistance are available from the Capacity Assessment Office which is located at the Office of the Ontario Public Guardian and Trustee.
How is Capacity Assessed?
As previously stated, the designated Capacity assessors are required to conduct assessments in the manner and form as described in the “Guidelines for Conducting Assessments of Capacity” dated May, 2005., The Guidelines are not attached to this paper because these are available on the internet website of the Ontario Ministry of the Attorney General, under the page for the Public Guardian and Trustee, at www.attorneygeneral.jus.gov.on.ca/english/family/pgt/capacity.asp
These Guidelines were originally developed in 1995 and used in the training of the designated capacity assessors from outset. However, the requirement to follow the Guidelines, to have the quality of the assessments reviewed, to have mandatory continuing education, and to do a minimum number of assessments to retain designation only came into effect in December 2005.
Originally, the capacity assessment office and system that oversaw these assessors was more extensive. It had been intended to create a more comprehensive system that would include standards for assessors, peer review, various quality assurance practices, discipline procedures, continuing education and a code of ethics. Prior to proclamation of the legislation, there was not enough time to set up this complete system although the Capacity Assessment Office was established and originally staffed by 7 or 8 people that were working on this system development, The discussions about the appropriate oversight for assessors included discussions about the establishment of a “College” of assessors or a similar body. The hope was that by committing resources to this work that capacity assessment would be improved and that research on assessment in the legal context would be an outcome.
Unfortunately, as the provincial government changed shortly after the proclamation of this legislation, within a year, the legislation was amended, parts of the legislative package were repealed, and the Capacity Assessment Office was reduced to a two person office that could not undertake the system development that had been contemplated. Nor was that the mandate of that office at that time. Passage of this recent regulation has been lauded by many, particularly advocates for the persons most likely to be assessed as it is hoped that the quality of the assessments will improve as a result.
The original education programme to be designated as an assessor took a full week and included testing on the legislation as well as the assessment process. The assessors’ course is now only one day and lacks many of the previous testing requirements.
Assessors originally did not need to be regulated health professionals. Assessor applicants could come from any field and background, including law. This was changed
17
in the 1996 amendments to the Substitute Decisions Act primarily to address discipline and complaints. With the dissolution of the broader based Capacity Assessment Office that did develop a Code of Ethics for assessors and had the potential authority to discipline and remove the designation of the assessors, it was decided that capacity assessors had to be regulated health professionals. Complaints about assessors can be made to the appropriate Health Colleges. The next version of this paper will look at whether complaints are made to the Colleges about assessors and how the Colleges have dealt with these complaints.
Capacity assessors cannot do an assessment if the person refuses to be assessed. 33 The person does not need to consent; he or she just has to not refuse. This lesser threshold was put in legislation to get around the claim that the person may not be capable of consenting. The capacity assessor must explain to the person to be assessed, “(a) the purpose of the assessment; (b) the significance and effect of a finding of capacity or incapacity; and (c) the person’s right to refuse to be assessed. “ This requirement does not need to be followed if the assessment was ordered by the court under section 79 of the Substitute Decisions Act. This requirement was included in the legislation for fairness. This requirement provides for a level of rights advice prior to the assessment taking place because the consequences of the assessment, if the person is found incapable, will be that person loses authority over the management of their property and a statutory guardianship will be created. If the person refuses the assessment, the person who requested the assessment, usually a family member, will need to apply to court for a Guardianship order. In that process he or she can ask for an order for an assessment. When doing the assessment, the expectation is that the capacity assessors will follow a fair process. This would include ensuring that the person is comfortable and can hear the assessor and can understand what the assessor is saying to him or her. The assessor should not use terminology or technical language and should gear his or her questions to the education level and abilities of that individual. If the person being assessed wants other persons present during the assessment that should be accommodated. In doing the assessment, the assessors are expected to “probe” and verify – to ask questions to determine the thought process of the person being assessed and to check if what the person is saying is correct or logical and not a delusion. Mr. Justice Quinn in the case of Re:Koch, 33 O.R. (3d) 485, [1997] O.J. No. 1487 commented on the assessments of capacity done by a capacity assessor, Talosi, and an evaluator, Higgins. He states: “In my view, it was not sufficient for Talosi and Higgins merely to recordinformation provided by the appellant and then form an opinion. In some instancesthe appellant should have been probed to determine the thought process by which she arrived at an answer or statement. Until her thought process is known, it is
33 SDA s.78
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neither fair nor reasonable to impugn the appellant's mental capacity. By notexploring the process by which the appellant arrived at her decisions, answers andstatements, Talosi and Higgins have assumed, quite unfairly, the absence of logic.In doing so, they greatly impaired their ability to assess and evaluate the appellant'scognitive abilities. In addition, of course, they adulterated their credibility. In some instances, verification should have been sought. For example, regardingthe allegations made by the appellant against her husband (which Talosi seems tohave dismissed as delusional) Talosi should have made some effort to verify theiraccuracy. At the very least, she might have spoken with the appellant's lawyer toascertain whether he had any corroborative particulars.”34
Designated capacity assessors are required to be used for particular assessments as required in the Substitute Decisions Act. If a capacity assessor is used to do other types of assessments, such as testamentary capacity, caution should be taken to determine if the assessor has the knowledge to do that type of assessment. In becoming a designated capacity assessor, he or she does not have any particular training on that type of assessment and may not be aware of the legal test for testamentary capacity. When doing assessments of capacity that are not specified as requiring capacity assessors to do the assessment, the assessors are not doing an “assessment” that triggers a particular event or change of status of the person assessed, such as what happens if an assessor finds a person incapable in respect to property that triggers a statutory guardianship under s. 16 of the Substitute Decisions Act. The capacity assessor is only rendering an “opinion” as to capacity.
In contrast to the capacity assessors, the evaluators receive no specific training on capacity assessment. They get the authority to assess capacity in respect to consent to admission into long term care homes simply from being a member of one of the Health Colleges that are listed in the definition of evaluator.
As stated previously, evaluators must be used to assess capacity to consent to admission to a long term care homes. Before a person is admitted into a long term care home that person must be assessed as having health and functional needs of the level required for admission. That person must also consent to admission. If the person is not mentally capable to consent, then that person’s substitute decision maker as defined by the legislation may provide that consent.
There is no equivalent to s. 78 of the SDA in the HCCA that would apply to evaluators, however, in obiter, in Re: Koch case, Mr. Justice Quinn stated that the evaluators should also inform the person being evaluated of the purpose and consequences of the evaluation and should not evaluate if the person refuses.
The evaluators use a questionnaire when evaluating the capacity of a person to consent to admission. This questionnaire is not part of the legislation but was created by the
34 This discussion of the assessment process will be expanded in the final paper
19
Ministry of Health and Long term care to assist the evaluators. The questionnaire contains 5 questions which are as follows:
1. What problems are you having right now?
2. How do you think admission to a nursing home or home for the aged could help you with your condition /problem?
3. Can you think of other ways of looking after your condition/problem?
4. What could happen to you if you choose not to live in a nursing home or home for the aged?
5. What could happen to you if you choose to live in a nursing home or home for the aged?
This questionnaire has come under a great deal of criticism as it is very simplistic. Some evaluators use it in a narrow way, asking only these questions t then form an opinion of capacity of the person being assessed. This approach is inadequate and will likely result in an assessment that is easily challenged if the person applies to the Consent and Capacity Board for a review.
Evaluators should “probe and verify” and approach the assessment in a manner similar to that of the designated capacity assessors. The 5 question questionnaire was intended as a tool, to roughly outline to the evaluator the types of questions that they should ask and the areas to explore to assess the ability to understand and the ability to appreciate in respect to decisions about admission to long term care. The evaluators should ensure that before starting the evaluation that the person is aware of his or her own state of health and what a long term care facility is and how this type of accommodation would assist the person. Many people do not have the factual knowledge about what long term care is and how these homes operate. Without this basic information it would be unfair to assess someone’s capacity to make decisions about admission.
Assessing the Assessments
What should a lawyer do to ensure that a good assessment is done?
First determine why an assessment is needed? Will it be used as evidence in a hearing and what type of hearing? For applications for guardianship, to proceed by summary application, assessments by capacity assessors are required. If not applying for a summary order, then other evidence of incapacity, such as reports by other health providers, affidavits from family and other evidence may be presented instead of a report from a capacity assessor. To trigger a statutory guardianship for property, an assessment
20
by a capacity assessor must be obtained. Make certain that the right type of assessment is obtained from the right party that will be useful for the purpose intended.
Is the assessment going to be used as additional evidence of capacity for a particular purpose, to paper the file in the event that capacity to execute a particular document? For this purpose, is an assessment the best evidence or should other evidence also be obtained, such as affidavit evidence from other persons that know the client and have observed the client’s actions and behaviours and could attest to the client’s capacity?
Defence assessments should not be used to “prove” to the lawyer that the client is capable for the purpose he or she is retaining the lawyer. The lawyer should first be satisfied that the client has capacity to instruct and then obtain additional assessments as supplemental to his or her own opinion of capacity.
It is the responsibility of the lawyer to make a good request for an assessment. That would include detailing to the assessor the type of assessment required, the legal tests of capacity, and information from case law as to the criteria in respect to capacity and the process of assessment. Include information on the requirement to “probe and verify”, or the requirement that the assessment must follow the Guidelines for Capacity Assessment if the assessment is being done by a capacity assessor and the assessment is one in which the statute requires capacity assessors to be used.
Be specific as to the capacity to be assessed, be it property, or capacity to do a POA, or testamentary capacity etc.
Explain the purpose of the assessment—as to whether it is for defence purposes or to trigger a statutory guardianship. Lawyers have advised us that they were surprised when their client’s property suddenly was being managed by the Public Guardian and Trustee when the lawyer was only looking for an opinion on the client’s capacity to manage property to assist the lawyer in discussions with the client on possible options for property management.
If the lawyer is given an assessment about his or her client alleging incapacity, how does the lawyer assess the assessment?
Has the assessment been done by the right type of assessor for the purpose the assessment is to be used? Did that assessor follow the proper process of assessment? Is it clear what “test” of capacity was used – did the assessor assess the person in relation to the legal test of capacity or is it a functional assessment or an assessment based on the MMSE or other type of test.
Did the assessor follow any statutory requirements of process, such as the s.78 requirement to inform the person that he or she could refuse the assessment? Did the client receive the proper rights advice information if required by statute?
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Did the assessor accommodate for the client’s needs in respect to hearing, language, education level? Did the assessor inform the person that he or she could have others present during the assessment, such as family, friends, his or her lawyer?
Did the assessor “probe and verify”? In one case, an evaluator concluded that a woman was incapable in respect to admission. She based this opinion on a number of factors including her observations on the state of disorder of the woman’s home and on the woman’s behaviours during the assessment. The woman had been ironing her husband’s shirts when the evaluator met with her. The evaluator knew that the woman’s husband had died nearly ten years before. The evaluator did not ask the woman why she was ironing these shirts but concluded that the woman was delusional and thought her husband was alive. In fact, if asked, the woman would have explained that she was ironing the shirts because she was planning to give the shirts to the Salvation Army for use by other people. The evaluator had failed to “probe and verify’.
Is the written report complete? Does the report properly detail the person’s own words used when questioned and the questions asked by the assessor to determine the person’s ability to understand and the ability to appreciate the information relevant to the particular decision to be made? 35
Impact of Assessments
An assessment on incapacity can have a profound effect on a person’s life. The assessment can be used in proceedings that could result in the person losing authority to make decisions in major portions of his or her life. In guardianship applications, the judge ultimately makes the decision whether the person is incapable or not for particular purposes and the assessments are only part of the evidence. Other assessments, such as the assessment to trigger a statutory guardianship of property or the determination by a health practitioner that a person is incapable in respect to treatment, can have an almost immediate impact even though the person has the right to have a review of these assessments by the Consent and Capacity Board. That right of review is almost wholly dependent on that person receiving the proper required rights advice and information on how to apply to the Board. This rights advice, although required, may not be given or the person may not fully understand that process or be able to get through that process without assistance.
The assessment process is a major intrusion in a person’s life, and should not be undertaken without appreciation of the possible consequences as well as the impact on the individual. It cannot be easy to know that others are questioning your capacity to make decisions for yourself!
Lawyers play a major role in ensuring that capacity assessments are used properly, obtained only when necessary for a particular purpose, and are done in a fair manner. 35 This part of the paper needs the most work to develop. This part will be expanded and substantially rewritten in the final version.
14 – December 2008
wills and estatesQLS Journal
There are few requirements to make a will. Basically a testator must be 18 years of age1
and of sound mind. Wills are made in the main as people grow older and have assets
they wish to pass on to the next generation.With the onset of age and possible dementia issues of
testamentary capacity arise more frequently. At first glance issues related to testamentary capacity to make a will involve old law.
Given the enormous advances in medical science in the past 100 years, it may surprise some that the test of whether a will maker has sufficient mental capacity to make a will remains as was set out by LJ in 1875 in Banks v Goodfellow,2 which is discussed below. Despite the fact that present day courts3 and lawyers still use the formula from Banks v Goodfellow to assess testamentary capacity, new issues relating to capacity have arisen in recent times.
The lawyer’s role and duty in the assessment of capacity
A current issue is the lawyer’s role and duty in the assessment of capacity, whether it is capacity to make a will, enduring power of attorney (EPA) or capacity more generally for a matter. This is particularly highlighted by the recent decision of Legal Practices Tribunal v Ford (Ford).4 In that case, a Queensland legal practitioner was found guilty of unsatisfactory professional conduct because his conduct in relation to the execution of an enduring power of attorney and a will “fell short of a standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent Australian legal practitioner”.5 The practitioner was disciplined by way of public reprimand and an order to pay legal costs of the applicant Legal Services Commissioner, though given that “the case has a certain element of being a test case”, was not subjected to a pecuniary penalty.6
A similar issue has arisen relating to the conviction for manslaughter of a former pilot’s de facto partner in circumstances involving participation in a scheme for euthanasia.7 The former Qantas pilot, Graeme Wiley, who had been diagnosed with Alzheimer’s disease and had twice previously attempted to commit suicide, made a will drawn by his solicitor a week before his death under which he left his $2.4 million estate to his de facto partner, Shirley Justins, and only relatively small legacies to his two daughters. Under his previous will Wiley’s estate was divided between Justins and his two daughters (the daughters being entitled to share one half of his estate). The daughters had commenced proceedings to challenge the will for lack of capacity, although given the manslaughter conviction it may be that Justins’ entitlement may now be liable to forfeiture in any event.8 According to a press report, the lawyer testified that she believed that her client had capacity and was not subject to undue influence.9 She also testified that she had no knowledge that he had Alzheimer’s disease, or that he had previously attempted to commit suicide.10 Indeed, it has been reported that in the criminal trial the jury was informed that Justins had not told the solicitor that Wylie was suffering dementia when she asked her to draw up the new will.11 The extent to which the lawyer’s conduct in this case may become subject to litigation and/or professional disciplinary action is an open question.
Challenge of a will by a beneficiary where there is scant evidence of testamentary incapacity
The other side of the coin is where beneficiaries challenge a will on grounds of incapacity with little real evidence and thereby tie up the administration of the estate for a long period. A recent case, Hayes v Hayes,12 involved a successful application for summary judgment in favour of the executor proving the will in a solemn form testamentary capacity case. In that case all of the evidence before the court pointed to the deceased having testamentary capacity, and there was no evidence which suggested to the contrary.13 This decision is helpful as it prevents a misuse of the process of challenging a grant of probate for want of capacity, where the applicant has little real evidence to support the claim and simply seeks to test the merits of witnesses supporting the grant of probate.
Court’s new jurisdiction to make wills for persons without testamentary capacity
There is also the problem of the client who has never had capacity (since birth) or lost capacity through injury (early in life) and thus has never had capacity to make a will, or there is the client whose will is outdated, but through loss of capacity cannot make a new will. Since the 2006 amendments to the Succession Act, the Queensland Supreme Court has had a new jurisdiction to make wills for those lacking testamentary capacity, a reform that other jurisdictions such as Victoria, South Australia and the United Kingdom have had for a longer period. The importance of this new jurisdiction is underscored by De Gois v Korp,14 the Victorian case widely reported in the media. There a husband allegedly conspired with his lover to kill his wife, who was discovered unconscious in a car boot. While her mother was on life support, her daughter successfully applied to the Victorian court to make a new will in favour of her two children; her previous will was in favour of her husband. The husband committed suicide after he was committed for trial for murder.
Capacity in other contextsIssues of capacity (apart from testamentary capacity)
also arise frequently in a modern context in cases where a client wants to make an enduring power of attorney, a superannuation binding death nomination or is an adult unable to make his or her own decisions – matters which fall within the jurisdiction of the Queensland Guardianship and Administration Tribunal. As discussed below, the definition of capacity within the Powers of Attorney Act and Guardianship and Administration Act (which is the same under schedule 3 of the PAA Act and schedule 4 of the GAA Act)15 is similar, but different from the common law test of testamentary capacity.
by Barbara Hamilton and Tina CockburnCapacity to make a Will and Enduring Power of Attorney: Issues new and old
15 – December 2008
wills and estates QLS Journal
Banks v Goodfellow: test of testamentary capacity
The test in Banks v Goodfellow has been reaffirmed and applied in modern cases and it still remains good law.16 According to the test, to have sufficient capacity a testator must:
Understand the nature of the act and its effects;•Be aware of the extent of the property of which s/he is •disposing;Appreciate the claims to which s/he ought to give •effect.17
The test is clever in that even today it recognises the interplay between issues of cognition (medical science) and appreciation of legal entitlements and assets. The test of capacity can never simply be a medical test because capacity is task-specific: it depends on the nature and complexity of the will intended, the extent and complexity of the will maker’s assets, and the will maker’s personal circumstances. In short, capacity must be assessed in relation to the task at hand; a simple will can be made by a severely demented person, a complex will may not be able to be made by a person with symptoms of mild dementia. Cases where sufficient capacity is a real issue need the involvement of both the client’s doctor (even perhaps specialist gerontologist) and lawyer.
Assessment of capacity by the lawyer drafting a client’s will
In most cases when an elderly client presents to a lawyer, he or she can fairly easily apply the Banks v Goodfellow test by asking simple questions such as:
Does the client know he or she is making a will and •what that means?Is the client aware of the extent of his or her property •and how it is owned?Is the client aware of family members or others who •in the ordinary course of things would usually be remembered in a will and/or reasons to exclude certain persons?
In more contentious situations (such as where a lawyer is called to attend on an elderly client seriously ill in hospital), the lawyer will naturally seek the involvement of medical staff to ensure that the client is not exhibiting signs of incapacity or even just to find out the best time to discuss matters with a client in order to maximise the client’s alertness and comfort.
Lawyer’s duties to client and potential civil liability in situations of dubious testamentary capacity
The recent Ford decision and the Wiley/Justins case mentioned above highlight pitfalls for lawyers in this area. On one hand there is the problem of potentially frustrating a client’s intentions if coherent instructions are not acted upon because of concerns about lack of capacity (or not acting on instructions promptly and the client dies), or on the other hand drawing a will that disinherits beneficiaries under a previous will, who must take expensive litigation to prove the new will is invalid for incapacity.
Civil liabilitySolicitors may be faced with potential exposure to liability
for negligence on the one hand for failing to act on instructions and prepare a will, or on the other hand for failing to ensure a testator has testamentary capacity and is not unduly influenced by any beneficiary. While liability for negligence on the first account is well-established,18 no case has yet held a lawyer liable for negligence for failing to ensure his client had testamentary capacity. However UK authority19 suggests there may be adverse costs consequences for the solicitor
(presumably where the solicitor is made a third party to litigation to contest the validity of a will for lack of capacity)20 in such circumstances and in an extreme case liability for negligence at the suit of disappointed beneficiaries.21 However it is clear that a lawyer who takes a careful and common-sense approach (particularly in maintaining full diary notes and involving medical practitioners in cases of doubtful capacity) will avoid any potential problems, even when faced with difficult instructions.
The UK case of Sharp v Adam22 is a good illustration of the difficulties which often face solicitors when taking instructions for wills in circumstances where the physical and mental health of the client is deteriorating. In this case the line between rational judgment and impaired capacity was as hard to determine as the line between twilight and darkness.23 However even though the will was eventually held invalid for lack of capacity, the lawyer was described as having taken a textbook approach to both following her client’s instructions and at the same time making every endeavour to ensure capacity, as well as to record the process meticulously.24
In that case the testator died aged 70, with severe symptoms of multiple sclerosis. In the last years of his life he lost speech and his eyesight was severely affected. He could only communicate by movement of his head and eyes. His earlier wills left some legacies to close employees (he was a veterinary surgeon who ran a successful horse stud), but the large residuary estate to his two daughters. His last will, made about one year before his death, left the bulk of his estate to two employees. His daughters were entirely excluded. There was no real evidence that explained their exclusion. The daughters successfully challenged the will for lack of capacity. It was held that the will could not be upheld as it was made with a lack of capacity resulting from mental deterioration caused by the multiple sclerosis.
The outcome eventually depended on expert medical witnesses; a professor in neuropsychiatry for the daughters and a consultant neurologist for the employees. The professor was of the view there was no capacity because of cognitive impairment. The trial judge was particularly persuaded by the evidence of the neurologist for the employees, who conceded a lack of rational explanation for the change in the will was an important factor in deciding whether capacity was impaired. The Court of Appeal upheld the trial judge and Lord Justice May concluded his judgment in the Court of Appeal by citing Lord Cranworth’s famous dictum from Boyse v Rossborough:25
“There is no possibility of mistaking midnight from noon, but at what precise moment twilight becomes darkness is hard to determine.”
In this most challenging situation for a solicitor, as well as family members and employees, the solicitor was described effectively as having taken a textbook approach in the face of such difficult instructions from a client with clearly impaired capacity.26 She involved another lawyer from her firm and the testator’s GP and questioned her client stringently about the change in the will and the hurt it would cause the daughters. She maintained extensive diary notes of all dealings. On one occasion when her client was to execute the will in the presence of the other lawyer and GP, they decided not to proceed because of a feeling capacity might be dubious at that time. Eventually the will was executed and the solicitor, the other lawyer, and GP testified that despite the testator’s impairments they all believed he had at the time the requisite capacity to make a will.
There was no suggestion of adverse costs implications for the solicitor or breach of professional ethical duty,
16 – December 2008
wills and estatesQLS Journaldespite the will not being upheld, as she had done all that was reasonable in her power to ensure there was sufficient capacity to proceed and to follow her client’s instructions.27 It can be seen from this case that the challenges which not infrequently present to solicitors in practice should mean that civil liability should not be lightly imposed in cases where a will is overturned because a testator is subsequently found to have not had capacity, as such liability may well impede a solicitor’s ability to freely act appropriately on a client’s instructions. This view is reflected in present cases, and the view was clearly expressed by McFadyen JA in Graham v Bonnycastle:28
“A solicitor must be free to act in the best interests of her client when discharging her duties to make enquiries regarding the client’s testamentary capacity without concerns about the interests of others. The decision as to testamentary capacity, which is a difficult one for the solicitor, should not be made more difficult by the unnecessary extension of duties to others. Concerns about lawsuits brought by beneficiaries under prior wills could create the danger that solicitors would decide against the testator’s interest in determining capacity, where any doubt arose as to testamentary capacity and previous wills existed. Solicitors may be reluctant to act for elderly testators who wish to change provisions of their will, if they may also be liable for damages to beneficiaries under previous wills.”29
Breach of professional ethical dutyThe Ford decision indicates that a lawyer is not only at risk
of civil liability if he or she acts without the due diligence required of a reasonably competent lawyer in the assessment of capacity30: he or she may be in breach of ethical professional duties, which render him or her liable to penalty, costs, and even compensation to an aggrieved party.31 The Ford decision concerned a lawyer failing to act competently in assessing whether his client had capacity to make an enduring power of attorney. The decision is discussed in detail below.32
Court’s new jurisdiction to make wills for those lacking testamentary capacity
The Supreme Court was given this new jurisdiction under the 2006 amendments to the Succession Act (sections 21-28). Victoria, South Australia and the United Kingdom have had a similar jurisdiction for some time. The De Gois v Korp case mentioned above illustrates the pressing need for the jurisdiction.
The jurisdiction has been particularly utilised in cases where a person has never had capacity, such as a child severely brain damaged through medical negligence at birth or through injury in childhood.33 In these cases the child often has substantial assets resulting from a damages award through successful action for negligence. A number of cases have involved situations where a parent (usually the mother) has foregone paid employment to care for such child (and other siblings); the parents divorced; the mother (with few assets and minimal employment income or superannuation) applies to the court to have a will made for the child in her favour (there is also jurisdiction to make a will for a minor), such will to supplant the operation of the intestacy rules – often the evidence is the child is likely to die before reaching 18 years or within a few more years. Naturally if the intestacy rules operate then the parents will share the estate equally. Sadly in one Queensland case which was due to be heard this year, the child died shortly before the matter could be heard.34 Those acting for plaintiffs in personal injury litigation where large damages awards are made to clients who do not have testamentary capacity, such as birth and brain injury cases, should now consider whether it is appropriate to advise of the possibility of an application to the court to exercise its
jurisdiction to make a will for the client. Some other cases where an application might be made
include where:A willed gift adeems – for example when a house willed •to a carer daughter was sold and under the existing will, she would have shared equally in her mother’s residuary estate with her siblings – statutory will was made giving the carer daughter half the estate, the other half being divided equally between the siblings.35
A beneficiary develops a special need or there is a •change in the nature of the relationship between the would-be testator and beneficiary36 - perhaps to be utilised where a child develops a special need through injury or the relationship with the parent changes due to reconciliation with parent or mutual understanding.A beneficiary predeceases the testator – who is now not •in a position to make a new will – unless the testator if competent could have intended that the intestacy rules were to govern such situation.37 A person provides exceptional care and support which •might have been recognised in a will, if the patient were competent.
It is unlikely the court will approve a will to equalise benefits amongst siblings on the basis of lifetime benefits given to one child.38
One issue that arises in the cases is whether the court in fashioning a will must step into the shoes of the patient, that is adopt a subjective approach or whether the court assumes an objective approach (that of an ordinary reasonable person). There have been questions raised by the various wordings of the relevant provisions. But the issue is pretty much “splitting hairs”. Generally the courts take a subjective approach and try to step into the shoes of the patient and fashion the will the patient would have made if lucid.39 Nevertheless, there is an inevitable element of objectivity; the court also looks to what “a normal decent person … acting in accordance with contemporary standards of morality”40 would do in the circumstances. The subjectivity of the test to be applied, with some potential objectivity, is recognised by the wording of the Queensland section 24(d): “the proposed will ... is or may be a will that the person would make if the person had testamentary capacity”.
Capacity to make an enduring power of attorney and capacity in other contexts
The definition of capacity to make an enduring power of attorney41 or when an adult is unable to make his or her own decisions appears42 to be regulated by the same definition of capacity in the Powers of Attorney Act and the Guardianship and Administration Act.43 The definition of “capacity” is set out as follows:
“Capacity”, for a person for a matter, means the person is capable of –
(a) Understanding the nature and effect of decisions about the matter; and
(b) Freely and voluntarily making decisions about the matter; and
(c) Communicating the decisions in some way.As with testamentary capacity, it is clear that “capacity” in
this context is task-specific; capacity is to be tested in accord with the task or matter to hand – this is made explicit in s 5(c) of the GAA, which notes that capacity of an adult with impaired capacity to make decisions may differ according to:
(i) the nature and extent of the impairment; and(ii) the type of decision to be made, including, for example,
the complexity of the decision to be made.The first limb of capacity, “understanding the nature
and effect of decisions about the matter”, is very similar
17 – December 2008
to the first limb in Banks v Goodfellow. However s5(c) (iii) GAA makes clear that a factor relevant to capacity to make decisions is “the support available from members of the adult’s existing support network”. The relevance of a support network to ability to understand the nature of a will and its effects is not something that has been alluded to in cases of dubious testamentary capacity, although it seems a factor that may be particularly relevant – supportive explanation may enable understanding, where without such explanation it may be absent.
The second limb of capacity, “freely and voluntarily making decisions about the matter”, finds no expression in the Banks v Goodfellow test of testamentary capacity. The Banks v Goodfellow continues:
no disorder of the mind shall poison his affections or •pervert his sense of right, andno insane delusion shall influence his will in disposing •of his property.
Whether a person can “freely and voluntarily make decisions about a matter” is a much wider concept than making a will with a disordered mind. Indeed it is probably wider than the probate doctrine of undue influence, which if proven will invalidate a will where the will maker is subjected to coercion in the making of a will – coercion is practically impossible to prove under existing doctrine. The concept of “freely and voluntarily making decisions about a matter” probably involves the ability to make independent decisions free of influence, even in cases where the influencing party could not be said to be acting improperly.
Although in s41 PAA a principal’s capacity to make an enduring power of attorney is limited to understanding the nature and effect of the enduring power of attorney, which includes understanding a range of matters about the power of attorney as delineated by s41 (2), it is thought (though the matter is not entirely free from doubt)44 that the general definition of “capacity” in sch 3 of the PAA (the same definition as in sch 4 GAA Act) is equally relevant to capacity under the PAA.45 An alternative view is that capacity to make an enduring power of attorney is only regulated by s41, that is, a principal’s capacity is limited to understanding the nature and effect of the enduring power of attorney and the matters directed for consideration by s41(2).46 On the other hand, if “capacity” is understood by reference to the general definition of capacity in sch 3 PAA, the very wide concept of the ability to “freely and voluntarily making decisions about a matter” is equally applicable to capacity to make an enduring power of attorney.
Not only must a principal understand the range of matters directed for consideration under s41(2) PAA, but further a witness to an enduring power of attorney (frequently the lawyer who draws the document) must certify that the principal appeared at the time to have capacity necessary to make the document, s44(4) PAA. The matters which the principal must understand are as follows:
Principal may specify or limit the power•When the power begins•Once power for a matter begins, the attorney has power •and full control over the matter subject to terms in the EPAPrincipal may revoke the EPA at any time the principal •is capable of making an EPA giving the same powerThe power continues even if the principal becomes a •person who has impaired capacityAt any time the principal is not capable of revoking the •EPA, the principal is unable to effectively oversee the use of the power
It was in the application of s41(2) PAA that the solicitor in the Ford decision was considered to have not met the appropriate standard of professional conduct. Justice Fryberg considered that “the most striking example of that lack of care
and attention is to be found in the form of Power of Attorney which he took with him. That document had been prepared by Mr Ford’s secretary and she had left the paragraphs dealing with the actual appointment of the attorney incomplete.”47 In particular, various boxes dealing with the details of the appointment of the attorney were not ticked, and boxes which related to whether client understood the specific matters listed above were also left unticked. As Fryberg J said:
“When that was drawn to Mr Ford’s attention, it is fair to say he candidly admitted the omissions created in his mind doubts about whether he had, in fact, gone through each of the matters in the power of attorney with Mrs Adams.”48
The tribunal noted the Queensland Law Society has prepared guidelines for solicitors witnessing enduring powers of attorneys that draw specific attention to the matters noted above and to the importance of the interview process and, in particular, the questioning technique that should be used as a matter of good practice, that is, the use of open-ended questions rather than close-ended questions.49 The practitioner was unaware of the difference between open-ended and close-ended questions and failed to keep a record of all steps taken in assessing his client’s competence as contemplated by the guidelines.
Other relevant factual considerations in the case included that the practitioner was preparing a will and enduring power of attorney for an elderly client in a nursing home. The will disinherited her family and was made in favour of a friend who facilitated the arrangement for the new will and enduring power of attorney. The solicitor had been told quite shortly prior to the making of the will and enduring power of attorney by a nurse that the client had cognitive impairment and memory loss. Further, a family member had a few months previously given the practitioner instructions to register the existing enduring power of attorney in her favour (it had been prepared years previously) as the client had dementia and was unable to manage her own affairs. When asked to prepare the new will and enduring power of attorney, he did not revoke the existing EPA nor give notice to the prior attorney.50 In all the circumstances, the tribunal found that his “conduct in relation to execution of the documents fell short of a standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent Australian legal practitioner.”51
The Ford decision indicates that a reasonably competent lawyer, who is alert to triggers of possible incapacity (for example, elderly client in nursing home; changing radically a will; taking instructions facilitated by a beneficiary; notice of mental condition or dementia), and who acts appropriately where such triggers arise by appropriate questioning, and/or seeking the advice of the patient’s GP in certain cases or specialist advice (particularly in contentious situations where the estate is large) will generally have no reason for concern in respect to breach of professional duty. Indeed, Justice Fryberg said: “Again, I would emphasise that this is an unusual case and it should not be taken as a precedent in any future similar case.”52 It follows likewise there would be no grounds for concern in regard to civil liability.
Lawyers should note, however, the difference in the tests for testamentary capacity and capacity to make an enduring power of attorney. A much higher degree of capacity may be needed to make an enduring power of attorney as compared to a simple will, because s41 PAA requires the client to understand specific matters about the enduring power of attorney and a client needs to be able to “freely and voluntarily make decisions about a matter” to have capacity. The Queensland Law Society guidelines for lawyers in witnessing an enduring power of attorney are helpful to understanding the s41 PAA specific matters and appropriate questioning technique.53
wills and estates QLS Journal
18 – December 2008
ConclusionWith an ageing population matters of “capacity” –
testamentary or otherwise – are of particular relevance to lawyers. The spectre of potential breach of professional ethical duty and/or civil liability for failing to ensure a client has capacity to make a will or enduring power of attorney or is not unduly influenced in the making of a will has been raised by recent cases. Where capacity is dubious lawyers can be assisted by some simple risk management strategies:
Exercise vigilance in taking instructions; ideally •having a face-to-face meeting with the client on his or her own or at least provide an opportunity for private instructions.Carefully document instructions, and in some cases •consider having an additional witness to the giving and taking instructions.Consider the involvement of medical staff for an opinion •as to capacity, but the nature and complexity of will and assets and surrounding circumstances will indicate what level of expertise should be sought. Generally a patient’s GP will be the best source, but sometimes an expert opinion may need to be sought. What can or should be done will also depend on the urgency with which a will is to be prepared and whether there is a radical (and perhaps) unexplained change compared to a previous will.Where the client is in hospital or a nursing home, •consider liaising with nurses or other medical staff for give practical advice on the optimum time to take instructions or execute a will to ensure capacity.Where there is a radical change in instructions for •a new compared to a previous will, question the will maker as to the reasons and maintain notes.
Carefully document the scope and limits of your retainer, •particularly where the client and other family members present with instructions. Be mindful of professional rules and conflicts of interest if it can be said that you are acting for more than one client. Consider if it is appropriate for the client or other family members to take independent advice.
Notes1 Succession Act 1981 (Qld) s92 (1870) LR 5 QB 549 at 565.3 See Tu v Estate of Tu [2008] NSWSC 458 at [44]4 [2008] LPT 12, available online at http://www.lsc.qld.gov.au/Documents/FordLPT08-012.pdf, accessed 7 November 20085 Ibid at 236 Ibid at 24-25. Having decided not to impose a pecuniary penalty in the circumstances of the case before him, His Honour noted that it should not be assumed to mean that no penalty would be imposed in subsequent cases. He said: “I would emphasise that this is an unusual case and it should not be taken as a precedent in any future similar case.”: see Fryberg J at 26; 25.7 Geesche, Jacobsen ‘Degeneration of a life and death’ Sydney Morning Herald 20 June 2008 http://www.smh.com.au/news/national/degeneration-of-a-life-and-death/2008/06/19/1213770827401.html; Souter, Fenella ‘His life in her hands’ Melbourne Age Good Weekend 2 August 2008.8 For a discussion of a recent decision relating to the application of the forfeiture rule see: T. Cockburn ‘Application of Forfeiture Rule in cases of mental illness’ (2006) 8 (10) Retirement and Estate Planning Bulletin 1479 ‘Lawyer unaware of client’s dementia before new will drafted’ AAP 21 May 2008. 10 Ibid.11 Angus Hohenboken ‘Manslaughter Ruling over euthanasia’ 20 June 2008, http://www.theaustralian.news.com.au/story/0,25197,23892564-23289,00.html12 Hayes v Hayes [2008] QSC 6; noted by Caite Brewer in (2008) June Proctor 15-16.13 Ibid.14 [2005] VSC 32615 See discussion related to notes 42, 44 and 45 below.16 Tu v Estate of Tu [2008] NSWSC 458; Grynberg v Muller; Estate of late M Bilfield [2001] NSWSC 532.17 (1870) LR 5 QB 549 at 565.18 White v Jones [1993] 3 All E R 481; Strange v Redmond (2001) QDC 356.19 Worby v Rosser [2000] PNLR 14020 Ibid per Chadwick LJ at [25], per Peter Gibson at [29].21 Public Trustee v Till [2000] 2 NZLR 508 – here the court suggested in obiter that liability for negligence might be found where reasonably competent practitioner ought to have been aware of circumstances which suggested testamentary incapacity. See Angela Cornford-Scott, ‘The Insurer’s Perspective: 10 common claims in Succession law practice’ QLS Succession Law Conference 2008. 22 Estate of Neil Marshall Adam; Sharp v Adam & Anors[2006] EWCA Civ 449; see paper by Richard Neale, ‘Testamentary Capacity – An English Perspective’ QLS Succession Law Conference, October 2007, Brisbane.23 See below note 20.24 For some practical suggestions see: Sue Field “Assessing Mental Capacity” (2008) 86 Precedent 45
25Sharp v Adam [2006] EWCA Civ 449 at [96] citing Lord Cranworth at (1857), 6 HLC 3 at 45; see paper by Richard Neale, ‘Testamentary Capacity – An English Perspective’ QLS Succession Law Conference, October 2007, Brisbane at end of paper.26 [2006] EWCA Civ 446 at [27]27 Ibid.28 (2004) 243 DLR (4th) 61.29 Ibid at [30] per McFadyen JA.30 Rules one and two, Legal Profession (Solicitors) Rule 2007 (Qld)31 Chapter four Legal Profession Act (Qld) 200732 See capacity to make an enduring power of attorney.33 See Hoffman v Waters [2007] SASC 273.34 Thanks to Paul Gleeson who advised Barbara Hamilton of this matter, which was conducted by his firm, Gleeson Lawyers.35 Re D(J) [1982] Ch 327.36 Hill v Hill [2001] VSC 83.37 Boulton v Sanders & Ors [2004] VSCA 112 (where Ms Sanders made a new will relatively frequently and often changed her mind. Dodds-Streeton AJA said at [133]: “Given the degree of change between the various wills, I am not persuaded that there is any compelling pattern which establishes, on the balance of probabilities, that the proposed will accurately reflects Ms Sanders’ likely intentions.”)38 Re Fletcher ex parte Papaleo [2001] VSC 10939 Re D(J) [1982] Ch 327 per Megarry J at 243-244.40 Re C(a patient) [1991] 3 All E R 86 per Hoffman J 41 See s 41 PAA.42 The matter is no entirely free from doubt, see notes 44 and 45 below.43 Sch 3 PAA and sch 4 GAA.44 See Lindy Willmott, Ben White and Michelle Howard, ‘Refusing Advance Refusals: Advance Directives and Life-Sustaining Medical Treatment’ (2006) 30 MULR 211 at 218.45 Re CAB [2007] QCAAT 23; Re HAA [2007] QCAAT 646 Ibid at 218 n 51.47 Legal Services Commissioner v Ford [2008] LPT 12 at p 17 [30] – [40]48 Legal Services Commissioner v Ford [2008] LPT 12 at p18 [10]49 Ibid at p20. See generally P Darzins, DW Molloy, D Strang “Who can decide? The six step capacity assessment process” (2000). The recent QLS Succession Law Conference October 2008 featured a session by one of the authors, specialist geriatrician, Dr Peteris Darzins, on how to assess capacity and the appropriate questioning technique, ‘Professional Skills – the 6-Step Capacity Workshop with Dr Peteris Darzins’.50 s 46 PAA Act (1988)51 Legal Services Commissioner v Ford [2008] LPT 12 at p23[1]52 Ibid at p2653 QLS, Public Information, Enduring Power of Attorney
wills and estates QLS Journal
Barbara Hamilton is a lecturer at the QUT Faculty of Law.
Tina Cockburn is a senior lecturer at the QUT Faculty of Law.
International Psychogeriatrics (2009), 00:0, 1–7 C! 2009 International Psychogeriatric Associationdoi:10.1017/S1041610209008874 Printed in the United Kingdom
Contemporaneous assessment of testamentary capacity.........................................................................................................................................................................................................................................................................................................................................................................
Kenneth I. Shulman,1 Carmelle Peisah,2 Robin Jacoby,3 Jeremia Heinik4 andSanford Finkel5 for the IPA Task Force on Testamentary Capacity and Undue Influence1Department of Psychiatry, Sunnybrook Health Sciences Centre, University of Toronto, Ontario, Canada2Academic Department for Old Age Psychiatry, Prince of Wales Hospital, and University of New South Wales, Sydney, Australia.3Department of Psychiatry, Section of Old Age Psychiatry, University of Oxford, The Warneford Hospital, Oxford, U.K.4Margoletz Psychogeriatric Center, Ichilov Hospital, Tel Aviv, and Sackler Faculty of Medicine, Tel Aviv University, Tel Aviv, Israel5University of Chicago Medical School, Wilmette, Illinois, U.S.A.
ABSTRACT
Background: Challenges to wills on the basis of lack of testamentary capacity and/or undue influence arelikely to increase over the next generation. Since contemporaneous assessment of testamentary capacity canbe a powerful influence on the outcome of such challenges, there will be an associated increase in requestsfor expert assessment of testamentary capacity. There is a need to provide such potential experts with theknowledge and guidelines necessary to conduct assessments that will be helpful to the judicial system.
Methods: A subcommittee of the International Psychogeriatric Association (IPA) task force on “TestamentaryCapacity and Undue Influence” was formed to establish guidelines for contemporaneous assessment oftestamentary capacity.
Results: The task-specific criteria for testamentary capacity as outlined by Lord Chief Justice Cockburnin the well-known Banks v. Goodfellow case are described. Additional issues are identified for probingand documentation. This is designed to determine whether the testator can formulate a coherent, rationaltestamentary plan that connects his/her beliefs, values and relationships with the proposed disposition of assets.Rules of engagement by the expert assessor are defined as well as an approach to the clinical examination fortestamentary capacity resulting in a clear and relevant report.
Conclusion: Guidelines for experts who are asked to provide a contemporaneous opinion on testamentarycapacity should help to inform disputes resulting from challenges to wills. A consistent clinical approach willhelp the courts to make their determinations.
Key words: will challenges, expert assessment
Introduction
A subcommittee of the International Psychogeriat-ric Association (IPA) Task Force on TestamentaryCapacity and Undue Influence undertook toestablish guidelines for expert assessment ofcontemporaneous testamentary capacity. Thispaper focuses on the contemporaneous assessmentof testamentary capacity by an “expert clinician”.“Contemporaneous” or “lifetime” assessmentrefers to the assessment of a testator/testatrix(hereafter referred to as testator) while alive and inclose temporal proximity to the execution/signingof the will. Implicit is the assumption that a lawyer,
Correspondence should be addressed to: Dr. K. I. Shulman, Department ofPsychiatry, Sunnybrook Health Sciences Centre, 2075 Bayview Avenue,Toronto, Ontario, M4N 3M5, Canada. Phone: +1 416 480 4079; Fax:+1 416 480 6022. Email: [email protected]. Received 17 Dec2008; revision requested 07 Jan 2009; revised version received 14 Jan 2009;accepted 15 Jan 2009.
family member or testator has made a preliminarydetermination that the presumption of competencemay be overruled when the will is brought forprobate after the death of the testator. An expertopinion may be sought because of (1) suspiciouscircumstances (Hull and Hull, 1996) – such as asignificant change from previously expressed wishesor inconsistency in the distribution of assets by atestator executing multiple wills; (2) preliminaryevidence of a concurrent mental, neurologic orserious medical disorder; or (3) anticipation ofa possible challenge to the will by an aggrievedpotential beneficiary or beneficiaries; or (4) veryadvanced age. In the majority of circumstances, thefinding of diminished capacity is determined outsideof the court room by clinicians, attorneys and otherswho work with older adults (Moye and Marson,2007). Settlements may be reached on the basis ofexpert reports but a small minority of cases proceedto trial.
1
2 K. I. Shulman et al.
Contemporaneous assessment presents specialopportunities not afforded by the more commonretrospective or “post-mortem” assessment whichhas been addressed elsewhere (Shulman et al.,2005) and is being addressed by a separate IPAsubgroup. As opposed to extrapolating from indirectevidence or interpreting the assessment of otherclinicians, the clinician-expert in this circumstancehas the opportunity to directly examine and probespecific issues related to the legal concept oftestamentary capacity as defined below. Champine(2006) has highlighted the powerful influence of a“lifetime” or contemporaneous assessment whichalmost always carries the day in will disputes.This growing awareness from a societal and legalperspective is likely to increase the frequencyof requests for contemporaneous assessments oftestamentary capacity. This is reflected in recentreviews of legal and clinical aspects of testamentarycapacity (Spar and Garb, 1992; Marson et al.,2004; Marson and Hebert, 2005; Peisah, 2005;Shulman et al., 2005; 2007; Champine, 2006;Jacoby and Steer, 2007; Posener and Jacoby, 2008).Adding to the pressure for more challenges is thefact that the largest transfer of wealth in humanhistory from the Second World War cohort tothe baby-boomer generation is about to occur(Havens and Schervish, 2003). The increasinglycomplex nature of modern families with multipleallegiances compounded by the high prevalenceof dementia and cognitive impairment in olderadults suggests that challenges to wills on thebasis of lack of testamentary capacity and/or undueinfluence is ripe for a dramatic increase over the nextgeneration.
Although testamentary capacity is a legal conceptdetermined ultimately by the court, the decisionmay be informed by expert medical or psychologicalopinion. Moye and Marson (2007) have highlightedthe need for increased education for clinicianswho may be asked to help the courts in suchdeterminations in the coming years. In the U.K.,Mr. Justice (later Lord) Templeman formulatedthe “golden rule” in which medical practitionersare recommended for the assessment of aged orseriously ill testators (Kenward v. Adams, 1975):
In the case of an aged testator or a testator whohas suffered a serious illness, there is one goldenrule which should always be observed, howeverstraightforward matters may appear, and howeverdifficult or tactless it may be to suggest thatprecautions be taken, the making of a will by sucha testator ought to be witnessed or approved by amedical practitioner who satisfied himself of thecapacity and understanding of the testator, andrecords and preserves his examination and finding.
However, Jacoby and Steer (2007) havehighlighted some potential problems associatedwith such a recommendation. Many clinicianslack the knowledge and skills necessary for theassessment of testamentary capacity. One of theoverriding principles for giving expert opinionenshrined in some expert codes of conduct (e.g.in Australia, the Uniform Civil Procedure Rules(Amendment No. 12) 2006, under the CivilProcedure Act 2005, New South Wales) is theimportance of providing opinion only within one’sarea of expertise. This applies not only to clinicalknowledge but to medico-legal expertise. Theassessment of testamentary capacity is a highlyspecialized area of expertise and should be reflectedin the credentials of the expert assessor (see below).Potential expert assessors need to be educated aboutthe legal and clinical issues relevant to testamentarycapacity. It is hoped that growing awareness willlead to more contemporaneous assessments byqualified experts and provide a more objectiveopinion for the court to consider than a retrospectiveassessment after the testator has died. This paper isan attempt to provide consensus guidelines for suchassessments.
General principles of capacity assessment
The tension in all capacity assessments is theconflict between two ethical principles, autonomyor self-determination versus beneficence or the needto support and protect vulnerable individuals (Berget al., 2001). A prime goal of capacity assessmentis to facilitate the involvement of competent olderadults in important and meaningful processes suchas will-making, while identifying those who lackcapacity and protecting them and others from theconsequences of impaired decision-making. Thetwo fundamental components of any mental capa-city assessment are (i) an understanding of relevantfacts and (ii) an appreciation of the consequencesof taking or not taking specific actions.
Like all capacities, testamentary capacity is task-specific and is not determined only by the presenceof a mental disorder or cognitive impairment. Banksv. Goodfellow (1870) is the English case thatunderpins most legal discussions of testamentarycapacity. The testator John Banks suffered froma major mental disorder resulting in his “beingconfined as a lunatic.” Nonetheless, the courtdetermined that Banks’ delusions did not influencethe disposition of his assets, and thus he wasconsidered capable of executing a will. Most Anglo-American jurdisdictions base their legal criteria fortestamentary capacity on Banks v. Goodfellow (seebelow).
Contemporaneous assessment of testamentary capacity 3
Figure 1. Cognition, Emotions and Situation Specific Capacity. (Adapted from Shulman et al., 2007)
Not as well recognized or defined is the“situation-specific” nature of all capacities (Shul-man et al., 2007). Figure 1 outlines the relationshipbetween complexity of the milieu or environmentof the testator and his/her emotional stability orcognitive function. The greater the complexityand conflict within a testator’s environment, andthe greater the complexity of the will itself, thehigher the level of cognitive function or emotionalstability necessary to be considered capable. Whilethe task-specific aspects of testamentary capacityform the basis of an assessment, they must beunderstood within the situation-specific milieu ofthe individual testator. Standardized assessmentinstruments must be interpreted within this context.In one individual, a certain level of cognitiveimpairment or neuropsychological dysfunction maynot interfere with testamentary capacity, but in acomplex or conflictual milieu or complicated will,the same level of impairment or vulnerability maycompromise that individual’s ability to understandor appreciate relevant issues (Figure 1).
Task-specific criteria for testamentary capacity
Table 1 outlines the criteria of Lord ChiefJustice Cockburn in the Banks v Goodfellow case.
In some American jurisdictions the criteria fortestamentary capacity are identical or similar toBanks v Goodfellow, with the exception that thedoctrine of insane delusion is distinct from generaltestamentary capacity. In this way, it is possiblefor a testator to have testamentary capacity butsuffer from an insane delusion that invalidates thewill (American Law Institute: Restatement of theLaw, Third: Property [Wills and Other DonativeTransfers]. Philadelphia: American Law Institute,2003, section 8.1).
One of the fundamental criteria of Banks v.Goodfellow is knowledge of the extent of one’sassets. Does the preoccupation with the extentof the testator’s assets appear misguided? It hasbeen suggested that the testator only requiresknowledge of the “general extent” of his assetsand in some countries there have been caseprecedents for a relatively lowered threshold forasset knowledge (Sprehe and Kerr, 1996; Peisah,2005). For example, one can lack knowledge ofthe specifics or even the extent of one’s assetsbut theoretically retain capacity. As long as atestator knows that he wants to leave the assetsin a specific proportion for reasons that areclear, rational and consistent, then he might beconsidered capable. Another opportunity afforded
Table 1. Banks v Goodfellow criteria
1. Understanding the nature of the act of making will and its consequences.2. Understanding the extent of one’s assets.3. Comprehending and appreciating the claims of those who might expect to benefit from the will, both
those to be included and excluded.4. Understanding of the impact of the distribution of the assets of the estate.5. That the testator is free of any disorder of mind or delusions that influence the disposition of assets.
4 K. I. Shulman et al.
by a contemporaneous assessment is that theassessor may be able to help the testator understandthe extent of his estate in order for him toretain the information long enough to demonstratethat he can make a rational decision about itsdistribution (Spar and Garb, 1992). As long asthe expert assessor notes the process by whichthis information was determined, the court is thenin a position to determine whether this is validfrom a legal perspective. Of course, a complexproportional or fractional distribution may requiremore understanding of assets. Moreover, it is almostalways true that the need for formal assessmentof contemporaneous testamentary capacity is inthe context of a complex or conflictual milieu.In anticipation of a challenge to the will froman aggrieved potential beneficiary, the specifics oftestator’s assets and the impact of their distributionare important considerations.
Additional issues specific for testamentarycapacity were identified by Shulman et al. (2007).The following areas for probing and documentationare designed to assess whether the testator canformulate a coherent plan that connects hisbeliefs, values and relationships with the proposeddistribution of assets:
• the rationale for any dramatic changes or significantdeviations from the pattern identified in prior willsor previous consistently expressed wishes regardingdisposition of assets.
Does the lack or recall of knowledge of prior willsautomatically make a testator incapable in order todetermine capacity? A testator should be able toshow an awareness of his or her previous beliefs,values and wishes in order to provide a rationalefor the latest will. This can serve to reinforcea consistency of thinking with respect to assetdistribution. Similar to the issue of knowledge of theextent of assets, in a contemporaneous assessment,the assessor may help the testator to recall priorwills. In the case of a significant change from priorwill(s), the assessor must determine whether thetestator is able to explain why his testamentarydispositions are to be changed and furthermoredetermine whether or not the changes are beingmade on the basis of a delusion or disorder ofmind.
• the testator’s understanding and appreciation of anyconflicts or tensions in his or her environment;
• the appreciation of the consequences and impactof a particular distribution, especially if it deviatesfrom or excludes “natural” beneficiaries, such asclose family members or spouses;
• clarification of concerns about potential beneficiar-ies who are excluded from the will or bequeathedlower amounts than might have been expected –
specifically ruling out the presence of a delusion,overvalued idea or cognitive impairment thatinfluences the distribution;
• evidence of behavioral or psychiatric symptoms atthe time of the execution of a will, for example,behavioral and psychological symptoms of dementiasuch as apathy, agitation, impulsiveness, disinhibi-tion, aggression, hallucination and delusions; and
• evidence of an inability to communicate a clear,consistent wish with respect to the distributionof assets; for example, frequent will changes aresometimes made in a desperate attempt to garnercare, support, or comfort at a time when the testatorfeels increasingly vulnerable or threatened.
Rules of engagement
Ideally, the assessment of testamentary capacityshould take place in close temporal proximityto the giving of instructions for the will by thetestator. Prior to undertaking a formal assessmentof testamentary capacity, expert clinicians areencouraged to establish clear ground rules forthe assessment. Experts should: (i) determinewhether they have sufficient expertise to providean assessment including adequate knowledgeof relevant medico-legal literature related totestamentary capacity; (ii) clarify who is requestingthe assessment, i.e. the lawyer or the client; (iii)clearly identify retainer and hourly fees definedby the usual and customary fees of the localjurisdiction; (iv) clarify who is responsible for thepayment of fees (lawyer versus client); and (v) agreeon clear expectations regarding possible actionsresulting from the preliminary review, e.g. a verbalor written report.
The following materials (where available) shouldbe reviewed by the assessor prior to the clinicalassessment of the testator:
• prior will(s);• the specific will in question or multiple wills in
question;• a list of the testator’s assets from a corroborative
source;• medical records and reports;• residential care notes;• community care notes.
At the outset of the assessment, the expertassessor should establish the testator’s under-standing of the nature of the assessment, itspotential consequences and obtain his/her consentto proceed. There is no consensus as to whetherthis should be signed or verbal only. In additionto the assessment of the testator directly, itis preferable to interview an objective observer(relative or friend) keeping in mind that thereare often conflicts of interest involved in such
Contemporaneous assessment of testamentary capacity 5
relationships. The interview of the observer shouldtake place independent of the clinical assessment ofthe testator and vice-versa.
Clinical assessment for testamentary capacity
The clinical assessment should include the usualfeatures of a medical and psychiatric history, mentalstatus and cognitive examination as well as thespecific issues relevant to testamentary capacityas defined above. Ideally, the assessment shouldestablish a provisional diagnosis or diagnoses forthe purpose of supporting the opinion of theexpert. Ultimately, the clinical examination shouldbe linked to the testator’s capacity to meet thespecific elements of testamentary capacity. Often, asingle interview is adequate. However, an importantadvantage of contemporaneous assessment is theability to conduct more than one interview inorder to establish the consistency of the testator’swishes, rationale and level of cognitive function.This is relevant in clinical conditions that fluctuateor individuals who have made multiple changes intheir wills.
HistoryThis should include family, personal, medical andpsychiatric history designed to support a provisionalclinical diagnosis and personality profile. History-taking should also identify prior values and beliefsas they relate to estate distribution. It should includea review of the testator’s recollection of prior willsor codicils.
Mental status and cognitive examinationThis should follow the usual features of amental status examination and include: appearance,speech, behavior, mood, thought process, thoughtcontent (including evidence of delusions orhallucinations with specific reference to anyparanoid ideation) as well as insight into anyidentified mental or cognitive disorder. The detaileddescription of the testator’s thought content isimportant as it relates to the legal concept of“insane delusion.” Specifically, the nature of anysuspicious beliefs or frank delusions should bedocumented as well as the extent to which theyare firmly held. Can the testator express wishesclearly and consistently? Can the testator establisha rational and logical connection between his/hervalues, beliefs, relationships and the disposition ofhis/her assets?
Mental status and cognitive examination shouldinclude an assessment for sensory or language
impairment (dysphasia) which can profoundlyaffect the perception of capacity. If necessary,alternative means of communication need to beestablished to determine whether comprehension orcommunication is the primary deficit. More formaltesting can include cognitive screening instrumentssuch as the Mini-mental State Examination(MMSE; Folstein et al., 1975) or the clockdrawing test, while frontal/executive tests mayinclude verbal fluency, abstraction, the three-step Luria test, go-no-go test and the frontalassessment battery (FAB) as well as other validatedscreening tests (Shulman and Feinstein, 2006).The expert assessor should ensure that thesetests are culture specific whenever possible. Age,education, premorbid intelligence and languageare potential confounders when assessing theresults of formal cognitive instruments. A detailedneuropsychological assessment is not essential butcan be helpful in correlating deficits in cognitionto the disposition of the will. It may be usefulfor the expert to correlate the neuropsychologicalfindings on specific tasks to an individual’s capacityin order to support an opinion. However, theseneuropsychological findings are not in and ofthemselves definitive. The findings on cognitiveexamination should support the expert’s opinionbased on the specific criteria of Banks v. Goodfellowas well as the other criteria for testamentarycapacity. In particular, findings on frontal/executivetests may correlate with capacity for abstractthinking, judgment and impulsivity.
Relationship to undue influence
The risk factors for undue influence have beenaddressed in a separate paper by our Task Force(Peisah et al., 2009). While the concept of undueinfluence is inextricably linked to testamentarycapacity, it has been argued that the undueinfluence doctrine allows the courts to maintain arelatively low threshold for testamentary capacityand hence preserve the primacy of individualautonomy so highly valued in Western culture(Frolik, 2001). Undue influence remains a legalconcept determined by the court. Challenges towills commonly include allegations of lack oftestamentary capacity as well as undue influence. Inmost jurisdictions, the testator must be consideredcapable before undue influence can be invoked. Oneof the expert’s roles is to help the court establish theextent of psychological or cognitive “vulnerability toinfluence” that existed at the time of the execution ofthe will in question. Whether influence was exertedat all and whether it was “undue” remains thejurisdiction of the court.
6 K. I. Shulman et al.
Expert opinion and report
While the expert assessor is being asked to renderan “opinion,” it is a clinical as opposed to a legalopinion. The expert’s opinion is one componentof the body of evidence to be considered by thecourt which is the ultimate arbiter of the question:“Did the testator have the task-specific capacity toexecute a will in the context of a situation-specificenvironment?” The judge must weigh other factorsincluding other expert opinions and evidence fromother observers, not necessarily interviewed bythe clinical expert. The judge also takes intoaccount precedent case law, including other judicialprinciples.
The expert assessor can provide the courtwith evidence of a mental disorder or cognitiveimpairment. However, the task-specific nature oftestamentary capacity suggests that the existence ofa mental or cognitive disorder should be considereda “suspicious circumstance” and should not, ipsofacto, lead the expert assessor to the conclusionof incapacity. Nonetheless, the diagnosis helps tosupport the clinical findings of the expert whichmust be linked to the legal criteria for testamentarycapacity.
The expert assessor should qualify his or heropinion as being based on the available factsand should clearly identify the assumptions uponwhich that opinion is based. The implicationis that the clinical opinion may change if thefacts or assumptions relied upon by the clinician-expert are proven to be incorrect. Moreover, thecourts are sensitive to any indication that theexpert has assumed an advocacy role on behalfof the client. Clinical experts must maintain anobjective perspective and understand that anywritten opinions will be challenged under cross-examination or by the judge.
Future considerations
Capacity assessment in the future will crossmany professional disciplines – as exemplifiedby the recent collaboration of the AmericanPsychological Association and the American BarAssociation Commission on Law and Aging (Woodand Moye, 2008). Marson et al. (2004) andChampine (2006) have called for the developmentof a “lifetime” (contemporaneous) assessmentinstrument based on clear legal criteria. However,there are methodological challenges involved inassessing testamentary capacity in a standardizedway. Like many high-level capacities, it is the specificnature of the information and situation extant atthe time of executing a will that determines whether
the testator is capable (Marson et al., 2004). Thedevelopment of capacity assessment instruments islikely to be a major initiative in the future with ashift from a “diagnosis-based” assessment to theconsideration of key functional abilities for specificcapacity domains (Heinik et al., 1999; Grisso,2003). Intact cognitive function and a normalmental state is much more likely to be associatedwith capacity while severe impairment is likely tobe associated with incapacity. In the gray zone, it isnecessary to assess capacity at a situation-specificlevel as this varies among individuals dependingon the complexity of their social and personalmilieu and the implications of their decisionson the lives of others. The extent to which“lifetime” instruments can incorporate situation-specific factors will determine their usefulness asstandardized instruments. However, standardizedinstruments provide a template and guideline thatmay allow the court a more consistent approachto testamentary capacity judgments (Champine,2006).
The inevitable increase in challenges to wills onthe basis of lack of testamentary capacity and/orundue influence will result in a parallel increasein contemporaneous assessments. If performedby competent and knowledgeable clinicians suchassessments will provide a more objective and validopinion of capacity and may help to reduce theproportion of cases that proceed to trial. Marsonet al. (2004) conclude that “considerable work mustbe done in areas of theory and model building,instrument development and validation, clinicaleducation and targeted empirical studies.” This isa task that calls for the collaboration of health careprofessionals, the legal profession as well as ethicistsin the hope of providing clearer guidelines for futureexperts who will be called upon to help the courtsmake their judgments.
Conflict of interest
None.
Description of authors’ role
Ken Shulman chaired the subcommittee oncontemporaneous assessment of testamentarycapacity. Carmelle Peisah, Robin Jacoby, JeremiaHeinik, and Sanford Finkel contributed to theintellectual content and revisions of the manuscript.Sanford Finkel is Chair of the IPA Task Force.
References
Banks v. Goodfellow (1870). LR5 QB, 549.
Contemporaneous assessment of testamentary capacity 7
Berg, J. W., Applebaum, P. S., Lidz, C. W. and Parker,L. S. (2001). Informed Consent. Legal Theory and ClinicalPractice. New York: Oxford University Press.
Champine, P. (2006). Expertise and instinct in theassessment of testamentary capacity. Villanova Law Review,51, 25–94.
Folstein, M. F., Folstein, S. E. and McHugh, P. R. (1975).“Mini-mental state”: a practical method for grading thecognitive state of patients for the clinician. Journal ofPsychiatric Research, 12, 189–198.
Frolick, L. A. (2001). The strange interplay of testamentarycapacity and the doctrine of undue influence: are weprotecting older testators or overriding individualpreferences? International Journal of Law and Psychiatry, 24,253–266.
Grisso, T. (2003). Evaluating Competencies: ForensicAssessments and Instruments. New York: Kluwer AcademicPress/Plenum Publishers.
Havens, J. J. and Schervish, P. G. (2003). Why the $41trillion wealth transfer estimate is still valid: a review ofchallenges and questions. Journal of Gift Planning, 7,11–15, 47–50.
Heinik, J., Werner, P. and Lin, R. (1999). How docognitively impaired elderly patients define “testament”:reliability and validity of the Testament Definition Scale.Israel Journal of Psychiatry and Related Sciences, 36, 23–28.
Hull, R. and Hull, I. (1996). Suspicious circumstances inrelation to testamentary capacity and undue influence. InEstates: Planning, Administration, and Litigation (pp. 77–87)Law Society of Upper Canada, Special Lectures. Toronto:Carswell.
Jacoby, R. and Steer, P. (2007). How to assess capacity tomake a will. BMJ, 335, 155–157.
Kenward v Adams (1975). The Times, 29 November.Marson, D. and Hebert, T. (2005). Civil competencies in
older adults with dementia: medical-decision makingcapacity, financial capacity, and testamentary capacity. InG. J. Larabee (ed.), Forensic Neuropsychology: A Scientific
Approach (pp. 334–377). New York: Oxford UniversityPress.
Marson, D. C., Huthwaite, J. and Hebert, K. (2004).Testamentary capacity and undue influence in the elderly:A jurisprudent therapy perspective. Law and PsychologyReview, 28, 71–96.
Moye, J. and Marson, D. C. (2007). Assessment ofdecision-making capacity in older adults: an emerging areaof practice and research. Journal of Gerontology, 62B, 3–11.
Peisah, C. (2005). Reflections on changes in definingtestamentary capacity. International Psychogeriatrics, 17,709–712.
Peisah, C. et al. (2009). The wills of older people: risk factorsfor undue influence (Review). International Psychogeriatrics,21, 7–15.
Posener, H. D. and Jacoby, R. (2008). Testamentarycapacity. In R. Jacoby, C. Oppeinheimer, T. Dening andA. Thomas (eds.), Oxford Textbook of Old Age Psychiatry(pp. 753–760). Oxford: Oxford University Press.
Shulman, K. and Feinstein, A. (2006). Quick CognitiveScreening for Clinicians. Rev. paperback edn. Oxford:Informa Healthcare.
Shulman, K. I., Cohen, C. A. and Hull, I. (2005).Psychiatric issues in retrospective challenges oftestamentary capacity. International Journal of GeriatricPsychiatry, 20, 63–69.
Shulman, K. I., Cohen, C. A., Kirsh, F. C., Hull, I. M.and Champine, P. R. (2007). Assessment of testamentarycapacity and vulnerability to undue influence. AmericanJournal of Psychiatry, 164, 722–727.
Spar, J. E. and Garb, A. S. (1992). Assessing competency tomake a will. American Journal of Psychiatry, 149, 168–174.
Sprehe, D. J. and Kerr, A. L. (1996). Use of legal terms inwill contests: implications for psychiatrists. Bulletin of theAmerican Academy of Psychiatry and the Law, 24, 255–265.
Wood S. and Moye J. (eds.) (2008). Assessment of OlderAdults with Diminished Capacity: A Handbook forPsychologists. Washington, DC: American Bar Associationand American Psychological Association.
CCOONNTTEESSTTEEDD WWIILLLLSS
As our bodies more regularly outlive our minds, increasing numbersof people suffer from dementia, a clinical syndrome arising from anumber of different brain disorders. The Alzheimer's Society esti-mates that there are currently 750,000 people in the UK withdementia (one in five of those over 80 is affected by some form ofdementia) and that this figure will have risen to 870,000 by 2010.
For solicitors preparing wills, testamentary capacity is more ofan issue than ever. Since elderly people, particularly those withintermittent or borderline capacity, can also be extremely vulnera-ble, the question of undue influence is an additional concern.
CapacityThere is no single test for legal capacity: the mental capacityrequired by law is relative to the transaction in question.
The current test for capacity to make a will dates from Banks vGoodfellow [1870] LR 5 QB 549 . This provides that the testator mustunderstand the nature of the act s/he is performing, the claims s/heought to consider and the extent of the property s/he has to disposeof, and shall not be subject to any disorder of the mind as shall “poison his affections, pervert his sense of right or prevent the exer-cise of his natural facilities”.
It was suggested at firstinstance in Sharp v Adams[2005] EWHC 1806 (whichinvolved a testator unable tospeak as a result of advancedmultiple sclerosis whoexcluded his daughters fromhis will) that there is a furtherrequirement – deriving fromDen v Vancleve (1819) 2Southard 589, a case pre-datingbut approved in Banks v Goodfel-low – that the testator must have the mental capacity toarrive at a rational, fair and justwill. However, when dismiss-ing the appeal earlier this year,the Court of Appeal com-mented that they did not thinkthat the trial judge had changedthe law.
Section 2(1) of the MentalCapacity Act 2005 (which comesinto force on 1 April 2007) pro-vides that a person lacks capac-ity if “at the material time he isunable to make a decision forhimself in relation to the matterbecause of an impairment of, ora disturbance in the functioningof, the mind or brain”.
Pursuant to s 3(1) of theMCA, a person is unable tomake a decision if s/he isunable to understand the infor-mation relevant to the decision,to retain that information, touse or weigh that informationas part of the process of makingthe decision, or to communicatehis/her decision.
This test will replace, butdoes not conflict with, the com-mon law tests for capacity,including the Banks v Goodfellowtest (s 2 states that the defini-tion, and therefore the subse-quent test, apply “for the
4 SJFOCUS 13.10.06
elderly client
Testamentary capacity and undue influence: Emily Extonreports on what solicitors should do to avoid wills beingcontested
6 SJFOCUS 13.10.06
purposes of this Act” and in any event the test is largely replicatedby s 3). It is thought that, as cases are heard by judges, they will con-sider the new statutory definition and adopt it if they think fit anduse it to develop common law rules in particular cases.
What does all this mean for the solicitor faced with an elderlyclient?
Often capacity will not be an issue: the elderly client giving clear,consistent and independent instructions is unlikely to be a cause forconcern. However, to minimise the risk of a later challenge, it will beprudent to ensure that sufficient questions are asked to establishthat the various elements of the Banks v Goodfellow test are satisfied -and a careful note taken of the answers!
But where the client appears confused or particularly infirm or,in the case of a longstanding client, unlike his/her normal self, pre-cautions should be taken. The ‘Golden Rule’, first referred to in Ken-ward v Adams , [1975] CLY 3591 is that “the making of a will by [anaged or infirm testator] ought to be witnessed or approved by amedical practioner who satisfies himself of the capacity and under-standing of the testator, and records and preserves his examinationand findings”.
It is important that the medical practioner is carefully advised ofthe test for capacity so that the right points are covered in his/herreport. S/he should have examined the testator and usually havecarried out some form of objective diagnostic analysis (such as theMini Mental State Examination).
Incapacity can be permanent or temporary. Those with dementiamay have lucid intervals and the testator who is anxious ordepressed or confused as the result of infection can get better. Inrelation to wills, the relevant time for assessment of capacity is, inthe vast majority of cases, the time of execution. (The exception tothis is the rule in Parker v Felgate (1883) 8 PD 171.)
The precautions to be taken when dealing with an elderly testa-tor are a matter of judgment for the solicitor who has ultimateresponsibility for assessing capacity, notwithstanding any medicalevidence.
Suggesting to one’s client that one wishes to contact his/her doctorbecause mental capacity may be an issue is not the most tactful thing todo. However, the testator may be placated if it is explained that themedical evidence is merely being sought to prevent the possibility ofany post-death challenge to the will. It may also be worth bearing inmind that we have all got used to insulting our clients by asking themto prove their identity for anti-money laundering purposes; perhapsthe obtaining of medical evidence should be built into the general for-malities applying when taking instructions to prepare a will.
Lack of knowledge and approvalAs well as being sure that the client has capacity to make a will (ie, iscapable of understanding what s/he is doing), the solicitor taking
elderly client
instructions needs to be surethat s/he actually does under-stand what s/he is doing .
Re Sherrington [2005] EWCACiv 326, the case brought by thechildren of lawyer RichardSherrington who left his £10mestate to his second wifeYvonne, follows a trend ofrecent cases suggesting that it isharder to sustain lack of knowl-edge and approval claim wherethe will is simple and the testa-tor has had an opportunity toread it.
Undue influenceThe increasingly elderly popu-lation means that solicitorsmust be alive to the vulnerableclient. Testators are influencedby many things when decidingon the content of their wills, butwhere this influence may gobeyond what is legally accept-able, the prudent solicitorshould consider the following:who is giving the instructions?Is this the client? Are theinstructions being given in thepresence of anyone else whomay be in a position to exertinfluence? Where possible, thesolicitor should speak to theclient alone. Is the client makingchanges to previous wills and, ifso, is s/he able to explain thereasons for the changes? Asolic-itor should refuse to act if s/hesuspects undue influence isbeing exerted.
An undue influence chal-lenge was anticipated by thecoroner recording an open ver-dict in an inquest held earlierthis year following the death offormer model Patricia May.May died aged 66 leaving a£1.5m legacy to the psychiatristwith whom she had apparentlybecome infatuated.
Successfully contesting a willon the ground of undue influ-ence is rare. There are no pre-sumptions in relation to wills(unlike lifetime gifts wherethere is a presumption of undueinfluence where gifts are madewithin certain relationships,including doctor/patient, or
where the gift requires explana-tion which is made to a personin whom the donor places trustand confidence). The key wit-ness (ie, the testator) is nolonger around to give evidenceand the court places a high bur-den of proof on the person mak-ing the allegation.
The solicitors advising thosewishing to contest May’s willshould think carefully.
Claimant’s point of viewFrom a claimant’s point of view,it is worth noting that a success-ful challenge simply removesthe relevant will from the equa-tion. Before contesting it will beworth checking the positionunder the earlier will or on intes-tacy. Costs are a key considera-tion; it is often assumed thatcosts will come out of the estatebut the norm is for costs to beborne by the unsuccessful party.
There are other ways inwhich wills can be contested.For example, it is possible tochallenge a will on the basis thatit has been made in the wrongjurisdiction (this can be signifi-cant where the alternative juris-diction is one involving forcedheirship laws), or by way ofclaim pursuant to the Inheri-tance (Provision for Family andDependants) Act 1975, wherecertain classes of person canargue that they did not get anappropriate share of thedeceased’s estate.
Emily Exton is an assistant solicitor
at Mayfair law firm Forsters LLP
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‘But where the client appears confused or particularly infirm or,in the case of a longstandingclient, unlike his/her normal self,precautions should be taken.’