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  • The current approach to assessing testamentary capacity is deficient.
  • The ageing population and complexities of living are creating new challenges and demands, but there is a disconnect between lawyers and doctors in addressing needs.
  • Lawyers and health professionals need to adapt to the new environment by coordinating their planning and development efforts at the national level.

Lawyers and doctors are increasingly taking widely divergent approaches when it comes to the specific task of assessing a person’s decision-making capacity. Simply put, lawyers remain legal while, to borrow a name from ‘oz rock’ recent history, the doctors remain mental as anything. One profession is from Venus, the other is from Mars.

Specific issues arise when assessing decision-making capacity in the legal context where the common law recognises three separate and distinct types of capacity – physical, mental and legal. An example of physical capacity is the ability to see and read documents. Legal capacity can simply be established by having attained a qualifying age such as 18 years of age. This article is confined to addressing mental capacity from the legal viewpoint.

Testamentary capacity

Mental capacity in the legal sense when associated with wills (testamentary capacity) is even more nuanced (see Browne, Darryl ‘Mental capacity: The tests and assessment’ [2018] PrecedentAULA 18; (2018) 145 Precedent 12). Because the law relating to wills developed separately from the common law and equity, the test for mental capacity for a will became more specific than exists with other legal action. An assessment of testamentary capacity is issue-specific, time-specific and content-specific – issue-specific because a person may be found to have capacity to make a will, but not necessarily to enter into all legal transactions; time-specific because the assessment is contemporaneous with the transaction (the making of the will); and content-specific by reference to the complexity of the transaction. 

The modern-day issues and the challenges associated with assessing testamentary capacity have been expertly summarized (Lonie & Purser (2017) ‘Assessing testamentary capacity from the medical perspective’ Australian Bar Review, 44(3), 297-317) as follows: ‘The population is ageing and incidents of mentally disabling conditions are increasing exponentially. Dementia is chief amongst the illnesses that can, and do, affect cognition and legal capacity. The accurate assessment of testamentary capacity is particularly challenging. The (legal) test for testamentary capacity is well-established, having first been articulated in the 1870 decision of Banks v Goodfellow ((1870) LR 5 QB 549) (‘Banks’). Little movement with regard to the content of the limbs in Banks has occurred since the nineteenth century. However, dementia has different markers to psychosis, which was at issue in Banks. Accordingly, dementia presents unique challenges when assessing testamentary capacity in the modern context. Consequently, the legal profession is increasingly seeking out the assistance of health professionals to assess capacity. However, there is a fundamental disconnect between legal and health professionals in assessing innately different, but inherently linked, notions of “capacity”. Legal professionals are assessing the legal requirements necessary to be able to make a decision and/or enter into a transaction recognisable at law. Health professionals are assessing clinical notions of capacity. Legal and clinical capacity are fundamentally different concepts. Legal professionals do not necessarily understand the potential impact of the clinical concept and generally lack the necessary training to satisfactorily assess it. Conversely, legal professionals cannot assume that health professionals can precisely assess legal notions of capacity. The difficulty arises because clinical concepts of capacity are being assessed within an overarching legal framework. This is an especially challenging task given the dearth of information on the effects of the different dementing illnesses on specific legal capacities such as testamentary capacity.’ 

Applying Banks, the legal test for determining if a person has the requisite mental capacity to execute a will, is that the person:

  • is aware, and appreciates the significance, of a will;
  • is aware, at least in general terms, of the nature, and extent,  and value, of his/her estate;
  • is aware of those who may reasonably be thought to have a claim upon his/ her estate, and the basis for, and nature of, the claims of those persons; and
  • has the ability to evaluate, and to discriminate between, the respective strengths of the claims of such persons.

The approach taken by the courts to this date in weighing up the evidence of solicitors attending on will makers against retrospective medical expert evidence was clearly expressed by Hodgson JA (Zorbas v Sidiropoulous (No 2) [2009] NSWCA 197 at [65]) as follows:

‘The criteria in Banks v Goodfellow are not matters that are directly medical questions, in the way that a question whether a person is suffering from cancer is a medical question. They are matters for common sense judicial judgment on the basis of the whole of the evidence. Medical evidence as to the medical condition of a deceased may of course be highly relevant, and may sometimes directly support or deny a capacity in the deceased to have understanding of the matters in the Banks v Goodfellow criteria. However, evidence of such understanding may come from non-expert witnesses. Indeed, perhaps the most compelling evidence of understanding would be reliable evidence (for example, a tape recording) of a detailed conversation with the deceased at this time of the will displaying understanding of the deceased’s assets, the deceased’s family and the effect of the will. It is extremely unlikely that medical evidence that the deceased did not understand these things would overcome the effect of evidence of such a conversation.’

The approach of Hodgson JA was referred to in Craig-Bridges v NSW Trustee and Guardian [2017] NSWCA 197 at [133]  where it was also noted that (at [134]): “That passage has regularly been endorsed, including by this Court in Guthrie v Spence (2009) 78 NSWLR 225; [2009] NSWCA 369 at [196] and by the English Court of Appeal in Simon v Byford [2014] EWCA Civ 280; [2014] WTLR 1097 at [17]”.

A recent case essentially following this approach was Drivas v Jakopovic [2019] NSWCA 218 where the Court of Appeal upheld a first instance decision which had given substantial weight to the evidence of the attending solicitor who had spent an hour and a half with the client taking instructions and finalising the will. His evidence as to his usual practice was preferred over the retrospective evidence of medical experts based on the deceased’s medical records.

Is Banks v Goodfellow still relevant ?

As noted above, the legal approach is fundamentally based on the principles summarised in Banks 150 years ago. But that approach is increasingly coming under question as to its contemporary relevance (see Shulman et al ‘Banks v Goodfellow 1870: time to update the test for testamentary capacity’ (2017) 95 Can Bar Rev 251). Banks was based on an instance of psychosis (most likely schizophrenia in modern terms), the prevalence of which is today far outnumbered by dementia and other forms of cognitive impairment as the basis for will challenges (Shulman et al at [262]).

We are also not dealing with a static societal environment. While the ageing of the population brings with it associated illnesses, particularly those affecting cognition, the transactions necessary for elder living are also becoming no less complex. Our burgeoning numbers of elderly citizens are facing a growing maze of complications in areas such as Centrelink and age pensions, granny flat agreements, retirement villages, nursing home accommodation, and My Aged Care home care support and the making of enduring guardianship and power of attorney appointments. And that list is far from exhaustive. The models for addressing the increasing need for assistance in addressing the complexities of life are, similarly, no less simple.

Another perspective on querying the relevance and adequacy of Banks in modern times was provided as follows: (Purser, Kelly ‘Assessing Testamentary Capacity in the 21st Century: Is Banks v Goodfellow Still Relevant?’ [2015] UNSWLawJl 30; (2015) 38(3) UNSW Law Journal 854): 

‘In assessing the adequacy of the Banks test for modern society, two other issues arise. First, there is a question as to whether the test takes into account the complexity of modern estate planning and testamentary structures. Secondly, when assessments are being conducted there is increasing reliance on medical professionals by legal professionals. This is necessary because mentally disabling conditions, such as dementia, are increasing and each profession has their own specific skill set, neither of which, independently, is enough to satisfactorily assess complex cases where legal capacity is in question. The problem arises because the relationship between the professions is characterised by tension and misunderstanding. This challenge is compounded in this context by questions about the adequacy and application of the test, about the roles of each profession, and about professional liability concerns. Misunderstandings exist as to the very concept that is being assessed and the test that is being applied – not to mention how it is practically being applied. This misunderstanding is further amplified by miscommunication between the professions, both of which can have a negative impact on the assessment, and the autonomy of the individual who is being assessed.’

The role of the legal and medical professions

In assessing testamentary capacity, the relationship between the legal and medical professions remains to this day, as noted by Purser, characterised by tension and misunderstanding. Why is this so? The answer is depressingly simple – because neither profession, as a whole, is specifically trained to address the core issues. We understand where we need to get to. We need to have both professions working towards an outcome where a legal determination or assessment is fully informed and supported by medical information.

The medical profession worldwide is alive to the issue (see, e.g. Brenkel et al ‘A Case for the Standardized Assessment of  Testamentary CapacityCan Geriatr J. 2018 Mar; 21(1): 26–31). The conclusion reached by Brenkel et al was that the medical profession needs to be developing specific clinical tools for the assessment of testamentary capacity. In concert with this development, training programs for geriatric specialists need to incorporate educational initiatives for assessing mental capacities, including the task-specific capacity for making a Will (at [31]).

Here in Australia, the task ahead for the lawyers is far more confronting, particularly when one considers the starting base. The Australian Law Reform Commission (‘ALRC‘) report on elder abuse (Elder Abuse – A National Legal Response (ALRC Report 131)) observed that specific knowledge of succession law is not a compulsory requirement for admission to legal practice in Australia, nor is there any specific requirement for knowledge of the substantive doctrines of succession law and the legal test of testamentary capacity (at [8.83]).

In the context of elder abuse, the ALRC recommended that ‘the Law Council of Australia, together with state and territory law societies, should develop national best practice guidelines for legal practitioners in relation to the preparation and execution of wills and other advance planning documents to ensure they provide thorough coverage of matters such as … the importance of ensuring that the person has “testamentary capacity” – understanding the nature of the document and knowing and approving of its contents, particularly in circumstances where an unrelated person benefits’ (Recommendation 8-1(e)). 

Lawyers can’t just plead inadequacy and refer testamentary capacity issues to the medical profession. We have a duty to build a sound basis for our assessments. (See: Sabatino, ‘Representing a Client with Diminished Capacity: How Do You Know It And What Do You Do About It?’ (2000) 16 Journal of the American Academy of Matrimonial Lawyers 481, 483). ‘Lacking training in capacity assessment or other aspects of mental health, the average practitioner may argue that, as lawyers … we should refer cases of questionable capacity to mental health professionals. The assertion is true as far as it goes, but … [t]o decide whether a formal assessment is needed, the lawyer is already exercising judgment about the client’s capacity on an informal or preliminary level … [E]ven … the incipient awareness that “something is not right,” is itself an assessment. It is better to have a sound conceptual foundation and consistent procedure for making this preliminary assessment than to rely solely on ad hoc conjecture or intuition.’

Clearly, we need a national, co-ordinated approach between the legal and medical professions if any meaningful progress is to be made in this important area. 

John Clarke is Solicitor Director of Clarke Law, Narooma, Bega & Bermagui and a member of the Law Society’s Elder Law, Capacity & Succession Committee.