Testamentary capacity: an update

The High Court recently considered testamentary capacity in Raymond Allen James v. Karen James & others [2018] EWHC 43 (Ch).

Charles James died on 27 August 2012 leaving a Will dated 16 September 2010. He had a wife (Sandra), a son (Sam) and two daughters (Karen and Serena). No provision was made for Sam in Charles’ will and he therefore brought two claims in relation to Charles’ estate:

1. A proprietary estoppel claim; and
2. A claim that Charles’ will was invalid because he did not have the requisite testamentary capacity when he signed it.

Commentary on Sam’s proprietary estoppel claim will follow in the second of this two part series.

Key events

The key sequence of events of the matter was as follows:

• 2004 - Charles instructed solicitors to gift Pennymore Pitt Farm to Sam. Sandra became aware of this and, after challenging Charles, he did not sign the will.
• 2007 – Charles gifted three parcels of land to Karen and transferred bank accounts into his and Sandra’s joint names.
• March 2009 – Charles gifted a parcel of land and his haulage business to Sam. The partnership was dissolved.
• October 2009 - Charles was described as suffering from short term memory loss and “spells of quite profound confusion”.
• November 2009 – Sandra suggested that Charles meet with a solicitor to transfer Pennymore Pitt Farm into his and Sandra’s joint names. The solicitor had some concerns as to whether Charles was completing the transfer of his own volition, but the transfer was made notwithstanding this. A nurse confirmed Charles’ memory problems and confirmed that they dated back to 2006. Charles could no longer manage the farm or drive a car.
• January 2010 - Charles’ medical notes referred to him as having dementia/Alzheimer’s.
• May 2010 – a new solicitor prepared wills for Charles and Sandra. Sandra met with the solicitor without Charles to discuss how she could ensure that her share of Pennymore Pitt Farm passed to Serena. A ‘severance of the joint tenancy’ was required. The solicitor was confident Charles understood everything at the first meeting but thought that he might be under Sam’s influence. Sandra and the solicitor spoke on the telephone five times to finalise the wills. Charles was not involved in this process. No references were made to Charles’ capacity.  
• September 2010 – The solicitor saw Charles and Sandra separately. Charles was reluctant to sign his will as he considered it was pointless to do so. The solicitor then met with Charles and Sandra together and Charles said he would sign the will if Sandra was happy with it. Both wills were then signed. The solicitor said she considered that Charles had the necessary testamentary capacity to sign his will.
• May 2011 - Charles was referred to a mental health team and was diagnosed on 12 May 2011 with “probable moderate dementia with frontal lobe impairment”. Charles did not have “the basic capacity to make decisions about his health care, where he lives or his finances”.

The law

Banks v Goodfellow

The test as to whether a person has the requisite capacity to make a will was set out in Banks v Goodfellow.

Under that test, the testator should understand:

1. the nature of his act and its effect
2. the extent of the property of which he is disposing; and
3. the claims to which he ought to give effect.

The testator must not have a disorder of the mind or insane delusion, which ultimately brings about a disposal of his property which he would not have made if he had been of sound mind.

The decision

Sam argued that Charles lacked testamentary capacity at the time he signed the will and that the will was accordingly invalid. He argued that the test in Banks v Goodfellow did not apply and that the Mental Capacity Act 2005 (MCA) should apply to the will making process.

Upon considering whether the MCA applied, the Judge held that the test in Banks v Goodfellow was the only test of capacity for retrospectively deciding whether someone had capacity to make a will. There are two different tests for mental capacity in making wills, one for a living person and the other retrospective in relation to a will already made.

The Judge also said that the most important evidence of capacity was that which supported what happened on the day Charles signed his will. The will-writer was competent and experienced and, whilst she had not followed the ‘golden rule’ of obtaining a medical opinion, this was only indicative of good practice, not law.

The Judge held that Charles had capacity to make the 2007 and 2009 transfers and satisfied points (a) and (b) of the Banks v Goodfellow test. As for (c):

1. Charles appreciated the balance needed to be equalised between his children;
2. The will was in line with Charles’ instructions provided months previously;
3. Charles did not have many claims to consider;
4. Charles’ estate was a simple one so less understanding was required from him; and
5. The will seemed rational and balanced and took into account the gifts Charles had previously made

Accordingly, Charles had the capacity to make the will.

The case is a worthwhile reminder of the importance of Testator satisfying the test in Banks v Goodfellow and being able to evidence that. It also clears up the issues surrounding the use of the MCS in assessing capacity retrospectively in respect of wills already made. Practioners should be mindful of the weight which can be attached to an experienced solicitor’s evidence; full and contemporaneous notes really are worth their weight in gold.