The current test for testamentary capacity

The Mental Capacity Act (“MCA”) came into force on 1st October 2007. The Act sets out important principles affecting how we should approach decision making with a person with impaired capacity. Interestingly though, it does not apply when capacity to make a Will needs to be determined.

Instead, the relevant test is still that outlined in the case of Banks v Goodfellow (1870), which, in summary, requires the testator to:

  1. Understand the nature of the act (sound mind), so understand that he/she is making a Will and its effects:
  2. understand the extent of the property being disposed of (sound memory);
  3. be able to comprehend and appreciate the claims to which he/she ought to give effect (sound understanding); and
  4. this understanding must not be impaired by any disorder of the mind or delusions.

If the testator is elderly or ill or there are any doubts about their capacity, then case law has established that it is best practice for practitioners to obtain an assessment of capacity from a medical practitioner. This practice is known as the “Golden Rule”.

Proposed changes

The Law Commission Report on Wills published on 13 July 2017 recommended changing the test for testamentary capacity to take into account “the modern understanding of conditions like dementia”. One proposal is to replace the Banks v Goodfellow test with the current MCA test, which is outlined in Sections 1 to 3 of the MCA. Section 2(1) sets out the definition of a person lacking capacity as:

[..] 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.

There are two sections to this test, the inability to make the decision (the functional test) and the impairment or disturbance of the mind or brain (the diagnostic test). Case law has decided that you should consider the functional test first. The MCA test of capacity is also decision and time specific.

So applying this to the decision to make a Will (and the decision as to who can benefit under your Will), the first consideration will be whether the testator is unable to make a decision for him or herself. Section 3(1) outlines the circumstances in which a person is unable to make a decision:

[…] 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; or

(d) to communicate his decision (whether by talking, using sign language or any other means).

Then secondly, if, following the above, it is considered that the testator is unable to make the decision to make a Will, or decide who should benefit from his estate, consideration will need to be given as to whether the inability to make the decision is because of an impairment of or a disturbance in the functioning of, his or her mind and brain.

Why change?

The Banks v Goodfellow test is well known and understood by practitioners and has been applied successfully for a great many years. The Law Commission report cites ambiguities regarding the relationship between parts 3 and 4 of the test and developments in recent case law that make the test unclear. However, the predominant reason is the question as to whether the test is now is appropriate given developments in medicine since 1870. They state that “[...] the test does not reflect the significance of dementia in the context of assessments of capacity”.

The Banks v Goodfellow test and the MCA test are similar, and it is likely that you will achieve the same result through applying each test, in most cases.

One important difference, however, is the need to apply the principles set out in sections 1 and 2 of the MCA when assessing capacity. Under Section 1(2) a person must be assumed to have capacity unless it is established that he or she does not. There is, therefore, a presumption of capacity. It will be interesting to see how this presumption impacts on the “Golden Rule”.

A key advantage of adopting the MCA test is that one test would apply to all decisions. The medical profession is becoming increasingly familiar with the MCA test, which may result in a greater willingness of the profession to undertake testamentary capacity assessments, the assessments may, therefore, be more straightforward, and arguably create more certainty and confidence in a capacity determination.

The rules, which have been in place since the 19th Century are undergoing a thorough review, and a review that many would argue is long overdue.

You can view The Law Commission consultation, which closed on 10 November here.

Further information

For further information about the issues raised in this ebriefing, please contact Lisa Whitehouse.