29 August 2014 #Real Estate
A recent case in the Court of Appeal (Simon v Byford and others  EWCA Civ 280) reviewed the test of capacity for those seeking to make a Will. The Court of Appeal drew a clear distinction between capacity and memory. It held that the test for capacity depended on the potential capacity to understand, rather than memory, and stated that the test for capacity did not extend to unknown or unintended consequences of testamentary dispositions.
The facts of this case were as follows:
The Court of Appeal held that there was no authority that required a testator to understand the collateral consequences of a disposition as opposed to its immediate consequences, nor did they see it as desirable for the law to do so. They found that the testatrix’s ability to fully understand the significance of the disposition of the company shares lay in her ability to understand the shares already held by the other family members. The Court of Appeal held that this was beyond the requirements set out in recognised tests of testamentary capacity, which required the testatrix to understand no more than the extent of her own property – not that of others.
During the hearing the Court of Appeal revisited the test for capacity set out in the old case of Banks v Goodfellow (1870), which is still the common law test of capacity relied upon today for Wills which were signed before 1 October 2007 (the date the Mental Capacity Act 2005 fully came into force). Banks v Goodfellow stated that in order to execute a valid Will, a testator must:
For Wills signed after the Mental Capacity Act 2005 came into force, the Act sets out a two stage test for assessing capacity:
Whenever there are any doubts with regards to capacity, a medical assessment should always be obtained - this is known as the golden rule.