In our practice we do a lot of work around estate planning. Estate planning includes the drafting of a Will or Testamentary Trust, and also encompasses the appointment of a Power of Attorney and Enduring Guardian.
As such, a lot of our clients are elderly or suffering from medical conditions that may affect their ability to understand legal documents, and accordingly make decisions about estate planning.
In relation to wills, lawyers have to make an assessment as to whether or not a person has “testamentary” capacity, that is the mental capacity to understand the nature and effect of a Will and to instruct us to prepare one for them, before the document can be prepared and executed.
The lawyer will need to assess whether:
- The person understands the nature and effect of the document;
- The person has a general understanding of what assets they have;
- The person understands who has a claim on their Estate;
- The person is under any delusion, duress or other influence in making decisions about the estate planning.
A lawyer might also test the person’s memory by asking questions about the person’s life and about current affairs. The purpose of this is to make sure that someone who might be suffering some incapacity as a result of something like dementia, Alzheimer’s, or some other medical condition is not taken advantage of, and to ensure that they are in their right mind when determining who their assets are to pass to after their death.
In circumstances where there may be some question about a person’s capacity, it is helpful for a lawyer to have a letter from the person’s treating doctor or geriatrician confirming that, from a medical perspective, their doctor believes that they have the capacity to understand the nature and effect of their estate planning documents.
If a lawyer determines that the person does not have capacity, then they cannot prepare estate planning documents for that person.
In circumstances where a person has lost capacity, there is no way a Will can be drafted for them. Unless they regain their capacity, any Will they wrote previous to losing their capacity will still be valid, or in the circumstances where they do not have a Will, they will die intestate.
There is however a mechanism to put in place a quasi Power of Attorney or quasi Enduring Guardianship after a person has lost their capacity. This involves making an application to the Guardianship Tribunal to have a financial manager or guardian appointed.
The person making the application will need to provide evidence to the Guardianship Tribunal that the person has lost their capacity to manage their affairs, and that the applicant is an appropriate person who will act in the best interests of the person concerned.