Testamentary Capacity and the Re Oliver Case

Background

Most people will know that a Will is a declaration made by a person during their lifetime expressing their intentions for the disposal of their property after death. The basis of modern law (the law of succession) is the historical British statute the Wills Act 1837. As for capacity to make a Will (testamentary capacity) section 7 states any person of full age and sound mind may make a valid Will provided it is made in the proper form.

But what is a “sound mind”? Below we shall look at the recent Queensland case Re Oliver (deceased) (2016) in which a Will made by a man with schizophrenia was declared invalid. We will contrast this to another case of a challenge to a Will made by a schizophrenic Will-maker, based on the same legal principles but separated by almost 150 years and some 10,000 miles – and with a different outcome.

What does “testamentary capacity” mean exactly?

For almost a century and a half the test for mental capacity to make a Will has been based on the English case Banks v Goodfellow (1870). This case concerned the Will of John Banks (the testator i.e. the person making the Will) who, interestingly for our purpose, would today probably be diagnosed as suffering from paranoid schizophrenia. Banks had a history of mental health problems and had spent some time in an asylum. Even after discharge, he suffered delusions about being pursued by devils and being persecuted by a (deceased) butcher. In his Will he left his estate to his young niece Margaret. Unfortunately, she died just two years later aged 20 (which was under the age of majority at the time) without having made a Will. Her estate passed to her paternal half-brother who was unrelated to Banks. The son of the testator’s half-brother contested the Will arguing Banks did not have testamentary capacity. However, the Will was found to be valid. It was deemed “rational”, being for the benefit of his only close relative. Although Banks suffered mental illness causing delusions, these did not influence his decision regarding the beneficiary of his estate.

The four-part test in Banks for establishing the mental capacity to write a Will means the testator must:

• understand the nature of the Will and its effect;
• have an idea of the extent of the property which they are distributing;
• be aware of the persons for whom the testator would usually be expected to provide (even if choosing not to do so); and
• be free from any delusions of the mind that would cause him or her not to benefit those people.

This test still applies in many common law jurisdictions today, including Australia.

What did Re Oliver (deceased) demonstrate about testamentary capacity?

In this case the Queensland Supreme Court considered the case of Mr Oliver’s Will which had been prepared by the Public Trustee of Queensland but challenged by Mr Oliver’s brother. Mr Oliver had suffered from chronic schizophrenia all his adult life and had been confined to hospital since he was 19 years of age until his death at 61. As a result, the Public Trustee had managed his affairs since 1990. On Mr Oliver’s death, the Public Trustee applied for probate. Mr Oliver’s brother, however, sought to have the Will declared invalid because of the schizophrenia and also sought to be appointed administrator of the estate under intestacy rules, there being no earlier Wills.

Mr Oliver was unmarried, childless, with four siblings but left all of his estate to a sister. The Public Trustee argued the Will was “rational” and thus there was a prima facie presumption of validity. However, the court accepted that the brother had presented evidence displacing that presumption and the Will was declared invalid. That said, the court appointed the Public Trustee as administrator as they were concerned about the impartiality of Mr Oliver’s brother.

Contributing to the decision of invalidity, having failed the test in Banks, the following points are noteworthy:

• the solicitor’s note did not reveal why Mr Oliver wanted only to benefit the sister or even if he was aware of the other siblings who might have a claim; and
• although a doctor was asked to complete a medical form when the Will was executed this was not particularly helpful and there was no comment on the doctor’s previous experience of Mr Oliver.

What does it mean?

The test for testamentary capacity is a common law test and is based in the principle of “freedom of testamentary disposition”.

The requirements for testamentary capacity involve a low threshold: a person must be of sound mind, memory and understanding. Adults are generally presumed to have the ability to make a Will unless evidence is presented to the contrary in which case the executor (usually) will have to prove they did. As the Victorian Law Reform Commission has pointed out, the requirement to appreciate the potential claims of others “adds a moral element to the test by looking for awareness of who has a reasonable claim on their estate” though the failure to meet these “moral obligations does not necessarily indicate a lack of capacity”.

Banks is a reminder that if an individual suffers delusions they may still be able to make a valid Will as long as the delusions did not affect the dispositions in the Will. This can apply in cases of dementia too.

A measure to prevent challenges to a Will is to have a medical assessment of a person’s capacity to make a Will.

Testamentary capacity cases can be particularly hazardous to charitable beneficiaries (and indeed others).

As evidenced by these two cases involving schizophrenia but coming to quite different conclusions, each case is dependent on the facts of the case and specialist advice is essential.

Contact our Expert Wills Solicitors

The Complete Guide to Challenging a Will on our site provides general guidance to the issues but each case is different. If you are considering contesting a Will, it is important to note that time can be of the essence so please contact our experts at Szabo & Associates, Solicitors in Sydney on (02) 9281 5088 or make an online enquiry.