News

In the second instalment of our end of summer series reviewing the Law Commission’s report on reforming the law of wills, we focus on the recommendations relating to testamentary capacity and undue influence.

Testamentary Capacity

Current Position

To make a valid will in England and Wales an individual must have sufficient capacity to do so. The test for testamentary capacity was established in Banks v Goodfellow (1870) LR 5 QB 549 and requires the testator to understand:

(i) that they are making a will and the effect of the gifts made within;

(ii) the extent of their estate and the property which they can dispose of; and

(iii) those who may have claims against their estate and in turn to understand those claims.

Recommendation

Although the Banks v Goodfellow test has long been established case law and is well understood by practitioners, the test for testamentary capacity differs to the definition of capacity introduced by the Mental Capacity Act 2005 (the ‘MCA’), which is used when considering an individual’s ability to manage their property and affairs during their lifetime. To simplify the position, the Law Commission has recommended that the MCA test should also apply when considering testamentary capacity.

Under the MCA, there is a presumption that a person has capacity to make decisions for themselves unless it is proved otherwise (s 1(2) MCA 2005). The test for an
individual’s capacity is decision-specific and depends on whether their ability to make decisions is impacted by “an impairment of, or a disturbance in the functioning of, the mind or brain” (s2(1) MCA 2005). Furthermore, for an individual to have capacity they must be able to (i) understand information relevant to the decision they are making; (ii) retain that information; (iii) use or weigh that information in making the decision; and (iv) communicate that decision (s 3(1) MCA 2005).

However, the Law Commission does not intend to disregard completely Banks v Goodfellow. Instead, it recommends that elements of the Banks v Goodfellow test be incorporated into an MCA code of practice on testamentary capacity.

It should be noted that the Law Commission recommends that the rule established in Parker v Felgate (1883) 8 PD 171 should still apply. Under this rule, despite having lost capacity, an individual can still validly execute a will provided that:

(i) they had mental capacity at the time they gave instructions to a solicitor;

(ii) the will was drafted in accordance those instructions; and

(iii) at the time of execution the testator remembers having given instructions for a will and believes the will to be prepared in accordance with those instructions.

Potential impact

The authors consider the main differences are (i) the application to wills of the rebuttable presumption of capacity contained within the MCA and (ii) the threshold for capacity under the MCA test might be higher, given the requirement to understand ‘all relevant information’ which could be interpreted to include reasonably foreseeable
circumstances of the decisions contained within the will. However, in practice, it is thought that their impact is likely to be minimal.

The presumption of capacity would shift the burden from the propounder of the will (i.e. the executor(s)/personal representative(s)) to the person challenging a will. Having said that, the evidential burden often lies with the challenger at present anyway (if the will appears rational on its face and has been duly executed in accordance with s9
Wills Act 1837) and therefore only a relatively small number of cases are likely to be affected by this change.

Additionally, while the MCA test in theory might have a higher threshold, the incorporation of the Banks v Goodfellow principles into a code of practice means that,
in reality, the test is unlikely to change significantly.

Undue Influence

Current Position

For lifetime gifts, undue influence can be “actual” or “presumed”. For wills, undue influence cannot be presumed, meaning it is for the person seeking to challenge
the will to show that the testator was, on the balance of probabilities, subjected to actual undue influence at the time of writing and executing their will.

The threshold for undue influence for lifetime gifts and wills also differs. Although for lifetime gifts the definition of undue influence is wider and can include threats or simply honest advice (where the relationship was one of influence), for wills there is a requirement that the behaviour must amount to ‘coercion.’

As a result of the heavy evidential burden, claims for testamentary undue influence often fail for lack of sufficient evidence and for this reason are rarely brought currently as a main head of claim in will disputes.

Recommendation

To reduce the evidential burden on an individual seeking to challenge a will for undue influence (and in an attempt to provide increased protection for vulnerable
individuals), the Law Commission recommends that the court should be given the power to infer undue influence where there are reasonable grounds to do so.

In considering whether to use such a power, the court would be expected to take into account the conduct of the person accused of exerting influence on the
testator, the existence of a relationship of influence and the circumstances in which the will was made.

There is, however, no recommendation to lower the aforementioned threshold for testamentary undue influence and therefore there would still need to be
evidence of coercion for any claim to be successful.

Potential Impact

The introduction of the ability for a Court to infer testamentary undue influence might lead to increased litigation, although the retention of the stricter definition of undue influence regarding wills should hopefully temper the potential for too much speculative litigation.

Next week, in the final part of our end of summer series, we will review the recommendations affecting the Court’s powers, and the proposal to abolish the long-standing revocation rule. In the meantime, please contact our litigation partners, Henry Hickman or Amy Williams, if you would like any advice regarding testamentary capacity or undue influence, or disputing a will generally.