The importance of testamentary capacity when making a Will

Having a Will which sets out your wishes is a valuable succession planning tool in farming families. However, many people do not understand the importance of being able to prove your legal and mental ability to make or alter your Will, known as ‘testamentary capacity’, should a dispute arise.

A recent Court of Appeal decision in an inheritance dispute illustrates the approach of the courts to evidence of testamentary capacity, and the importance of involving professional advisors when making your will.

The case involves Evan Hughes who died in July 2016, aged 84. He was a farmer and director of the family building business ‘J. Parry & Hughes Ltd’. At the time of his death he had multiple assets including property and farmland, but it is the fate of 58 acres of farmland known as Yr Efail, valued at £490,000, which was the centre  of the family dispute after Evan’s death.

Evan’s children, Gareth, Carys and Elfed, were all directors and shareholders of J. Parry & Hughes Ltd. Gareth took over supervising the building work when Evan retired in 1985, whilst  Elfed focused on  farming, as did Elfed’s son Gerraint and his brothers Stephen and Sion. It was accepted among the family that the farming arm of the family business would be carried on by Elfed. Evan’s Will, made in 1985, reflected this with all the farmland, including Yr Efail, passing to Elfed, and the company to Gareth and Carys.

The tragic death of Elfed in 2015 caused Evan to reconsider his wishes, and although psychological tests indicated a moderately severe degree of mental impairment and evidence of stroke damage, he  was astute enough to realise he should make a new Will.

To this end Evan had a number of meetings with his solicitor, Ms Roberts, from March 2016, and in July 2016, he executed a new Will under which Yr Efail was to pass to Gareth.

On Evan’s death, Elfed’s widow Gwen and her eldest son, Stephen challenged the validity of the 2016 Will on a number of grounds, including that Evan did not have testamentary capacity.

The legal test for testamentary capacity is to be found in a 17th century case called ‘Banks v Goodfellow’ which, despite its archaic language, has survived on the ‘if it ain’t broke, don’t fix it’ basis. Essentially, the test says that the person must understand the nature of the making of a will, its effects, the extent of their property and the claims which may be made to it.

The trial Judge heard evidence from 20 witnesses over 4 days, including family members and associates. They said Evan started to experience problems with his memory in 2014 and was often forgetful, erratic and confused. As a result, Evan’s family had persuaded him to make a Power of Attorney in 2015 allowing attorneys to deal with his finances.

On the other hand, Evan’s solicitor, his GP and an independent consultant old age psychiatrist all provided evidence that in their view he had testamentary capacity. However, the trial Judge decided Evan did not have testamentary capacity, and the 2016 Will was therefore invalid. Gareth appealed.

The Court of Appeal overturned the trial Judges’ decision about testamentary capacity in a judgement handed down on 24 March 2022. It concluded that the focus on the change of beneficiary for Yr Efail and the perceived unfairness to Elfed’s sons, who argued they had a legitimate expectation of inheriting Yr Efail, had led him to ‘downgrade’ the evidence of the solicitor and the GP.

The appeal court endorsed the view that where a Will is explicable and rational on its face, then the conclusion reached by an independent lawyer who is aware of the circumstances (and the legal test for capacity), has met the testator and taken instructions, is likely to be of considerable importance when determining testamentary capacity.

That does not mean it is definitive, and there may be good reason to place less weight on a lawyers evidence – depending on the circumstances. In Evan’s case however, the fact that Ms Roberts was eight years qualified, made meticulous attendance notes, took instructions and discussed them with Evan a number of times, before reading the Will over to him, was persuasive. This meant the original decision was overturned and Evan declared to have had testamentary capacity to make the 2016 Will.

This case illustrates how critical the evidence of a testator’s GP and solicitor can be where testamentary capacity is in issue. If you are considering making or updating your Will, you should always seek legal advice.

This article was first published in the May 2022 edition of South East Farmer.

This content is correct at time of publication