A Will sets out a person’s wishes for how they would like their estate to be distributed after their death. A person making a Will (the testator) must meet a cognitive standard when understanding the nature and effect of their Will. This legal standard is referred to as testamentary capacity.

What is testamentary capacity?

Testamentary capacity is the required legal and mental capacity a person must demonstrate in order to create a valid Will. If a testator does not demonstrate testamentary capacity, their Will is considered invalid and will not be admitted to probate.   

The test for testamentary capacity

The case of Banks v Goodfellow [1870] established the principles of testamentary capacity that remain in place today. The case ruled that in order to possess testamentary capacity, the testator must:

• Understand the nature and extent of their estate
• Understand the nature and effect of making a Will
• Understand the potential beneficiaries of their estate; and
• Be free from ‘disorders of the mind’.

Though these principles were created long ago, they continue to serve as the legal benchmark for assessing testamentary capacity. Satisfying these principles is essential to ensuring a Will reflects the true intentions of the testator.

Understanding the nature and extent of the estate

The first component of testamentary capacity requires the testator to satisfy an understanding of the nature and extent of their estate. To understand the nature of one’s estate is to understand both the value and significance of the property. The testator should also be able to demonstrate a knowledge of what their assets are and how they are held.

The cognitive threshold for understanding the nature and extent of an estate can vary with complexity. For example, a Will with modest assets like a family home, savings account and superannuation only requires a basic level of understanding. However, for a more complicated estate using trusts or companies to hold assets, the required threshold for understanding is higher.

Understanding the nature and effect of making a Will

The testator must also demonstrate they understand what a Will is and the effect their Will has on their estate. It is essential for the testator to show they understand the binding nature of a Will and its legal significance. The testator must also affirm that the Will is an accurate reflection of their final wishes. It is also essential that the testator recognises the responsibility they are entrusting to their executor and trustees.

Understanding the potential beneficiaries

The testator must also comprehend who is entitled to a provision from their estate when they pass away. In NSW, as long as all assets are clearly outlined in the Will, a person can distribute their assets however they choose.

The testator should be aware of individuals that may make a claim against their estate for familial, caring, or dependency reasons. These persons may be eligible to challenging the testator’s Will to gain a greater portion of the estate. This can be achieved by lodging a Family Provision Claim. To learn more about filing a Family Provision Claim and preventing Will disputes between siblings, please refer to our blog.

Must not have a ‘disorder of the mind’

To satisfy testamentary capacity, the testator must be in a mentally sound condition. If the testator has a psychiatric condition or neurological disorder, they may not be able to accurately express their final wishes.

Common ‘disorders of the mind’ that may affect a person’s testamentary capacity include dementia, schizophrenia, bipolar disorder, depression, and alcohol or drug dependency.

When making a Will for someone with a psychiatric or neurological condition, a medical expert can provide an assessment of the person’s character and mental capacity. A medical assessment will assist in determining whether the testator possesses testamentary capacity.

Contact Us

If you require assistance with Will making and testamentary capacity, we recommend seeking professional advice. To discuss your estate planning matter with an experienced lawyer, please contact Etheringtons Solicitors on (02) 9963 9800 or via our online contact form.