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Changing your will? Things to note from recent case law

23 August 2019

Almost 150 years ago the test for assessing testamentary capacity was established. It is commonly called the Banks v Goodfellow test. A person was deemed to have testamentary capacity if they:

  • Know the nature and effect of a will;
  • Know the extent of the property they have;
  • Understand who may have a claim on their estate and who should receive something from them; and
  • Have no disorder of the mind which would “poison affections or pervert their sense of what is right, and are not suffering from any “insane delusions”.

 

Recently the Court of Appeal looked at this test again in Loosley v Powell and stated that the Banks v Goodfellow formula is no more than guiding principles.  The Court of Appeal stated that a Judge should consider all matters relating to capacity, including the rationale behind any significant changes.

The case concerned the will of Allison Slater who died of breast cancer. There were two wills being considered.

Allison’s will from 2011 (the year she was diagnosed with cancer) divided the residue of her two million dollar estate equally between her five nieces and nephews. The beneficiaries were Allison’s eldest sister’s two sons Thomas and Nicholas, Allison’s younger sister’s twin children, Kate and Ben, and Allison’s late husband’s nephew, Mark, in England.

Six days before Allison died in 2014, she signed a new will. Thomas and Nicholas were the major beneficiaries. Kate and Ben received $50,000 each. Mark was to receive nothing and Mark’s mother was to receive $100,000.

Court proceedings followed. The Court of Appeal found that Allison lacked testamentary capacity when she signed her 2014 will.  Probate was set aside and the other three beneficiaries (Kate, Ben and Mark) shared in the estate, in accordance with Allison’s first will.

Allison had told her mother she was concerned that Kate and Ben would fritter away their inheritances which is why she made the change to her previous will. However the Court of Appeal concluded that there had been no “adequate explanation” given by Allison or her lawyer to justify the changes between the two wills.

The main point is that a person wanting to make changes to a previous will needs to provide a satisfactory explanation to their lawyer for the changes. The lawyer must ask why the will maker is making the changes.  As in the Loosley case, Allison’s lawyer was criticised for not asking her why she was wanting to make different provisions for Kate and Ben than she had made for them in her earlier will.

Loosley sets a very high standard for a will to be valid and makes it clear that a will maker must have rational reasons for leaving their estate in a particular way when they change their will.

Damandeep Sadhra is a Solicitor in the Family Disputes Team at Norris Ward McKinnon. You can contact Damandeep at damandeep.sadhra@nwm.co.nz