Estate Planning #2: Capacity
In order to make a valid Will, the Will-maker must have mental capacity. It’s a pretty low test: (1) Know they are disposing of their property; (2) know the general nature and extent of the property being disposed of; and (3) know the moral claims on the Will-maker. The Will-maker can’t have any delusional belief which interferes with understanding these three items.
It's enough to know that you have a house, some mutual funds, etc. worth about $2 million. It’s enough to know you have a current spouse and three kids – one of whom was the result of a one-night stand decades ago (who your spouse doesn’t know about).
If there’s likely to be any dispute about mental capacity by the potential heirs, it’s a good idea to meet with your family doctor who makes a note that you discussed the terms of the Will, and that you were mentally competent. In serious cases (e.g., history of mental illness) a more formal assessment and report is worth the money.
Good lawyers will include a “capacity note” in their file for any Will-Maker over about 60, as a matter of routine.
A trial in BC concerned a woman with 5 natural children, 1 adopted child, and 1 foster child. She frequently changed her Will, disinheriting one or more. Sometimes she named them: “Nothing to Charles because he is evil.”. Sometimes, she just left them out – naming only the others. The same lawyer did at least a dozen Wills for her – each different. At trial this lawyer was asked how many children the old lady had. He replied: “I don’t know – I never asked.” Pretty hard to show she understood the mortal claims on her. The result was an estate of over $350K – after all the lawyers’ fees – was split at about $10K to each child: https://canlii.ca/t/1fmps. The judge refused to order damages against the “never asked” lawyer.
The formality of proving “testamentary capacity” isn’t very hard. It’s occasionally a little time-consuming. It’s one of those things that lawyers charging a few hundred dollars just don’t bother doing. Every once in a while, not doing it ends up costing a fortune and years of bitter litigation.
There’s a Clear way to do a valid Will: hire a lawyer who will give Clear Legal advice.
We are hosting a Zoom seminar on estate planning on 12 May. Watch this space for details.
