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Estate Litigation Series: Testamentary Capacity

By: Jonathan M. Friedman, B.A., LL.B.

Introduction

Prior to reading below it is important that you remember that the legal tests for testamentary capacity, the capacity to grant or revoke powers of attorney and capacity to manage one’s property and personal care are entirely different from one another. In an effort to keep this article brief and succinct this article will only outline and describe the importance of the testamentary capacity of the testator when instructing, reviewing and executing their Last Will & Testament.

The Testator’s testamentary capacity, or lack thereof, is often utilized as an argument or avenue for disputing and/or challenging the validity of a deceased’s Last Will & Testament.

It is estimated that there are 25,000 new cases of dementia diagnosed in Canada every year. It is also estimated that currently 564,000 Canadians are living with some form of dementia and that 937,000 Canadians will be living with some form of dementia by the year 2031.1

It is important for individuals and more importantly Estate Lawyers to recognize that the projected increase of mental illness in Canada is likely to cause an increase in Will disputes and/or challenges, especially involving grounds of incapacity.

Below you will find a focused review of a limited number of important decisions regarding testamentary capacity. Yet kindly be mindful that this article is in no way an overview of the law of testamentary capacity as a whole, each case is fact specific and requires a unique approach and application of the law, depending on the circumstances.

Banks v. Goodfellow

The concept of a “sound disposing mind’ in Canadian law finds its origins in the English case of Banks v. Goodfellow2. The reasons of Cockburn C.J., indicate that “soundness of mind” needed to establish testamentary capacity need not be as rigorous as the mental capacity required to conduct other business affairs;3

“It is essential to the exercise of [testamentary] power that a testator shall understand the nature of the act and its effects; shall understand the extent of the property of which he is disposing; shall be able to comprehend and appreciate the claims to which he ought to give effect; and, with a view to the latter object, that no disorder of the mind shall poison his affections, prevert his sense of right, or prevent the exercise of his natural faculties . . .”4

Re Schwartz

The test for testamentary capacity was reiterated by the Ontario Court of Appeal in Re Schwartz in more contemporary terms than as previously outlined in Banks v Goodfellow. Here, the Court of Appeal held that in order to determine testamentary capacity the testator must be sufficiently clear in his/her understanding and memory to know, on his/her own, and in a general way the following;

1. the nature and extent of his/her property,
2. the persons who are the natural objects of his/her bounty and
3. the testamentary provisions he/she is making;

The testator must also, be capable of

4. appreciating these factors in relation to each other; and,
5. forming an orderly desire as to the disposition of his property.5

The burden of proof of testamentary capacity is on a person seeking to uphold a testamentary instrument at least where “the circumstances reflect on the mental capacity of the testator to make a will”6.

Banton v. Banton

The ability to assess and appreciate the moral claims of a testator’s children is a separate requirement which must be satisfied if the will is to be upheld.7 To put it simply, if at the time the testator reviews their prepared Last Will & Testament the testator suffered from a mental illness and/or disease which would affect his/her memory in such a way that the testator was oblivious of the claims of his/her family members, and if this lack of memory induced the testator into selecting strangers to be his/her “legatees”, the testator’s Last Will & Testament will be invalidated by the court.8

In Banton v. Banton, an elderly gentleman, Mr. George Banton, married for a third time when he was 87 years of age. At this time George Banton suffered from a multitude of health issues including, in part, being previously diagnosed as having cancer of the prostate, undergoing several surgeries one of which included the removal of his testicles, being severely afflicted with deafness which caused him to require the use of headphones and a microphone in order to carry on any serious discussion.9 George Banton was declared financially incompetent. George Banton got married, and subsequently prepared and executed a new Last Will & Testament which provided for the disposition of his entire estate to his new wife, Muna Yassin. which meant he disinherited he children. This new will was markedly and substantially different from his previous will which in which George Banton directed that twenty five thousand dollars ($25,000.00) be set aside for the care and maintenance of his previous wife (now deceased) if and after her own funds were exhausted and subject to that provision, his estate was to be divided equally among his five children with substitutional gifts to the legitimate children of any children who predeceased him. The Court ultimately held George Banton’s new will as invalid because Muna Yassin exercised duress and George Banton did not have testamentary capacity.10

It is important to note that in Ontario, unlike elsewhere in Canada and abroad, unless the children are dependants, a capable parent acting voluntarily is entitled to disinherit their children however mean and ungrateful it may seem, or how selfish the motive.11 Therefore, if a child (or all of the testator’s children) are not listed as beneficiaries under the testator’s Last Will & Testament, this does not necessarily invalidate the will. The evidence presented by the individual(s) seeking to uphold a testamentary instrument must, on a balance of probabilities, prove that the testator was capable when instructing, preparing and/or executing their Last Will & Testament. Thus, where a capable testator’s child and/or all of a testator’s children are wilfully and intentionally omitted from their Last Will & Testament their Will may be considered a valid testamentary instrument by the court. However, this was held to not be the case in Banton v. Banton.12

Palahnuk v. Palahnuk Estate

It is also important to note that if there are concerns with regard to a testator’s testamentary capacity, it may be determined by the court that the testator was in fact capable of managing their property at the time they provided instructions regarding the preparation of their Last Will & Testament, despite the fact that they may not have been capable at other points in time. In Palahnuk v. Palahnuk Estate13 the Honourable Justice Stach held the following;

“It does not necessarily follow that a person found to be incapable of managing her property is incapable for all time thereafter of possessing the ability to have disposing capacity in relation to her assets for the purposes of a will. Nevertheless, such a finding will heighten the onus upon those propounding the will to prove testamentary capacity.”14

It is important to remember that in Palahnuk v. Palahnuk Estate15 the expert medical opinion evidence regarding the testator’s capacity and mental status given by two expert doctors (and further supported by the testator’s medical records) established that the testator had a condition which gave rise to a “confusional state” which completely cleared once diagnosed and treated appropriately.16 Furthermore, the solicitor who received instructions from the testator and who prepared the alleged invalid Last Will & Testament, gave evidence that in his several visits with the testator, the testator knew and had described the real property she owned, knew that the Office of the Public Guardian Trustee was managing her property and knew that her estate included a mixture of real property and investments that were valued at 1.2 million dollars, which at that time she considered to be a lot of money.17

As a result, the court held that it was unnecessary for a competent testator to know the precise make up of their entire estate and all that is required is that a testator know and understand their estate’s value. Moreover, testators are not required to be accountants nor to have an accountant’s knowledge and understanding of their estate.18

Therefore, here the court held that a testator may in fact be incapable at various points in time yet, as long as they were capable when providing instructions to their solicitor with regard to the contents of their Last Will & Testament and were also capable when executing same, said individual’s Last Will & Testament may very well be considered a valid testamentary instrument by the court.

It is important to note that this situation is somewhat unique and that, as mentioned above, each case is fact specific and requires a unique approach and application of the law, depending on the circumstances.

Parker v. Felgate

You may question precisely at what moment in the process of instructing, preparing, reviewing, revising, approving and executing a Last Will & Testament should the testator’s testamentary capacity be determined and/or tested by their solicitor? This question was reviewed by the court in the 19th Century English case of Parker v. Felgate19 where the jury determined that the key moment in determining capacity is the time the testator provides instructions.20 The Privy Council upheld that jury charge in Perera v Perera, in 1901,21 and the Supreme Court of Canada approved of it in Kaulbach v Archbold, in 1901, in Faulkner v Faulkner, in 1920, and in Rogers v Davies et al., in 1932.22 Furthermore, this case was recently cited by the Honourable Justice David Price of Ontario Superior Court of Justice in McLaughlin (Estate of) v. McLaughlin23 where the Court held that;

“In cases where a will has been prepared in accordance with the testator’s instructions, the testator’s failure to read it, or hear it read, will not invalidate it. However, the principle cannot give validity to a will that has not been prepared in accordance with the testator’s instructions, after the court has rectified it.”24

In Parker v. Felgate, a will was challenged on the basis of alleged lack of capacity. The testatrix had capacity when instructing her solicitor, but suffered from Bright’s disease which affected her kidney, and she fell into a coma before it was prepared and executed. Despite the fact that in this case after the onset of her coma, the testatrix no longer had testamentary capacity, the testatrix’s testamentary capacity was held to still be valid, since she had the capacity when she gave instructions, she remembered giving the instructions, and she believed the Will to be in accordance with her instructions.25

Yet, at the time of the execution of their Last Will & Testament a testator must also comply with the requirements of Section 4.(1) of the Succession Law Reform Act26 which provides the following:

“Subject to sections 5 and 6, a will is not valid unless,

(a) at its end it is signed by the testator or by some other person in his or her presence and by his or her direction;

(b) the testator makes or acknowledges the signature in the presence of two or more attesting witnesses present at the same time; and

(c) two or more of the attesting witnesses subscribe the will in the presence of the testator”27

Conclusion

It is extremely important that prior to receiving instructions from any testator all estate lawyers take necessary steps to determine whether or not the testator is capable to provide instructions and again prior to the testator executing their Last Will & Testament.

Taking the necessary steps to determine testamentary capacity will not necessarily prevent future litigation involving the testator’s estate and the testator’s capacity, but can assist in potentially clarifying any question(s) and/or concern(s) raised by a potential applicant should the testator’s capacity be at issue.

Conversely, if there is any doubt and/or concern as to the testator’s capacity when providing their solicitor instructions regarding the preparation of their Last Will & Testament and/or when executing their Last Will & Testament, a prudent Estate lawyer, at a minimum, ought to review the testator’s medical records and/or discuss the perceived health of the testator with the Estate Trustee prior to proceeding with the administration of an Estate.


1 Alzheimer Society Canada, http://www.alzheimer.ca/en/About-dementia/What-is-dementia/Dementia-numbers
2 Banks v. Goodfellow (1870) L.R. 5 Q.B. 549(C.A.).
3 Schwartz (Re), 1970 CanLII 32 (ON CA), [1970] 2 O.R. 61(Ont. C.A.) aff’d 1971 CanLII 17 (SCC), [1972] S.C.R. 150 (S.C.C.)
4 Banks v. Goodfellow (1870) L.R. 5 Q.B. 549(C.A.), para 565
5 Schwartz (Re) 1970 CanLII 32 (ON CA), [1970] 2 O.R. 61(Ont. C.A.) aff’d 1971 CanLII 17 (SCC), [1972] S.C.R. 150 (S.C.C.)
6 Vout v. Hay, 1995 CanLII 105 (SCC), [1995] 2 S.C.R. 876 at p. 889, 125 D.L.R. (4th) 431
7 Banton v. Banton, 1998 CanLII 14926 (ON SC), para 55
8 Banton v. Banton, 1998 CanLII 14926 (ON SC), para 56
9 Ibid at paras 4-7
10 Banton v. Banton supra.
11 Banton v. Banton, 1998 CanLII 14926 (ON SC), para 36
12 Banton v. Banton, 1998 CanLII 14926 (ON SC), para 194
13 2006 CanLII 44262 (ON SC)
14 Palahnuk v. Palahnuk Estate, 2006 CanLII 44262 (ON SC), para 75
15 2006 CanLII 44262 (ON SC)
16 Palahnuk v. Palahnuk Estate, 2006 CanLII 44262 (ON SC), para 77
17 Palahnuk v. Palahnuk Estate, 2006 CanLII 44262 (ON SC), para 80
18 Palahnuk v. Palahnuk Estate, 2006 CanLII 44262 (ON SC), para 82
19 (1883), 8 P.D. 171.
20 Parker v. Felgate (1883), 8 P.D. 171.
21 Perera v Perera, [1901] A.C. 354 at 361
22 Kaulbach v Archbold (1901), 31 SCR 387, Faulkner v Faulkner (1920), 60 SCR 386, and Rogers v Davies et al., 1932 CanLII 3 (SCC), [1932] SCR 407
23 2015 ONSC 4230 (CanLII)
24 McLaughlin (Estate of) v. McLaughlin, 2015 ONSC 4230 (CanLII), at para 83
25 Parker v. Felgate (1883), 8 P.D. 171.
26 R.S.O., 1990, c. S.26
27 Section 4(1), Succession Law Reform Act R.S.O., 1990, c. S.26,


Jonathan M. Friedman

Jonathan M. Friedman
Associate
T: [905]-476-9100
E: jfriedman@donnellgroup.ca

This article should not be used in substitute for legal advice and was in no way intended to be relied upon as legal advice. Furthermore, the contents of these notes are intended as a guide for readers. They can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law.


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