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Estate Litigation Series: Testamentary Capacity
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-...
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,
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.