Mental Capacity Through the Eyes of a Private Client Solicitor: Wills, Trusts and LPAs

Mental capacity is a legal concept. It refers to an individual’s ability to make decisions for themselves.

We, as Wills, Trusts, and Probate Solicitors have a duty to consider whether our clients have the requisite capacity to make a Will (referred to as testamentary capacity), act as a Trustee and produce Lasting Powers of Attorney.

Our duty will involve evaluating the following:

• Whether the individual can comprehend the purpose of a Will, Trust or LPA;
• Whether the individual can accurately recall their financial and family circumstances;
• Whether the individual is capable of evaluating the advantages and disadvantages of different courses of action; and
• Whether the individual has awareness and understanding of the assets in their Estate or comprised in the Trust.

Professionals need to consider the mental capacity of every client to ensure they understand the nature of the decision and can weigh up the effects to decide upon the course of action they wish to take.

The main test for mental capacity is set out in the Mental Capacity Act 2005 for most decisions; however, for Wills, the test for testamentary capacity is set out in a case dating back to 1870 called Banks v Goodfellow.

If there is any doubt about capacity, a medical professional should carry out a capacity report for the individual concerned. It is common for a legal professional to insist upon a professional capacity report in Private Client law if the individual is elderly, on certain medication or suffering from dementia.

A capacity report is particularly important if the individual is also making a significant change to their Will or the circumstances surrounding the appointment of an Attorney or the making of the Will are suspicious.

A medical professional involved with the individual’s care may agree to produce the report, or a third-party professional can be instructed instead.

There is usually a charge for this service by the medical professional. Once the report is produced, the next steps can then be determined.

If you have already made a valid Will and later lose capacity, your Estate on death will pass according to that valid Will. If you had not made a valid Will, your Estate would pass following the Intestacy rules.

If you regain mental capacity, you could decide to make a new Will or revoke the current Will. We recommend making a Will before any capacity issues arise.

If you do not have Lasting Powers of Attorney in place and you lose mental capacity, a close family member or friend will likely need to apply to the Court of Protection to be appointed as your deputy.

As this is a timely and costly application and you cannot choose who will be appointed to act on your behalf, we always advise getting LPAs in place as early as possible. Providing you still have the necessary capacity, you can revoke your LPAs and make new LPAs should your wishes change.

Finally, if you lose capacity as a Trustee, the co-trustees or, failing that, the beneficiaries would need to seek advice regarding how you can be removed and potentially replaced.

As mentioned above, strict rules surrounding this area of law and legal assistance should be sought to ensure the Trustees comply with their duties and the Trust assets are sufficiently protected.