Capacity, an illusive concept!
These past few weeks I have been faced twice with the challenge of assessing my client’s level of capacity to make an Enduring Power of Attorney (“EPOA”) where there is a recent diagnosis of dementia. I was provided with a medical certificate from the treating GP stating the person had capacity. There were also circumstances of conflict within each client’s family group.
The question of a person’s capacity to make a Will and appoint attorneys is always a relevant consideration for lawyers, and so it seemed a good opportunity to share some tips for individuals and/or family members of what capacity means in this context, why it is so important and how we can help people who might be facing circumstances similar to those of my client’s above.
What is capacity?
The term ‘capacity’ as it is used in this context has a number of dimensions and should be considered to be a fluid concept, meaning at a given time a client may have capacity for some decisions but not others. Capacity is:
- Domain specific; and
- Decision specific.
It is also important that the capacity to make a decision is not confused with the content of the decision itself. Just because someone makes a ‘bad’ decision, does not mean their capacity should be questioned. Judgment of a person solely on the basis of appearance, age, behaviour (including communication style), disability or impairment is not enough to determine their capacity, and a person’s capacity may be increased with appropriate support in many of those circumstances.
Capacity for an EPOA
Section 41 of the Powers of Attorney Act 1998 states that for those wishing to make an EPOA, a person is regarded to have sufficient capacity only if they understand “the nature and effect of the Enduring Power of Attorney“.
Adults are presumed to have capacity.
There are a number of specific matters that need to be understood by the person making the EPOA to satisfy section 41, and these will be discussed with you by your Wills & Estates Lawyer.
Capacity for a Will (Testamentary Capacity)
For those wishing to make a last will, the relevant definition of capacity comes from an old legal case called Banks v Goodfellow (1870) LR 5 QB 549, which is applied keeping in mind ‘existing circumstances in modern life’. In basic terms, the person making their will needs to be aware of the following-
- The legal significance of making a last Will;
- The nature, extent and value of their assets;
- Who might be able to bring a claim against their estate; and
- Have the ability to judge the potential strength or otherwise of any such claims.
Tips for dealing with questions of impaired capacity
If you or a family member are experiencing any changes in the ability to manage one’s own affairs, it is recommended you seek advice from your treating GP. You should also review any existing wills or EPOA’s to check if they still reflect the maker’s current wishes. Be aware of the following requirements of your Wills & Estates Lawyer where capacity may be in issue:
- We will discuss with you the details of the treating GP and any formal diagnosis (this may or may not include the need for a medical certificate addressing a person’s capacity);
- We will need to interview the person alone;
- We will take detailed notes of the appointment to be kept on file; and
- We may ask to see a person multiple times over a set period to help us ensure a person has the required capacity.
Of course, an ounce of prevention is worth a pound of a cure, in this area especially. Well drafted estate planning documents prepared early in life and kept up to date will, in most cases, mean there is no need to worry about getting a person’s affairs in order at a time when capacity may already be impaired. Attending to these matters early will also likely avoid the more costly avenues of seeking assistance from the legal system to achieve the same result after a person’s capacity is said to be lost.
Turner Freeman Lawyers – Wills & Estates specialists
Should you have any queries whatsoever or wish to discuss your estate planning options including any Enduring Power Of Attorney or Will, please do not hesitate to contact Turner Freeman Lawyers Wills and Estates Team on (07) 3025 9000.