Investigating testamentary capacity — who pays?

Dealing with the loss of a loved one is enormously difficult. It is even more difficult when there is an issue regarding the potential decline in the cognitive function of that loved one.

A decline in cognitive function can raise questions about whether that decline has an impact on the contents of their Will. The situation becomes particularly challenging when a late change to a Will produces significantly different outcomes for loved ones left behind.

In certain circumstances, a person’s declining cognitive function may impact their ability to make a valid Will. This is referred to as a loss of testamentary capacity. However, in most cases the decline is gradual, and there can be real doubt as to if or when a person truly lost testamentary capacity. This is particularly important given that the test for testamentary capacity is functional. In other words, a person with a mental illness can still have testamentary capacity if their illness is shown not to have affected their Will-making.

In turn, this means that where there is an issue about a person’s testamentary capacity, the people affected may need to investigate the medical records and will-making patterns of the will-maker and obtain legal advice about whether the will-maker’s last Will is valid or not. While these investigations cost money, it may not be possible to ascertain if a Will is valid without the investigations.

Who should pay for these investigations?

It is important not to assume or expect that the costs associated with an investigation will be paid out of the estate of the deceased person. Courts recognise that there is public interest in ensuring that valid Wills are admitted to probate, and that invalid Wills are flushed out. Courts also acknowledge that a necessary extension of this approach is that some level of costs will need to be expended where there is genuine doubt about the validity of a Will.

This means that courts acknowledge, in certain circumstances, that the costs of investigating the testamentary capacity of the will-maker ought to be reimbursed by that person’s estate. This is logical if the outcome of the investigation and any subsequent challenge to the Will is that the challenger is successful in proving that it is invalid.

What happens in circumstances where there is genuine doubt regarding the validity of a particular Will, but it is ultimately proven to be valid? In this scenario, whether the challenger may be reimbursed from the will-maker’s estate depends on if there was a ‘genuine doubt about validity’. The courts resolve this issue by considering the strength of the evidence which supports the alleged doubt surrounding the will-maker’s testamentary capacity.

Previously tried cases best illustrate what is considered to be ‘genuine doubt’. For example, in Middlebrook v Middlebrook¹, a party investigated and challenged the validity of a Will on the basis
that there was evidence of alleged incapacity from the deceased’s doctor that the day before the signing of the deceased’s Will, the deceased
was sedated and semi-comatose.

That investigation and challenge was unsuccessful because the court accepted evidence from the will-drafting solicitor about the condition of the deceased the following day.

However, the Court found that the circumstances of the case justified both the investigation and the challenge, and ordered the challenger’s costs be borne from the estate.

This is more the exception than the rule, as there are a significant number of cases where courts have found investigations and challenges to be made on weak grounds – such as where:

1. the only evidence of alleged incapacity was that the testatrix sometimes forgot her children’s names and became fatigued in the afternoon;² or
2. there was evidence that the testator had recovered from earlier medical evidence of alleged incapacity.³

Courts have also held that to be ‘justified’ in investigating and challenging, to the point where a party may be reimbursed from the estate, even if the investigation or challenge fails, the challenger must do more than raise an arguable case or a ‘triable issue as to frailty or capacity’. Stronger evidence is required.⁴

Conclusion

If you believe that an investigation into whether or not a person had testamentary capacity is justified, it is important that you seek legal advice about the practical consequences of undertaking that responsibility. It is important to be aware of the possibility that you may have to pay the investigation costs without reimbursement — if ultimately there is not a strong enough basis to challenge validity.

Where possible, it is useful to try to seek the agreement of the other affected parties as to a protocol for the undertaking of an investigation. This shares the costs among parties and may avoid the need for any protracted litigation.

Contact us

To discuss testamentary capacity or to ensure that your comprehensive Will and estate plan are in place, please contact our Wills, Trusts & Estates team.

References

1. (1962) 36 ALJR 216

2. Re O’Donnell [1929] SASR 256

3. Will of Elizabeth O’Driscoll (1929) 29 SR (NSW) 559

4. The Estate of Milan Zlatevski; Geroska v Zlatevski (No 2) [2020] NSWSC 388