LOST CAPACITY? ALL IS NOT LOST

Capacity Wills

It has long been thought that once a person lost capacity they would no longer be able to make a Will.

This meant that one would either be “stuck” with their last Will or if they did not have a Will, bound by the rules of intestacy neither of which may be appropriate in the circumstances.

Recently, a statutory Will regime has been developed which allows a person’s family or friends to ask the Court to make a Will for a person who has lost capacity. The Court is empowered to make the Will provided a number of conditions are satisfied including that the Will is one that the person might make if they had capacity.

This regime presents an excellent opportunity to make a new Will for a person who has lost capacity in circumstances where their current Will or the intestacy rules would have an undesired outcome. For example, it allows a person who has lost capacity to have a Testamentary Trust Will (if appropriate) or to ensure that their estate passes to their preferred beneficiaries if they do not have a Will.

The following examples neatly illustrate the benefits of the statutory Will regime.

Scenario 1:
• a parent without capacity is terminally ill with not long to live
• the parent has a significant estate
• the parent has a child involved in matrimonial proceedings
• the parent has a simple Will which leaves everything to the child

In this example, if the parent died before their child’s matrimonial was finalised their estate would form part of the matrimonial pool.

It is possible for the child to apply to the Court for a Testamentary Trust Will on behalf of the parent which might protect the inheritance from the matrimonial proceedings.

Scenario 2:
• a person suffers an accident which leaves them without capacity
• they receive significant insurance compensation
• they do not have a Will
• the intestacy provisions might operate to leave a significant portion of their estate to someone whom they would not include in their Will if they had capacity

It is possible for another family member to apply to the Court for a Will which would be more appropriate in the circumstances.

For futher information please contact Leanne Matthewson in our Wills, Estates & Superannuation team at Murdoch Lawyers.

Prepared by Alan Cumming

This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.

Contact Information

Direct Line: 1300 068 736