One of the difficulties in advising clients and taking instructions when preparing an Enduring Power of Attorney or Will is to ascertain if the person giving the instructions has the ‘capacity’ to provide their instructions and therefore they can then sign the created document.

“Capacity” can be difficult to assess even for persons qualified to make such an assessment. Even so, to create a legal document that is binding and cannot be questioned at a later time an appropriate assessment needs to be undertaken of the person’s capacity.

There is often some angst from family members if a client’s instructions cannot be accepted due to a lack of capacity. Ironically, the rejected instructions are often those that a client might give or the appointment they would want if they had capacity and are often what the family would consider appropriate.

The starting point for capacity is a presumption that every adult has capacity to make all decisions until proven otherwise. A person with a disability, mental illness or a very elderly person may still have capacity despite their circumstances and it is up to a person challenging that person’s decision making capacity to prove that they have impaired capacity. Interestingly, capacity can change from time to time due to health issues and a person can lose and regain capacity temporarily even from day to day.

ENDURING POWER OF ATTORNEY

When an adult is providing their instructions for an enduring power of attorney the person providing these instructions needs to be capable of understanding the nature and effect of the document and making the document freely and voluntarily.

The level of understanding will vary depending upon the nature and complexity of the personal and financial affairs of the person giving their instructions, the types of decisions which will be made and the scope and terms of the power being given to the attorney. In the event that a person is seeking to give power to make decisions about financial affairs where there is a high level of complexity then a higher level of understanding is required by the person giving the enduring power of attorney instructions.

The person must give their instructions freely and voluntarily without any coercion or undue influence. There must be no pressure on the person giving their instructions to make a decision and provide instructions. Pressure or coercion can occur from well-meaning family, relatives or friends who even if they have the person’s best interests at heart are seeking to influence the making of an enduring power of attorney because they think it is the right thing to do and is in the person’s best interest.

The role of the witness when confirming that a person has signed a power of attorney document is to identify the person and to carry out an assessment of their capacity at the time the document is signed.

A letter from a medical practitioner is often sought where there are issues of concern about capacity. A letter from a medical practitioner can sometimes fall short of dealing with capacity issues in any meaningful way. The best evidence of capacity from a medical practitioner confirms that ‘capacity testing’ has taken place, a report of the results of the testing and whether or not a person has capacity to provide their instructions. Ideally the letter should be provided to the witness immediately after the assessment at the time the document/s is/are signed.

WILLS

Many of the issues relating to powers of attorney also relate to ‘testamentary capacity’ (competence to make a will).

A ‘testator’ (the person making the will) must understand that they are actually providing instructions for signing a document which disposes of their assets upon their death, they must be aware of the assets that they own and the liabilities in their name including the nature and extent of those assets and liabilities and they must be able to give instructions about how the assets are to be divided and who they want to receive the benefit of their estate (the beneficiaries) as well as understand the reasons why they intend those persons to be beneficiaries. The testator should also be able to consider anyone else that might be entitled and if a family member is excluded explain the reasons why they should not be included or otherwise why somebody who is not a family member should be included.

The testator’s knowledge about their own circumstance need not be specific. A general knowledge of their own circumstances, assets and their wishes to distribute their assets upon their death will often be sufficient. This may however depend upon the nature and complexity of the estate assets and the intricacies of dealing with distribution of those assets.

ASSESSED CAPACITY CREATES A BINDING DOCUMENT

Provided that the capacity issues are addressed when the person is providing their instructions and/or signing their documents and sufficient evidence relating to capacity is retained, by the solicitor or witness, the document will be binding and effectual. The problem is of course that the Testator, Principal and Witness do not make the decision about validity. That decision is made by a Judge who was not present to gauge the conduct and demeanour of the person when the document was signed. The Judge can only rely upon what evidence there is in support from the people present at the time or from other interested parties including for example other family members, doctors, hospital or nursing home employees who may hold a different view about the person’s capacity.

ASSESSED INCAPACITY

Effect on Estate

The effect of incapacity means that a signed will may be set aside by the court and this could have significant impacts upon the estate which could either result in a previous valid will being upheld or the testator dying without a will. When there is no will the Intestacy Rules in the Succession Act 1981 Qld apply to the distribution of the estate. These rules apply a formula for distribution between family members. This can sometimes be detrimental to the family or other named beneficiaries and is often outside of the intention of the deceased.

Effect on Decisions

If the principal lacked capacity an enduring power of attorney document could be set aside by the Queensland Civil and Administrative Tribunal (QCAT. If that occurs the process to have somebody appointed to administer the affairs of the incapacitated person would require an application to QCAT to ask for the appointment of an administrator and/or a guardian for the incapacitated person. The appointment could be of a family member or a friend who has the best interests of the person at heart but QCAT could even appoint the Public Trustee and the Office of the Public Guardian to those roles. The QCAT process can take many months until a decision is made.

MATTERS FOR YOUR IMMEDIATE CONSIDERATION

1. Consideration should be given to making of a will or an enduring power of attorney document as soon as possible;

2. Do not delay in seeking out legal advice and giving instructions particularly if you or someone you know is aging in later life, very elderly or there are early onset medical issues which effect capacity.

ISSUES TO CONSIDER AT RYAN MURDOCH O’REGAN LAWYERS

At Ryan Murdoch O’Regan Lawyers we believe:

• Every client has human rights whether affected by illness, mental health issues or disabilities and should be treated equally.

• Clients should be treated with dignity, autonomy and have a right to self determination

• Where there is impaired capacity a substitute decision maker is an important part of giving that person the right to make decisions under the law

• All persons irrespective of issues of capacity have a right to their privacy, confidentiality and to uphold their integrity and reputation.

• Capacity assessments should be carried out in a way which seeks to uphold a client’s sense of worth and value.

• Where there are difficulties in coming to terms with losing capacity we provide a caring and supportive role. We accept and acknowledge that for the client who is confronted with capacity issues this is part of their life’s journey and they should receive care and understanding in the midst of their uncertainty and confusion both now and into the future.

We encourage you to consider these issues and the need for early or urgent action to address these matters. Please contact us should you wish to discuss these issues or make an appointment to discuss or make an enduring power of attorney or will.

We trust that this information has given the reader some insight into the assessment of capacity when making a will and enduring power of attorney.

Please contact one of our offices should you wish to discuss the issues raised in this article or make an appointment with one of our Wills and Estates Team Members. Our team members will provide you with our Will, enduring power of attorney and advanced health directive instruction packs / Questionnaires so that you can consider your needs and have the necessary information readily available for your appointment.

Contact Us

To speak to one of our experienced wills and estates lawyers call 1800 999 529, email mail@rmold.newwebsite.live or submit an enquiry below.

We are available to meet with you at any of our local offices (Brisbane, Gold Coast, Beenleigh, Cleveland and Jimboomba) or by telephone or video-conference.

This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.