Understanding Mental Capacity for Estate Planners

Mental capacity is fundamental to estate planning. Documents made without capacity are invalid. For the complete career overview, see our guide on How to Become an Estate Planner UK.

Legal framework:

The Mental Capacity Act 2005 provides the framework:

• •A person has capacity unless established otherwise
• •Capacity is decision-specific and time-specific
• •People are entitled to make unwise decisions
• •Best interests must be considered for those lacking capacity

For estate planners:

• •Wills require "testamentary capacity"
• •LPAs require capacity to make the LPA
• •Both have specific legal tests
• •You must be confident client has capacity

Consequences of getting it wrong:

• •Document may be invalid
• •Family disputes
• •Professional negligence claims
• •Distress for families
• •Your reputation damaged

The balance:

Most clients clearly have capacity. But you must:

• •Be aware of signs suggesting issues
• •Know when to seek medical evidence
• •Document your assessment
• •Refuse to act if serious concerns

Different documents have different capacity tests:

Testamentary capacity (wills) - Banks v Goodfellow:

The person must:

1. Understand the nature of making a will

2. Understand the extent of their property

3. Comprehend who might have a claim on their estate

4. Have no disorder of the mind affecting disposal

LPA capacity:

The person must understand:

1. What an LPA is and what powers it gives

2. When the LPA will be used

3. Who they are appointing and why

4. That they can revoke while they have capacity

General capacity (Mental Capacity Act):

A person lacks capacity if they cannot:

1. Understand information relevant to the decision

2. Retain that information

3. Use or weigh that information

4. Communicate their decision

Key principles:

• •Capacity is assumed unless proven otherwise
• •Diagnosis doesn't equal lack of capacity
• •Capacity fluctuates - timing matters
• •Support should be given to help understanding

As an estate planner, you'll make practical capacity assessments:

What to observe:

• •Can they explain their wishes?
• •Do they understand what they're signing?
• •Do they know what they own?
• •Can they identify their family?
• •Are their wishes consistent over time?

Warning signs:

• •Confusion about basic facts
• •Inability to follow conversation
• •Significant memory problems
• •Inconsistent statements
• •Family member answering questions
• •Unusual pressure from others

Good practice:

• •See client alone at some point
• •Ask open questions
• •Check understanding, don't lead
• •Document what they say
• •Note any concerns

When to seek medical evidence:

• •Significant cognitive decline apparent
• •Known dementia diagnosis
• •Client seems confused
• •Family expressing concerns
• •Very elderly clients making significant changes
• •Undue influence suspected

The "golden rule":

For elderly/ill clients making wills, consider medical assessment. A doctor's opinion at the time protects against later challenge.

Proper handling of capacity issues protects everyone:

Documentation:

Always record:

• •Your assessment of capacity
• •Basis for your opinion
• •Any concerns you had
• •How concerns were addressed
• •Whether medical evidence obtained

File notes example:

"Client appeared alert and engaged throughout 1.5 hour meeting. She explained her family situation clearly, identified all children and their circumstances, described her property and approximate values, and gave consistent reasons for her distribution wishes. No concerns about capacity."

When to refuse to act:

• •You believe client lacks capacity
• •You can't resolve concerns with medical evidence
• •Undue influence suspected
• •Something doesn't feel right

How to refuse:

• •Be kind and professional
• •Suggest medical assessment
• •Don't complete documents
• •Consider who else to inform
• •Document your decision

Medical evidence:

• •GP or consultant letter
• •Capacity assessment
• •Note the date (capacity is time-specific)
• •Keep with your file

The key: When in doubt, get evidence. A doctor's opinion protects against challenges and shows you took reasonable care.