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Published On: March 23, 2015 | Blog | 0 comments

Mental Capacity to make a Gift – Common Law v Statute Tests – Testing Times

The case of Re Estate of Joyce Smith (deceased) in 2014 established that the legal test to be applied when assessing whether a person had mental capacity to make a gift, is not the test set out under the Mental Capacity Act 2005.  Similarly, the case of Walker v Badmin and Others in 2014 confirmed the Statute did not apply in cases as to the mental capacity to make a will.

Central to the Mental Capacity Act 2005 is an assumption of capacity. Hence the onus of proof is on the person asserting incapacity to show that incapacity.

The common law test has always been somewhat more refined.  The Courts when making a decision in retrospect, will often place the onus of proof on the person taking the benefit, hence reversing the assumption of capacity. If there is a sufficient suspicion around a gift or a will, the recipient of the assets has to prove capacity.  In practice, this amounts to a significant change of emphasis.

The factors that the Court will take into account when accessing capacity are again different. Section 3(1) of the Mental Capacity Act 2005 lays out the Mental Capacity Act as to capacity to:

(i)   understand the information relevant to the decision;

(ii)  retain that information;

(iii)  use or weigh information as part of the process of making the decision; and

(iv)  communicate their decision.

The test applied by the Court in relation to gifts and will is more complex. It places more emphasis on the person’s awareness of their family and community responsibilities.  It also requires that a person is aware of the extent of their estate and of the full impact of the act. This means that the evidence needed to succeed in such a case is very different.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

David Wedgwood

Head of Civil Litigation Joint Head of Court of Protection

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