Planning for the future – making a will when there are capacity issues

As an investor, you are taking careful steps to plan for the long term. Part of this planning process should be to consider what might happen to your assets when you or your loved ones are no longer here. This might involve the execution of a will. Without a legally valid will, assets are distributed under the intestacy rules, which do not automatically reflect the many forms that families take today.

Here’s an example: Jane has three adult children from a first marriage. Following her divorce, she has been in a long-term relationship with another person – they live together but have not married. Without a will in place, when Jane passes away, her children will inherit Jane’s estate in equal shares, with no provision made for her long-term partner. This could lead to a dispute and lengthy legal proceedings.

What to do when there are capacity issues?

You may be acting as a lay deputy or attorney for a loved one, friend, or in a professional capacity. This role will involve careful management of that person’s affairs, and potentially their long-term investments. It is important to consider a will for those in this position, particularly where there are complex family arrangements, or where some family members have taken on a greater role in supporting the individual who lacks capacity.

"Capacity is decision-specific – if an individual lacks capacity to manage their property and affairs, this does not automatically mean that they do not have capacity to make a will."

Capacity is decision-specific – if an individual lacks capacity to manage their property and affairs, this does not automatically mean that they do not have capacity to make a will. An assessment focussing on testamentary capacity will highlight whether the individual has the capacity to make a will of their own volition, or whether a statutory will is required.

How does a statutory will work?

A statutory will is one that the Court of Protection has approved on behalf of a protected party. An application needs to be made to the Court, evidencing the individual’s estate, their family tree, their known wishes and those of their family members, and a draft will for consideration. The Court will then likely appoint an official solicitor to represent the individual in the proceedings and ensure that any decisions are made in their best interest.

Parties who will be affected by the application will be notified and given an opportunity to comment on the draft will. This is relevant when departing from the intestacy rules or from an existing will and it is preferable to have had these discussions prior to making the application. If the parties can agree, a negotiated draft will is presented to the Court for approval. If they cannot agree, the matter may be brought to Court. The Court’s role is to find a balance between the individual’s known wishes and other relevant circumstances.

"The Court’s role is to find a balance between the individual’s known wishes and other relevant circumstances."

Keep wills up-to-date

The issues discussed above highlight the importance of keeping a will regularly updated. Whether a person passes away or loses testamentary capacity, an up-to-date will is the best means of ensuring that their wishes are respected and their assets are distributed accordingly.

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