Capacity issues with Elders
Capacity is one of the most critical and complex, issues in modern estate planning. As Australians live longer and manage increasingly valuable estates, questions about capacity are becoming more frequent, and more urgent. Whether you're preparing a Will, appointing an Enduring Power of Attorney, or acting on behalf of an older family member, understanding how capacity is assessed and protected under Queensland law is essential.
In this article, we explore what legal capacity means, how it applies to estate planning, and how lawyers assess capacity to help safeguard your wishes and reduce the risk of future disputes.
What Does 'Capacity' Mean in Estate Planning?
In legal terms, capacity refers to a person’s ability to understand the nature and consequences of a specific decision at the time it is made. Importantly, capacity is not a blanket concept, it is task-specific.
For example, a person may have the capacity to consent to a basic medical treatment but lack the capacity to make complex legal or financial decisions. When it comes to estate planning, we’re primarily focused on two legal tasks:
Making or changing a Will (testamentary capacity)
Appointing an Enduring Power of Attorney (EPOA)
The Legal Test for Testamentary Capacity
The legal benchmark for assessing testamentary capacity comes from an 1870 English case, Banks v Goodfellow, which still forms the foundation of capacity assessments today. To have testamentary capacity, a person must:
Understand the nature and effect of the Will
Know the extent of their assets (even approximate knowledge is sufficient)
Understand the claims that may be made upon their estate (e.g. spouse, children)
Not suffer from any mental disorder that influences the decision-making process
As estate planning solicitors, we apply this test by asking open-ended questions about your intentions, your family dynamics, your assets and liabilities, and any changes you wish to make to your Will. This helps ensure your Will reflects your true wishes and that it stands up to any potential legal challenges.
Capacity and Enduring Powers of Attorney
An Enduring Power of Attorney allows you to appoint someone to make decisions on your behalf, including:
Personal and health decisions (once you’ve lost capacity)
Financial decisions (either immediately or upon loss of capacity)
In most of the EPOAs we prepare at Vicca Law, the financial attorney’s authority begins once the principal is deemed incapacitated by a medical practitioner. This provides a clear and objective trigger for when decision-making authority takes effect.
In some circumstances, particularly where an attorney is already assisting with finances, we may recommend immediate authority. However, this creates a legal grey area if the principal retains capacity but the attorney believes they no longer should manage their affairs. In these cases, obtaining a formal capacity assessment is often necessary.
How Capacity Assessments Work in Practice
At Vicca Law, we begin with the presumption that every client has capacity. For elderly clients or those making unusual changes such as excluding a child or providing uneven inheritances—we apply extra care. In these cases, we may:
Conduct a more detailed legal assessment
Request a capacity assessment from your GP, geriatrician, or a psychiatrist
Document reasons for decisions to strengthen the Will against future challenges
This proactive approach helps protect your intentions and reduce the risk of your Will being contested on the grounds of lack of capacity or undue influence.
Why This Matters More Than Ever
Capacity issues in estate planning are becoming more common due to:
An ageing population with increased instances of dementia and cognitive decline
Larger estates, often including property worth $1 million or more
Greater family complexity, including blended families and estranged relationships
Increased awareness of legal rights and greater willingness to contest Wills
These dynamics make capacity assessments more important and more contested than ever. Proper legal guidance is essential to navigate these challenges with confidence.
How Vicca Law Can Help
If you or someone close to you is navigating questions around legal capacity, we’re here to help. Whether you’re concerned about an ageing parent, updating your Will, or acting as an attorney under an EPOA, we can provide personalised legal advice that protects your interests and your legacy.
Visit www.viccalaw.com.au to book a consultation or learn more about our estate planning services.