Does anyone use or recommend using a clause in Wills to make all legacies contingent on the relevant beneficiary having mental capacity? Perhaps it should be phrased as mental capacity to manage their legacy, which would be easier to assume for a small legacy than for a large legacy. It would seem to be a good condition for all legacies except where a testator specifically wishes to make provision for someone lacking mental capacity. It would be relevant not just for elderly beneficiaries as people of any age can lose capacity due to a tragic accident or illness.
The problem with such a provision is that the legislation has changed the rules as to whether or not an individual has mental capacity. You may be thinking back some years to a time when one could describe an individual as having or not having mental capacity. Nowadays, we are told that an individual may have sufficient capacity to make one decision while having insufficient capacity to make another. If you go through the Mental Capacity Act you will find all sorts of strange suppositions, and if we give testamentary form to those, we will be importing ambiguities galore into the administration of an estate.
Julian Cohen
Simons Rodkin
It seems to me to be rather capricious to give legacies only if the (intended?) beneficiary has the capacity to “manage” their legacy.
As Julian points out, such a provision could create more issues, rather than less.
Assume T wills their estate to their 3 children. They die in a road accident in which their favourite child is injured and suffers irreversible brain damage, as a result of which they lack capacity to “manage their legacy”. The estate goes to the other 2 children. Would T really have wanted their favourite child to be left destitute and at the mercy of the state?
It might be clear that the beneficiary is unable to “manage” their legacy if there is a Court of Protection deputy acting in their affairs, but if not what checks would need to be undertaken to ensure the executors are suitably protected if they distribute to a beneficiary who is subsequently shown to have lacked capacity at the relevant time?
And what is the relevant time? Does the beneficiary need to have capacity when the testator dies, or when the distribution is to be made? Could the executor safely assume capacity, unless on notice of a possible lack of capacity?
Frankly, I am not sure what benefits such a requirement would be meant to provide – it just creates greater uncertainty.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals
I cannot understand why you think this would be “a good condition for all legacies”? In addition to doing bankuptcy checks on beneficiaires, executors would also have to pay for a mental capacity report on perhaps dozens of legatees and resdual beneficiaires, presumably out of the estate. I think it is a ridiculous idea.
I agree that there would be difficulties in determining mental capacity, which are problems with LPAs, but that is another matter. My thinking was that many clients have concerns about cost of care and would not wish to leave a significant legacy to a beneficiary who has dementia and living in care. I presume that in principle a contingent legacy is possible, in which case the client’s wishes could be taken, but the replies suggest the difficulties would outweigh the intended benefit.
If there is a significant concern about the beneficiary receiving a legacy then surely a Trust would be more appropriate than a “capacity contingency”?
I agree with other comments that such a clause is much more likely to cause problems than any benefits. Client instructions would need to be very carefully sought on what their intention is i.e. do they in fact still want B to inherit even if they lack capacity? If so, then Trust route is an option and/or enquiries as to whether B has an LPA or Deputy in place who can manage the legacy for them? Ultimately the testator may take the view that if the legacy goes towards B’s care, surely that is also for B’s benefit / well-being and so perhaps not the worse thing in the world either? I guess the point is to make clear to client testator the risks so that they can make an informed decision, rather than across the board having such a contingency upon a gift.
Looking at rxm’s latest posting in conjunction with their initial post, if there is a real issue, I wonder if the less problematic solution would be to create a discretionary trust of the estate with a detailed letter of wishes to the executors, setting out the primary wish as to the distribution of the estate, and the alternatives where any beneficiary might, in the executor’s opinion, be lacking competence to “manage” the legacy which the testator would wish them to receive.
This would avoid having to try and establish a test of “competency” within the will and enable the executor to manage the distribution of the estate more effectively.
However, I would still see this as complicating the administration of the estate more than is probably necessary.
Whilst some testators might want to buy into such an arrangement, if marketed to them in the right way, I am not sure that many of them would necessarily fully understand what they were doing, thus opening the door to the will being set aside for a want of knowledge and approval. A solution (?) to be offered only to clients who are sufficiently knowledgeable to properly understand the intricacies (and probably, therefore, those least likely to want to adopt such an arrangement).
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals