Increasing awareness of mental health issues brought about important discussions about the laws surrounding mental capacity and, more generally, people living with mental illness. Statistics show that more people are affected by mental illness than previously thought. When it comes to putting a Will in place, or assessing the validity of a will, a person’s mental health and mental capacity at the time of signing a Will is of crucial importance. It is a legal requirement for mental ability to be present when a Will is made.
Testator’s Mental Capacity
A critical factor in determining the validity of a Will, or any estate document is that the document was signed by a person of sound mind. This means that if a Will is contested or is proved to have been executed by a person who lacked mental capacity, the courts will likely declare such Will invalid.
The lack of capacity is one of the most frequent grounds for dissatisfied parties to challenge a Will. If the Will is challenged, it is up to the Executor of the Will or a beneficiary to prove that the testator had testamentary capacity at the time of executing the Will.
If such circumstance arises, the lawyer who drafted the Will may be of great help in proving the validity of the Will. He or she is required by the Law Society to take careful notes and ascertain mental capacity of the testator at the time the Will is being prepared. This is one of the many reasons, it may be prudent to have your Will prepared and witnessed by a lawyer.
Beneficiary’s Mental Capacity – mental illness of beneficiaries must be carefully considered and accounted for in the process of estate planning. To protect a mentally ill beneficiary, a Discretionary Trust should be established for that individual. A Discretionary Trust means that finances and assets pass to a ‘Trustee’ who manages the funds on behalf of the disabled beneficiary. A structure known as “Henson Trust” specifically addresses the financial needs of a disabled individual while allowing him or her to continue receiving available public disability benefits.
Parties under legal disability
Persons lacking mental capacity to manage their affairs are considered “parties under disability” under Ontario Law. Such individuals require a guardian to make financial and other decisions for them. To avoid complicated legal proceedings to appoint a guardian should the incapacity arise, we recommend that our clients put in place Powers of Attorney for property and personal care. This ensures that loved ones are able to know the wishes of the person that has become incapacitated and have legal right to act on these wishes.
All children regardless of their health status are considered “parties under disability” under Ontario law. This means that they cannot own or manage property or make financial decisions for themselves. Parents need a flexible structure in drafting their Wills and may accompany the Will with a ‘Letter of Wishes’ providing a guideline for how trustees can exercise their discretion. It is important that the provisions of the Will allow the Trustees to use predetermined amounts from the estate for the benefit of the children to pay their living expenses, education, healthcare costs etc.
Testators must also be careful in determining whom to make trustees as all funds are spent and managed at the discretion of said Trustee. They must choose a trustee who will genuinely care for their ward.
Your Will is not a matter that you should take lightly. Improperly prepared or improperly witnessed Will may be challenged after your passing resulting in serious family conflicts and protracted litigation. If you have children or one of your beneficiaries is under disability, it is very important to ensure that the provisions of the Will or trust instrument are properly versed according to the law. We encourage you to speak to an experienced lawyer who can walk you through the process.