This review was originally published in Estates Trusts & Pensions Journal Volume 34 Number 3 May 2015
An older woman lives in Ottawa; her husband of 61 years died the previous year. She has one daughter who lives near her in Ottawa. The other two children live in Halifax, but visit on a regular basis. The woman does not remember many things but lives on her own and looks well. She now wants to make a new will on her own leaving everything to the one daughter, putting the house into joint tenancy with the daughter, transferring her investments to her daughter jointly and changing the beneficiary of her Registered Retirement Income Fund (“RRIF”) to her daughter.
This example, in all its variations, is one that lawyers in practice see more frequently. Is the woman mentally capable? Is she being unduly influenced? This issue is faced by the lawyer providing the advice and documents, and to the lawyer who will attack or defend the documents.
We are fortunate for the timely appearance of Capacity and Undue Influence. In one book you are able to find sophisticated guidance. The book has 770 pages of text, all of it useful. The book:
…deals with the law of capacity, knowledge and approval, intention and undue influence as those legal principles relate to the voluntary transfer of wealth. These areas are intertwined and are frequently a concurrent issue. (1)
The author, in great depth, covers testamentary capacity to make a will, the knowledge and approval necessary, and undue influence in making the will. The book is much broader than just wills. The author also covers the capacity to make gifts and the capacity to set up a trust. The book does not cover capacity in relation to a power of attorney for property and a power of attorney for personal care decisions. What are the tests to determine these questions, are they different in making a cocicil, in revoking a will or in changing the beneficiary designation? What is the test for capacity to make an inter vivos transfer of property? Is it different from capacity to make a will? With a transfer of property, there must also be a specific intention to make the transfer, whether as a gift or to a trust.
Without this intention, the “gift or other inter vivos wealth transfer is void for want of intention, not voidable.” (2) Inter vivos gifts, especially larger gifts, are considered differently from testamentary-type dispositions. The asset of an individual will be disposed of in some way on death. A large inter vivos gift may take away assets from an individual that harms his or her lifestyle. How is capacity or undue influence considered differently in making larger gifts?
We are all familiar with a relatively small estate, where a will is involved, but large assets are otherwise disposed of on death – such as by way of a beneficiary designation in a RRIF and an insurance policy, the valuable home put into joint tenant, and the bank account and investment put into joint names. The law of capacity and undue influence, as well as the court procedure in contesting these outcomes may be different in each case.
The topic often most difficult to deal with is undue influence. With capacity, there is the possibility of getting some opinion from a medical professional or assessor, although not usual before the will is made. After the death of a testator, there are usually medical records to review to assist in determining capacity. There is also the evidence of the drafting lawyer. The legal test of capacity was set out 145 years in England and is still regularly cited. (3)
How is undue influence to be handled, both for the lawyer drafting the will and the lawyer later attacking or defending it?
A lawyer is at least put on notice of a possible undue influence claim where one individual brings the client to the lawyer, wants to sit in on the meeting, and will be providing the lunch and medication shortly afterward to the client. The practical problem for the lawyer seeing this client is what should be done? Refuse to draft the will? Ask if the client is pressured? Give a copy or original of the will to the client, knowing the “pressuring” individual will see it? (4)
The onus to prove undue influence is on whoever is making this allegation.(5) It can be hard to prove, as the evidence is often lacking. The undue influence must be such as to “overcome the free will of the will-maker.” (6) If an individual is weak with disease or suffering a lot of pain, only a lesser pressure is needed to show undue influence. The onus is on the one attacking the will to show undue influence. These are simple principles but difficult to deal with in practice. The book has almost 50 pages alone devoted to the topic of undue influence and wills. The coverage of undue influence with inter vivos gifts is almost 70 pages. In brief, the topic is truly vast and increasingly complex.
It may be thought that this book is just for legal research or court related matters. It isn’t. There are two chapters that deal with the practical problems of the drafting lawyers, for example, how to deal with capacity in an emergency situation, such as client in the hospital who is dying. (7)
Fortunately, we now have this book for guidance. I anticipate the book will be quoted in the factums of lawyers and cited by judges in their decisions. The book is not a good book. It is a great book.
- Poyser, page xxxiii
- Poyser, p. 415
- Banks v. Goodfellow (1870), 39 LJQB 237, LR 5 QB 549 (Eng QB)
- For a discussion of this practical problem see the recent article by the same author, “Are Lawyers Being Fooled on Undue Influence?” (2014), 33 ETPJ 384.
- British Columbia has recently provided that the onus may change in so the defender of the will may be required to show that there was no undue influence: Wills, Estates and Succession Act, SBC 2009. C 13, s 52.
- Poyser, p. 302
- Poyser, chapters 12 and 13