Inheritance Dispute Case Highlights That The Test For Testamentary Capacity Is Not A Memory Test

Simon v Byford [2014] EWCA Civ 280, 17 ITELR 536

Background

The Deceased’s late husband founded a manufacturing company and shares in the company were held equally by the children. The remaining shares were held by the Deceased to prevent a deadlock. Three of the four children (R, H and J) were directors of the company. R (Claimant) was the Managing Director who took an active day to day role in the running of the company.

In 1996, the Deceased made a Will leaving her shares in the company together with a flat to R with the remainder of the estate being split between the children.

In 2001, the Deceased’s mental health began to deteriorate. In 2005, a birthday party was held for the Deceased to celebrate her 88^th birthday. At the party, the Deceased’s Will was brought up. The Deceased became very upset that her Will did not share her assets equally between her children and she therefore decided to rectify this immediately.

The Deceased at the party made a new Will, leaving her assets to her four children equally.

In 2009, the Deceased died. R challenged the Deceased’s Will claiming that she lacked the requisite capacity when making the 2005 Will.

One of the points raised by R when challenging the Will was that the Deceased had not appreciated the significance of her shares. Whilst alone they held no significance, they were significant to R as when combined with his existing shareholding it gave him the power to avoid deadlock.

What did the first instance Judge decide?

The Judge concluded that:

• The Deceased had been capable of understanding and had understood the nature of the Will and its effect;
• The Deceased had been capable of understanding and had understood that her property included the house she lived in, the flat and the shares in the company. She was, however, not capable of remembering the exact details without being told; and
• It was not necessary in the circumstances for the Deceased to know the different provisions of her earlier Will.

As a result of the above, the Judge decided that the 2005 Will was valid.

R decided to appeal this decision on the basis that it had been found that the Deceased was not capable of remembering her reasons for favouring him in the earlier Will and, as such, he believed that it should have been decided that the Deceased lacked testamentary capacity.

Court of Appeal decision

The Court of Appeal upheld the decision of the first instance Judge.

To appreciate the significance of the shares held by the Deceased she would have needed to have understood what her own estate consisted of and also what R’s assets had been. The Court of Appeal clarified that it is not a condition of testamentary capacity that the testator should understand or remember the extent of anyone else’s property.

On the evidence, it was decided that the Deceased had known that she was making a Will and that she had taken a conscious decision to make it and to approve the terms of the Will.

Given that the Will had been relatively simple and the Deceased had been found to have had testamentary capacity, it was decided that she did have knowledge and approval of the Will.

Comment

The decision in Simon v Byford is important when it comes to assessing whether someone has testamentary capacity and highlights that the test for testamentary capacity is not a memory test.

The Deceased had forgotten that she had owned a flat, forgotten the impact of her shareholding and had forgotten the contents of her previous Will. Notwithstanding this, the Court came to the conclusion that she did have testamentary capacity.

It is, however, important to note that each case does turn on its own facts.