Lane v Li [2024] NZHC 3663
Capacity and undue influence
Will drafting is not normally recorded on video. When it is, this is probably a red flag. This is what occurred in the recent unusual case of Lane v Li. Presumably intended by the hopeful beneficiary of Mr Lane’s new will to be evidence of Mr Lane’s capacity and free will, the recording depicts Mr Lane lying in a hospital bed while he is prompted to sign a newly drafted will which left the sum of $500,000 to Ms Li.
The will was signed only four weeks before Mr Lane’s death. Ms Li was much younger that Mr Lane and was described as a “close friend”.
In the video, Mr Lane is drowsy and appears to fall asleep partway through answering questions from the lawyer who drafted the will. Many of his responses are unintelligible, and Mr Lane speaks only when prompted. The nurses who cared for Mr Lane declined to witness the will as they did not believe he had capacity.
This video footage was pivotal to the High Court later deciding that Mr Lane’s will was invalid on the basis that he lacked testamentary capacity and was subject to undue influence at the time he signed the will.
This case is a valuable reminder of some of the factors which are important to the execution of a legally valid will, including:
- does the will-maker have testamentary capacity;
- are they free of undue influence;
- the role and responsibilities of the lawyer drafting the will.
Testamentary Capacity
A testator will have testamentary capacity to make a will if they:
- Understand the effect of the will they are drafting and the extent/value of the property which they are disposing of;
- Can understand and appreciate the claims they should be giving effect to in their will (for example, the need to make provision for their children); and
- Are free of any mental disorder that would alter their affections towards a person, or their sense of justice, that would result in the property being disposed of in a way that they would not have ordinarily done so.
Testamentary capacity is an assessment of mental competence, not physical health. A person must know enough to understand and make a fair assessment of all the things and circumstances that are relevant to their estate. An individual is presumed to have capacity, but if there is evidence that raises concerns about capacity and subsequently the validity of the will, then it will be the responsibility of the person relying on the will to prove that the testator had capacity.
Undue influence
Undue influence occurs where pressure or influence imposed by another person overwhelms the will of the testator and leads to the making of the gift or disposition under the will. This is distinct from lack of capacity.
A person who claims that there has been undue influence must show evidence, which proves on the balance of probabilities, that this pressure influenced the will maker to the extent that the transaction was not a result of their own free will.
Whether a person received independent advice is often a critical factor in considering whether there has been undue influence in any particular case. Giving such advice usually requires the advisor to make sufficient enquiries to ensure that they have adequate knowledge of the person's background and situation.
Role of the Lawyer
When drafting a will the lawyer acts for the will-maker. The lawyer’s responsibility is to give effect to the intentions of the will-maker and give accurate independent legal advice as to the terms of the will.
A lawyer should make enquiries to ensure that they are familiar with the testator’s background and circumstances. This is necessary to adequately advise the will-maker in respect of such matters as proposed gifts under the will.
Such enquiries usually cover the nature and extent of the property owned by the will-maker, whether the will-maker has a partner or children, and if they have any prior wills. The contents of any prior will should be considered – particularly any significant proposed changes.
Conclusion
To create a valid will, the testator must be fully informed and aware of what they are doing with their property and other assets. The decision they make must be free from the undue pressure of any other person.
We are regularly asked to assess the validity of wills and the capacity of deceased persons at the time that they executed a will. If you have concerns about the validity of a will which affects you, please contact us.
