Q. How important is a mental health assessment when it comes to estate planning?
A. When it comes to will writing and estate planning, there are a number of issues relating to mental health that require consideration from both the individuals and the advising professionals involved.
When a client is seeking to make a will or carry out vital estate planning, advisers should always be aware of, and stay alert to, any mental health considerations that could affect the client’s capacity to undertake their planning.
It is crucial to remember that just because a client suffers from a mental health illness, it does not mean they are presumed not to have capacity.
However, they may require further support when making decisions and, if there is any doubt about a client’s capacity, an independent capacity assessment may be required.
Professionals should also be aware that individuals suffering from mental health conditions may be more susceptible to influence from third parties who may seek to take advantage of the individual, or who may indeed believe they are acting in the best interests of the client but without realising their impact or level of influence over the individual.
This can result in that individual not necessarily making their own decisions.
Furthermore, clients may suffer from mental health conditions that are temporary as a result of their personal circumstances, for example a period of grief following a bereavement.
That could also affect their ability to make clear, rational decisions, even as far as affecting their mental capacity during that period.
This precise issue was recently highlighted in a contested probate case that was decided after a lengthy court battle between two siblings over the validity of their late mother’s wills.
The case centred around whether the mother had the capacity to make the two wills in question, and also whether either or both wills resulted from fraudulent slander.
For context, when she died in 2017, she left all of her estate to her son.
Both of the wills she had written before her death contained allegations about her daughter, including that she was a ‘shopaholic and would fritter it away’ and allegations of theft from another daughter who had predeceased her.
The surviving daughter challenged both wills, arguing that her mother was suffering from grief following the death of her daughter which made her suffer from ‘insane delusions’ and ‘poisoned her mind’ against her.
The judge found there was sufficient evidence that the deceased had suffered from ‘affective grief disorder’ which included a complex grief reaction and persistent depression that had impaired her testamentary capacity.
He therefore decided that neither will could be admitted to probate, and the deceased was therefore ruled to have died intestate.
It is not only the mental health of the client that may be relevant for estate planning, but the mental health of potential beneficiaries could be a relevant consideration as well.
It could be that a beneficiary may be unable to manage a lump sum of money themselves, for example they may not spend the money wisely, or they might be vulnerable to third parties.
Likewise, if they are in receipt of certain benefits, receiving a lump sum of money outright could mean that they no longer qualify under means-tested assessment rules.
In these circumstances, it may be more prudent to use discretionary trusts within the client’s estate planning, allowing them to nominate trustees to manage the money on behalf of the beneficiary.
This is usually done in accordance with a letter of wishes setting out the client’s intentions and wishes for how the money should be used.
Libby Holding is legal services director at The SimplyBiz Group
