Professional Advisor Role Where Capacity Is At Issue
(i) Capacity is a complicated concept in that each task or decision has its own standard determining capacity, and often the issues involved where capacity is in question can be less than crystal-clear, indeed downright complex. There is no clear hierarchy of capacity, in fact courts in general have resisted hierarchy and threshold levels of capacity as proper analysis. Courts are loath to say that one “test” (per se) to establish decisional capacity is higher or lower than another. Though, this does happen. In Covello v. Sturino 1, Justice Boyko was careful to distinguish the varying capacity standards as not necessarily higher or lower, but rather simply as different, stating: “this approach makes more sense, but inconsistency of treatment underscores the complexity of understanding”. The fact that there is no all-encompassing capacity” test” (per se/test is not an appropriate marker or descriptive) to apply or criteria to consider means that a drafting solicitor must at all times be mindful of the client’s capacity to complete the specific task at hand. This in effect means that a lawyer may be able to assist a client with competing one task, but not another – yet advice and discussion of options may suffice.
The message from our common law precedent suggests that the drafting solicitor should be satisfied that the client has capacity to give instructions for and execute the document in question, notwithstanding the presumption. This duty is particularly significant if the client is elderly, infirm, dependent, vulnerable, or if the instructions vary substantially from previous documents (wills, trusts, powers of attorneys, etc.) or where the instructions are not received from the testator directly. Solicitors are also wise to exercise additional caution in circumstances where the potential beneficiary brings the client to the office, and appears overly involved in the process.
(ii) Walman v. Walman Estate
http://canlii.ca/t/gfz95
A recent case before the Ontario Superior Court of Justice provides some guidance on the proper steps to be taken by drafting solicitors when determining testamentary capacity and probing for indicators of undue influence. In Walman v Walman Estate 2015 ONSC 185 Justice Corbett observed that the drafting solicitor “did several things ‘right’ in connection with [the] interview” with an older adult client, including interviewing the older adult alone, keeping good notes and asking questions that “facially, comport with the requirement of determining whether the testator understood the extent of his assets.”2 However, Justice Corbett found that in the circumstances of that particular case (the older adult suffered from Parkinson’s Disease and Lewy Body Dementia, and he was changing his will so his second wife would receive the majority of his estate and his three sons very little) the solicitor “needed to go further than that”. Not only should the solicitor have questioned whether the testator understood what his own assets were, but the testator should have understood what his wife’s assets were as well: “Had these issues been explored, [the solicitor] would have discovered what the case law refers to as ‘suspicious circumstances’ – recent transfers of substantial wealth from [the husband] to [the wife] that had the effect of significantly denuding [the husband’s] financial position to the benefit of [the wife]”.3 The Court found that the husband lacked testamentary capacity and that his will and certain transfers of capital to the wife were products of undue influence by the wife.4
As issues of capacity can cause complications and significant cost consequences many years after legal services have been rendered, a solicitor is well-advised to maintain careful notes when dealing with clients, and to turn his or her mind to the issue of capacity and assure him or herself that the client has the requisite legal capacity required to complete the task requested.
It is always the obligation of the drafting solicitor, to interview the client for the purpose of determining the requisite legal capacity for the task sought by the client. If the lawyer is confident that the client meets the standard for capacity, he or she should clearly indicate this in file notes. Those notes should be thorough and carefully recorded and preserved.
It is wise for lawyers to take their time in asking the client probing questions, to give the client a chance to answer carefully, to provide the client with as much information as possible about the legal proceedings. All questions and answers should be carefully recorded in detail. Lawyers should also consider seeking to corroborate the answers provided by the client, for example, relating to the extent of the client’s assets.
If the solicitor has serious concerns about the client’s capacity, it is worth discussing with the client the implications, benefits, or otherwise of having a capacity assessment to protect the planning in question.
The approach of professionals ought to be direct, yet sensitive.
Requests for capacity assessments should be clear and should concisely outline the legal criteria to be applied in assessing the specific decisional capacity that is to be met for the particular task sought. A capacity assessment that is not carefully written and that does not apply the evidence to the appropriate legal standard will be deemed deficient and unhelpful should a legal challenge arise in the future.
Lawyers have an important role to play where capacity is at issue. Solicitors must turn their minds to issues of capacity, undue influence and other red flags, including abuse, when discussing and preparing trusts, gifts, wills, contracts, powers of attorney, domestic contracts, and other legal documents. Capacity assessments should be discussed as well as risks associated therewith together with “rights” advise. Although the area of capacity is complex, the more information a lawyer has about the issues and interaction of applicable factors, and the state of the client’s abilities and understanding, the better protected both the lawyer and the client.
—
1. 2007 W.L. 1697372, 2007 CarswellOnt 3726 (ON. S.C.J.)
2. Walman Estate v. Walman 2015 ONSC 185 at para. 55.
3. Walman Estate v Walman 2015 ONSC 185 at para. 55
4. Walman Estate v. Walman 2015 ONSC 185 at para. 133.
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Written by: Kimberly A. Whaley
Posted on: February 16, 2015
Categories: Commentary
(i) Capacity is a complicated concept in that each task or decision has its own standard determining capacity, and often the issues involved where capacity is in question can be less than crystal-clear, indeed downright complex. There is no clear hierarchy of capacity, in fact courts in general have resisted hierarchy and threshold levels of capacity as proper analysis. Courts are loath to say that one “test” (per se) to establish decisional capacity is higher or lower than another. Though, this does happen. In Covello v. Sturino 1, Justice Boyko was careful to distinguish the varying capacity standards as not necessarily higher or lower, but rather simply as different, stating: “this approach makes more sense, but inconsistency of treatment underscores the complexity of understanding”. The fact that there is no all-encompassing capacity” test” (per se/test is not an appropriate marker or descriptive) to apply or criteria to consider means that a drafting solicitor must at all times be mindful of the client’s capacity to complete the specific task at hand. This in effect means that a lawyer may be able to assist a client with competing one task, but not another – yet advice and discussion of options may suffice.
The message from our common law precedent suggests that the drafting solicitor should be satisfied that the client has capacity to give instructions for and execute the document in question, notwithstanding the presumption. This duty is particularly significant if the client is elderly, infirm, dependent, vulnerable, or if the instructions vary substantially from previous documents (wills, trusts, powers of attorneys, etc.) or where the instructions are not received from the testator directly. Solicitors are also wise to exercise additional caution in circumstances where the potential beneficiary brings the client to the office, and appears overly involved in the process.
(ii) Walman v. Walman Estate
http://canlii.ca/t/gfz95
A recent case before the Ontario Superior Court of Justice provides some guidance on the proper steps to be taken by drafting solicitors when determining testamentary capacity and probing for indicators of undue influence. In Walman v Walman Estate 2015 ONSC 185 Justice Corbett observed that the drafting solicitor “did several things ‘right’ in connection with [the] interview” with an older adult client, including interviewing the older adult alone, keeping good notes and asking questions that “facially, comport with the requirement of determining whether the testator understood the extent of his assets.”2 However, Justice Corbett found that in the circumstances of that particular case (the older adult suffered from Parkinson’s Disease and Lewy Body Dementia, and he was changing his will so his second wife would receive the majority of his estate and his three sons very little) the solicitor “needed to go further than that”. Not only should the solicitor have questioned whether the testator understood what his own assets were, but the testator should have understood what his wife’s assets were as well: “Had these issues been explored, [the solicitor] would have discovered what the case law refers to as ‘suspicious circumstances’ – recent transfers of substantial wealth from [the husband] to [the wife] that had the effect of significantly denuding [the husband’s] financial position to the benefit of [the wife]”.3 The Court found that the husband lacked testamentary capacity and that his will and certain transfers of capital to the wife were products of undue influence by the wife.4
As issues of capacity can cause complications and significant cost consequences many years after legal services have been rendered, a solicitor is well-advised to maintain careful notes when dealing with clients, and to turn his or her mind to the issue of capacity and assure him or herself that the client has the requisite legal capacity required to complete the task requested.
It is always the obligation of the drafting solicitor, to interview the client for the purpose of determining the requisite legal capacity for the task sought by the client. If the lawyer is confident that the client meets the standard for capacity, he or she should clearly indicate this in file notes. Those notes should be thorough and carefully recorded and preserved.
It is wise for lawyers to take their time in asking the client probing questions, to give the client a chance to answer carefully, to provide the client with as much information as possible about the legal proceedings. All questions and answers should be carefully recorded in detail. Lawyers should also consider seeking to corroborate the answers provided by the client, for example, relating to the extent of the client’s assets.
If the solicitor has serious concerns about the client’s capacity, it is worth discussing with the client the implications, benefits, or otherwise of having a capacity assessment to protect the planning in question.
The approach of professionals ought to be direct, yet sensitive.
Requests for capacity assessments should be clear and should concisely outline the legal criteria to be applied in assessing the specific decisional capacity that is to be met for the particular task sought. A capacity assessment that is not carefully written and that does not apply the evidence to the appropriate legal standard will be deemed deficient and unhelpful should a legal challenge arise in the future.
Lawyers have an important role to play where capacity is at issue. Solicitors must turn their minds to issues of capacity, undue influence and other red flags, including abuse, when discussing and preparing trusts, gifts, wills, contracts, powers of attorney, domestic contracts, and other legal documents. Capacity assessments should be discussed as well as risks associated therewith together with “rights” advise. Although the area of capacity is complex, the more information a lawyer has about the issues and interaction of applicable factors, and the state of the client’s abilities and understanding, the better protected both the lawyer and the client.
—
1. 2007 W.L. 1697372, 2007 CarswellOnt 3726 (ON. S.C.J.)
2. Walman Estate v. Walman 2015 ONSC 185 at para. 55.
3. Walman Estate v Walman 2015 ONSC 185 at para. 55
4. Walman Estate v. Walman 2015 ONSC 185 at para. 133.
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