The Mental Capacity Act 2005 (MCA 2005) sets out the legal principles to be applied when determining whether an individual has capacity.
Section 2(1) provides that: “a person lacks capacity in relation to a matter if at the material time he is unable to make a decision for himself in relation to the matter because of an impairment of, or a disturbance in the functioning of, the mind or brain”.
Under section 3(1), a person is unable to make a decision if they are unable to:
- (a) understand the information relevant to the decision;
- (b) retain that information;
- (c) use or weigh that information as part of the process of making the decision; or
- (d) communicate their decision.
It is an important principle of MCA 2005 that capacity is both decision-specific and time-specific. It is therefore possible for a person to have capacity to make some decisions but not others, or to have capacity at one time but not another.
Whilst the statutory test in MCA 2005 sets out the general rules surrounding whether an individual has capacity, the Courts have developed specific tests to confirm the level of capacity required for different legal decisions.
Capacity to make a gift
Capacity to make a lifetime gift is set out in Re Beaney [1978]. The test is whether an individual would have been capable of understanding the value of the gift and the effect of making the gift if the consequences had been fully explained to them. The extent of understanding required varies depending on the size, nature and circumstances of the gift. For example, if the effect of the gift was to dispose of the donor’s only asset of value, the degree of understanding required is as high as that required for a Will.
Capacity to marry
Sheffield City Council v E [2004] outlines capacity required to marry. The key components of the test are:
- the person must understand the nature of the marriage contract;
- the person must understand the duties and responsibilities normally attached to marriage, including that there may be financial consequences; and
- capacity to marry is distinct from the wisdom of the marriage (i.e. the test is act-specific not person-specific).
In Re DMM [2017], the court held that the test for capacity to marry should not be set too high because to do so would be “an unfair, unnecessary and discriminatory bar against those with capacity issues potentially denying them that which all the rest of us enjoy”.
Capacity to litigate
The leading authority on capacity to conduct litigation is Masterman-Lister v Brutton & Co [2002]. The test set out by the court is whether the party to legal proceedings is capable of understanding, with the assistance of their legal advisors and any necessary experts, the issues on which their decision or consent is likely to be necessary in the course of those proceedings.
Capacity to make a Lasting Power of Attorney
The case of The Public Guardian v RI & Ors [2022] set out that the donor needs to understand:
- the effect of the LPA;
- who the attorneys are;
- the scope of the attorneys’ powers;
- when attorneys can exercise their powers, including the need for the LPA to be registered with the OPG before it is effective;
- the scope of the assets the attorneys can deal with under the LPA;
- the power of the donor to revoke the LPA whilst they have capacity to do so; and
- the ‘pros and cons’ of executing the particular LPA and of not doing so.
Capacity to make a Will
Capacity to make a Will (known as testamentary capacity) is currently governed by the 1870 case Banks v Goodfellow under which a testator must:
- understand the nature of making a Will and its effects;
- understand the extent of the property they are disposing;
- be able to comprehend and appreciate the claims of those who might expect to benefit; and
- be free from any delusion of the mind that would affect the will-making process.
In the recent case of Leonard v Leonard [2024], the court considered whether a testator who had shown signs of cognitive decline from 2013 had capacity to execute a Will in 2015. The judgment contains helpful commentary on the test in Banks v Goodfellow, clarifying that the first limb requires a consideration of the provisions of the particular Will under consideration rather than simply an ability to understand the effect of a Will in the abstract.
The importance of recording contemporaneous assessments as to testamentary capacity was reinforced by the case of Crew v Oakley [2024], in which the court considered whether a 92-year-old testator had validly revoked her Will. The judge found that the testator had capacity to make the revocation and paramount to this finding was the fact that a detailed attendance note had been taken by the solicitor who had expressly considered the test in Banks v Goodfellow.
Rather confusingly, while Banks v Goodfellow remains the yardstick by which the Courts will retrospectively assess capacity, the Court of Protection uses the statutory test in MCA 2005 when assessing whether it can make a statutory Will on a person’s behalf.
This issue was addressed at length in the Law Commission’s long-awaited report - Modernising Wills Law, published on 16 May 2025 - which sets out recommendations for reforming the laws relating to Wills. The Law Commission concludes that “there is no logical justification for two different tests” and recommends that: (1) the test set out in MCA 2005 should apply to all assessments of testamentary capacity to “bring consistency and clarity to the law”; and (2) the MCA Code of Practice should reference and explain the elements of the Banks v Goodfellow test in its guidance on testamentary capacity.
Alongside legal practitioners, the Government has welcomed the report as “an important and timely review of the existing law”. We will now have to wait for Parliament to consider and respond formally before finding out whether the Law Commission’s recommendations on reforming testamentary capacity will be implemented.
