The British Columbia Law Institute (BCLI), formerly known as the Law Reform Commission of British Columbia, is a not-for-profit law reform agency that works to improve and modernize the law.  BCLI has had significant influence on important changes in the law in many different areas.  Most recently, many of its recommendations in areas of family and estates law have been accepted by the Provincial government and have resulted in legislative changes.

BCLI has recently released its Report on Common-Law Tests of Capacity.  This report follows BCLI’s release of its Consultation Paper on Common-Law Tests of Capacity earlier in the year.  See the March 4th, 2013 blog post written by Clark Wilson’s Raman Johal for a brief overview of the paper.

The report was the final stage of the Rationalizing and Harmonization of BC Common-Law Tests of Capacity Project.  The project’s purpose was to make recommendations related to mental capacity required to enter into certain transactions or relationships.  The report contains the project’s final recommendations for reform.

The report focuses on the elements of tests of capacity that have been developed by the courts over the years.  These tests are known as “common-law tests of capacity.” 

The report does not recommend making substantive changes to common law tests of capacity to make a beneficiary designation, to marry, to form the intention to live separate and apart from a spouse, or to enter into an unmarried spousal relationship.  The report does, however, make some of the following recommendations for reforms.

Capacity to Make a Will

While the report does not propose any reforms to the test of capacity to make a will, it proposes a legislative presumption of capacity to make a will.  In other words, until the contrary is demonstrated, every will-maker would be presumed to be capable of making, changing, or revoking a will. 

Wills for Individuals Who Lack Testamentary Capacity

Perhaps most interestingly, the report recommends that British Columbia enact legislation creating a court-based procedure to allow people with diminished capacity to make a will.  The recommended procedure would be modeled on existing statutory-will procedures in the United Kingdom and Australia.

Certification of Testamentary Capacity Before the Death of the Testator 

In certain American states, it is required to make an application to court for a declaratory order that a person has the mental capacity to make a will at the time when the will is executed.  The report does not recommend that this procedure be implemented in British Columbia.  The report states that this procedure would be of limited utility, as it has not proved to be significantly effective in stemming estate litigation in the handful of American states that have adopted it.

Capacity to Make a Gift

The report recommends adopting a test of capacity to make an inter vivos gift (i.e. a gift that is made during a person’s lifetime) that is similar to the test of capacity to make a will. 

Capacity to Nominate a Committee

A committee is someone who will make decisions on the person’s behalf if the person is ever found to be incapable of managing his or her person or affairs.  The report recommends for British Columbia to enact legislation that provides the test of capacity to nominate a committee under section 9 of the Patients Property Act or a guardian under section 8 of the Adult Guardianship Act to be the same as the test of capacity set out in section 10 of the Representation Agreement Act.

Capacity to Retain Legal Counsel

The report proposes a number of reforms to help improve access to legal services in situations where a person’s mental capacity is at issue and in creation of a representation agreement.

Next Steps

This report is submitted to the Provincial government for review and consideration.  While it may result in changes to existing law, we do not expect changes to occur any time soon.