Capacity to make gifts, settle property and contract
Capacity to make gifts, settle property and contract

The following Private Client guidance note provides comprehensive and up to date legal information covering:

  • Capacity to make gifts, settle property and contract
  • The common law presumption of capacity
  • The statutory test for capacity
  • Capacity to make gifts
  • Capacity to settle property
  • Capacity to contract

Mental capacity is the ability to perform a specific juristic act by understanding and making a decision to do something that has legal consequences such as to make a Will, a power of attorney or a gift or to provide consent for something. Lack of mental capacity is the inability to do something or to provide consent for something by reason of a mental disorder or disability. This lack of capacity may well fluctuate. It will also vary according to the function that requires the decision or consent and for this reason, mental capacity is referred to as being 'function-specific'.

The common law presumption of capacity

In the common law, every person is presumed to have mental capacity until the contrary is proved. Where a person has been proved or admitted to have been so mentally disordered as to lack the capacity to make a contract or disposition, such a condition is presumed to continue until it is proved to have ceased, and the burden of proving a recovery or a lucid interval lies on the person alleging it.

The statutory test for capacity

Since 1 April 2007 the Mental Capacity Act 2005 (MCA 2005) has provided a statutory test for capacity and this should be the starting point to determine a person's capacity. Nothing in MCA 2005 expressly