Dementia, Capacity and the Will: Why Australia’s Fastest-Growing Health Crisis Is Reshaping Estate Planning
- Justeen Dormer
- 4 days ago
- 3 min read
Estate Planning
Dementia has become the leading cause of death in Australia, and its rapid increase brings significant implications for wills, estate planning, and resolving will disputes. These changes impact families, executors, and anyone involved in succession matters. For many, a common question is: “Can someone with dementia legally make or change a will?”
A Growing National Crisis with Legal Consequences
Australia faces an unprecedented health challenge. The number of people living with dementia has surged, especially among older Australians. According to the Australian Institute of Health and Welfare, over 425,000 Australians were living with dementia last year, equalling 16 per 1,000 people.
The likelihood of dementia rises sharply with age, climbing from fewer than 1 in 1,000 for those aged 30–59, to 210 in 1,000 among those aged 85–89. Women make up nearly two-thirds of dementia cases. Projections indicate that by 2065, more than 1.1 million Australians will be living with dementia, a dramatic rise that families and legal professionals need to prepare for.
For individuals in New South Wales and across Australia, the legal consequences of dementia are immediate and personal, impacting whether a will stands, how estates are administered, and who inherits.
Testamentary Capacity at the Centre of Estate Disputes
A central issue now at the heart of many will disputes is testamentary capacity: Does a person have the legal capacity to make a valid will if they have dementia? This is one of the most asked questions, especially by family members in blended families or when a will is changed late in life.
To prove testamentary capacity, several standards must be met at the time the will is made. The person should:
Understand what it means to make a will and its effects
Know the nature and extent of their assets and property
Recognise the people who may have a reasonable claim to their estate
Be free from a mental disorder or delusions that could influence decisions about their will
It is essential to know that a dementia diagnosis does not automatically mean a person lacks the capacity to make a will. Courts in Australia determine capacity on a case-by-case basis, focusing on the person’s understanding and decision-making at the time the will was completed. This means that even those with early-stage dementia can, in some cases, still make valid and legal decisions about their estate.
Banks v Goodfellow and the Legal Test for Capacity
The assessment of testamentary capacity relies on the well-established legal test from Banks v Goodfellow, which remains highly relevant in Australian succession law, especially when dementia, psychiatric, or neurological conditions are involved.
Under this test, if the necessary legal criteria for capacity are not satisfied, the will can be set aside as invalid. If a will is found to be invalid, one of two things will usually happen:
A previously valid will (if one exists) will be used to distribute the estate
If no earlier will exists, assets are shared according to the laws of intestacy, which may not match the deceased’s true wishes
This risk explains why estate planning and capacity assessments are now more important than ever, especially for those diagnosed with or at risk of dementia.
Rising Dementia, More Disputed Wills
A sharp rise in contested wills has been reported across Australia, with many disputes centred on issues of capacity. This trend is driven by the rising number of dementia cases, increased life expectancy, and the passing down of significant family wealth.
Common reasons to challenge a will include doubts about the person’s mental capacity, claims of undue influence, or changes made late in life. These situations can be both stressful and costly, highlighting the importance of early, expert legal guidance. If you are worried about your rights in an estate dispute involving dementia, or how to prove or contest capacity, it is critical to seek advice from a succession law expert.
The Importance of Early and Proactive Planning
Given the reality of rising dementia rates, starting estate planning early and documenting capacity clearly are essential for protecting your intentions and reducing possible challenges. If you are asking, “How can I ensure my will won’t be challenged due to dementia or capacity issues?” the answer is early action and professional support.
Best practices for families, executors, and those planning wills include:
Creating or updating your will before cognitive issues arise
Keeping detailed records of discussions and decisions about your estate plan
Obtaining contemporaneous medical evidence confirming capacity, especially for those with early-stage dementia
Seeking multidisciplinary input where needed
This approach not only safeguards your wishes but also makes it much easier to defend your will if it is later contested by family members or others.
Dementia is changing the landscape of Australian succession law and estate planning. As this health crisis continues to grow, both families and legal professionals must adapt by ensuring wills are carefully prepared and capacity is properly assessed.