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Last month, we published an article talking about estate planning for vulnerable individuals, such as those living with disabilities or life-limiting conditions.
In it, we referred to “capacity” – otherwise known as “mental capacity” – meaning the ability to make decisions and understand the consequences of them.
It is useful to understand how your own mental capacity, and that of your family, could affect your wealth now and in the future.
Inheritance disputes are rising, and capacity is a key issue
Applications to block probate reached an all-time high in 2025. [1]
In part, this could be because people are living longer on average. A man who turns 65 in 2026 has an average life expectancy of 85 and a 1 in 10 chance of living to 96; the average woman the same age may live to 88, with a 1 in 10 chance of reaching 98. As such, it stands to reason that the issue of cognitive decline will only become more prevalent. [2]
There are nearly a million people living with dementia in the UK, and this is estimated to rise to 1.4 million by 2040. With age being the strongest known risk factor for dementia, the chance of you experiencing a lack of mental capacity in the later stages of your life may be greater than you imagined. [3]
Of course, dementia is not the only way a person can lose mental capacity. A health event, such as a stroke, could change your life overnight. Likewise, a serious mental illness can cause a person to lose capacity either permanently or temporarily.
If you create a will without full mental capacity, it could be overturned
Such was the case for a family who recently won a lengthy legal battle to overturn a will made in 2014.
The four daughters of a deceased man, Michael Gwilliam, fought to have his will overturned on the grounds that Gwilliam had developed schizophrenia late in life, which was proven to be true. Gwilliam’s illness led him to believe that his daughters were attempting to steal money from him, resulting in him amending his will when he did not retain the mental capacity to do so. [4]
While this particular set of circumstances is certainly rare, it is one of countless examples where capacity and wealth management collide. If you create or amend a will and your capacity is called into question, it could later be declared invalid and your estate left to beneficiaries according to the laws of intestacy, which may not be in line with your wishes.
To avoid uncertainty, it is usually prudent to:
- Create a will as early in life as possible
- Amend it after any changes to your circumstances
- Have the will witnessed by a trusted legal professional and, if you wish to take a belt-and-braces approach, your GP, whose signature stands as testament to your mental capacity.
Financial capacity and full mental capacity can be assessed separately
Capacity assessments are sometimes necessary to determine whether a person can safely and knowledgeably make choices for themselves.
What most people do not know is that financial capacity can be assessed separately from general mental capacity. A person may be deemed to have capacity generally, but in some cases, may be deemed not to have financial capacity if they struggle to understand money, how it functions, and the consequences of financial decisions.
If someone is deemed not to have financial capacity, there are a few options:
- If they have a Lasting Power of Attorney (LPA) in place for property and financial affairs, their attorney(s) would be required to take over the management of their wealth.
- Without an LPA in place, a close family member, friend, or professional deputy would need to apply to the Court of Protection to assume authority over the person’s estate.
While you may never be in this position, it is worth knowing that capacity is a very important facet of your long-term financial security. Being prepared for the unexpected means your family may experience less distress and your wealth is likely to be better protected if you lose capacity.
Long-term wealth planning could be integral to securing your legacy
Managing a large estate and preserving it for the generations to come takes time, knowledge, and foresight.
Our highly experienced and dedicated wealth planning team can help you meet your goals and prepare for life’s unexpected twists and turns.
To discuss anything you have read about here, contact your Relationship Manager or email info@ipscap.com for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate Lasting Powers of Attorney, will writing, or estate planning. IPS Capital does not provide tax or legal advice.
Sources
[1] 20.05.2025 Applications to block probate rise to all-time high Legal Futures
[2] 18.02.2026 Life expectancy calculator Office for National Statistics
[3] 10.05.2024 How many people have dementia in the UK? Alzheimer’s Society
[4] 30.01.2026 Will overturned as High Court clarifies law on testamentary capacity and mental illness Today’s Wills and Probate
