“For example, if you have a will that's been signed and witnessed properly, it's presumed that the person who made that will has capacity. If there's a diagnosis of dementia and there's evidence that that was advanced at the time the person signed the will, then that possibly would be sufficient to rebut that presumption of capacity.

“It doesn't mean that the person signing the will didn’t have it. It doesn't mean that the person signing the will couldn't have signed their will, but what it means is we don't have that starting point anymore that the document is valid.”

Camm said capacity is important in understanding not just wills but also situations such as inter vivos transactions.

She continued that the case of Gibbons v Wright (1954) 91 CLR 423) sets the basis for the principle that the test for capacity depends on the document that you're signing.

“This case was about some siblings who owned a property as joint tenants, and they severed that joint tenancy. They signed a transaction to sever the joint tenancy. The person challenging that decision said they didn't understand what they were doing by severing that joint tenancy as they owned it as tenants in common,” Camm said.

“What the court said was that there's no fixed standard that you have to reach to say you have capacity for all matters. Every financial transaction that you're signing is different, and for the transaction to be valid, the party needs to be capable of understanding the general nature of what they're doing.”

In this case it was important that the person understood why they were severing the joint tenancy, and that the property would be transferred to the estate rather than automatically passing to the joint co-owners.

“That's a more complicated transaction. That test is then reflected in our case law, in our legislation, about what does capacity mean? The importance of this case is the interplay between losing capacity, declining cognition, lost capacity. You get to a line where you don't have capacity to sign that document anymore,” Camm explained.

She added that in this case, the father transferred property to the daughter to make sure that the property didn't fall into his estate and if the son made an estate claim that the property wasn't going to be available.

“To satisfy that claim, the son challenged the transfer of property on the basis that the father lacked capacity,” Camm said.

“The Queensland Civil and Administrative Tribunal said he may have had capacity to make that transfer, but because his cognition was declining and he heavily relied on his daughter, and as his daughter was his attorney under an enduring power of attorney, there was a level of understanding there, which meant that the transaction was invalid even if that father still had capacity to make that specific decision.

“It is important to think about all the different issues that are going on here, and make sure that we're getting the background circumstances and getting some evidence together about whether that undue influence was there. The issue in this case was that there was no evidence to prove that the father really did make this decision freely and voluntarily, despite his reliance on his daughter.”