Different Levels of Capacity

One of the most misunderstood concepts in estate and capacity litigation is the idea that a person either “has capacity” or “doesn’t.” In Ontario law, capacity is not a single, global condition. It is task-specific, context-specific, and variable. The level of mental capacity required depends on what the person is doing — and courts have consistently recognized that the more serious or financially consequential the act, the higher the level of understanding required.

This principle becomes critically important in disputes involving marriages, wills, powers of attorney, and large inter vivos gifts.

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Capacity Is Not One Size Fits All

Ontario courts have long accepted that different legal acts attract different legal tests. A person may be capable of doing one thing, but not another.

The classic expression of this idea comes from Re Beaney (Deceased), [1978] 2 All E.R. 595, at p. 601, a case frequently cited in Ontario, where the court held:

“The degree of understanding required is relative to the particular transaction… The graver the transaction, the greater the understanding required.”

Ontario courts have repeatedly adopted this reasoning. It underpins why the threshold for capacity to marry is low, while the threshold to make a will, grant a power of attorney, or give away substantial assets is meaningfully higher.

See: Laur v. Estate of Rosemary Eileen Ball et al, 2025 ONSC 1366 (CanLII)

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Capacity to Marry: A Low Legal Threshold

The capacity to marry is one of the lowest recognized thresholds in Ontario law.

A person need only understand:

• the nature of the marriage contract; and
• the duties and responsibilities that normally flow from marriage.

They do not need to understand the detailed financial or estate consequences.

In the case of Tanti v Tanti et al., the Ontario Superior Court of Justice looked to determine if the person in question, Paul, was capable of marrying a “much-younger, live-in companion”. Many doctors assessed the man and determined that he was not capable of granting a power of attorney. However, they had not considered capacity to marry.

Justice Mandhane determined that capacity to marry was met in this case. He considered that the parties met the test for capacity by looking at:

1. the couple’s relationship prior to the marriage;
2. Paul’s cognitive capacity leading up to and immediately after the marriage;
3. Paul’s understanding of the marriage ceremony and vows, and the obligations it created; and
4. Paul’s interactions with professionals contemporaneous to the marriage.

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Capacity to Make a Will: A Higher, Structured Test

The capacity to make a will is more demanding.

Ontario applies the longstanding common-law test from Banks v. Goodfellow (1870), requiring that the testator:

1. Understand the nature of the act and its effects;
2. Understand the extent of the property being disposed of;
3. Appreciate the claims of those who might expect to benefit; and
4. Not be affected by a disorder of the mind that influences the dispositions.

This test requires more than surface-level awareness. It requires an ability to hold multiple concepts in mind, weigh relationships, and form a rational plan of distribution. Accordingly, a person may have capacity to marry but lack testamentary capacity.

Although Banks v. Goodfellow is an 1870 case, it has stood the test of time and continues to be cited as the authority on testamentary capacity in Canada.

In Banks, the testator suffered from delusions including a belief that he was being persecuted by the devil. Although he was considered insane (the language at the time), it was determined he had the capacity to make a will as the delusions has no influence on his determination of how he wished to arrange his financial affairs.

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Capacity to Grant a Power of Attorney

Ontario’s Substitute Decisions Act, 1992 creates statutory tests for granting powers of attorney.

To grant a POA for property, a person must understand, among other things:

• the nature and extent of their property;
• what the attorney will be able to do;
• that the attorney must account; and
• that misuse may occur.

To grant a POA for personal care, the person must understand whether the proposed attorney genuinely cares about their welfare and appreciates that the attorney may make personal decisions on their behalf.

These tests are often more demanding than testamentary capacity, because they involve forward-looking risk assessment and delegation of broad authority.

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Capacity to Make Major Gifts: Often the Highest Threshold

Where the law becomes most exacting is in relation to significant inter vivos gifts.

Ontario courts have consistently held that giving away substantial assets during life requires a high level of understanding.

A person will need to be able to understand the nature of the gift being made, how it will be made and the consequences of making that gift. Where the gift forms a significant proportion of their estate, consideration will need to be given to the four limbs of the case law of Banks v Goodfellow (1870)- the established test for capacity to make a Will. The greater the gift in relation to the entirety of the estate, the more weighting needs to be applied to Banks v Goodfellow.

This distinction becomes especially important in disputes involving last-minute transfers, joint accounts, or asset stripping shortly before death.

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Why These Distinctions Matter in Litigation

These different thresholds explain why estate and capacity disputes so often involve mixed findings:

• capable to marry, but not to make a will;
• capable to make a will, but not to give away millions of dollars;
• capable to manage daily life, but not to delegate sweeping legal authority.

They also explain why medical evidence alone is never determinative. The legal question is not whether a person had “dementia” or “confusion,” but whether they met the specific legal test at the specific time for the specific act.

For litigators, this makes the framing of the issue critical. The wrong capacity test leads to the wrong evidence — and often the wrong result.

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Conclusion

Ontario law does not treat capacity as an on-off switch. It recognizes a spectrum of decision-making, calibrated to the seriousness of the act. Marriage requires a basic understanding of the marital relationship. A will requires a structured appreciation of property and moral claims. Powers of attorney demand insight into risk and delegation. Major gifts often require the highest level of financial comprehension.

As the value and impact of the decision rise, so does the level of capacity the law demands.

Understanding these distinctions is essential for anyone navigating will challenges, marriage disputes, powers of attorney litigation, or claims involving large lifetime transfers.