Dispositions inter vivos
For dispositions inter vivos made by an instrument (i.e. transferring or giving away property or assets during one’s lifetime), section 22 of the Conveyancing and Property Ordinance (Cap. 219) provides that a person has the capacity to execute such an instrument unless the contrary is proven.
In deciding whether a person in fact has the capacity to make an inter vivos disposition, the court will consider the alleged MIP’s degree or extent of understanding in respect of the particular instrument as relative to the particular transaction which it is to effect: Re Beaney [1978] 1 WLR 770. How much understanding is required depends on how important the transaction is. If the gift or transaction is small or unimportant compared to the person’s overall assets, then only a basic level of understanding is needed. But if the disposition gives away the person’s only valuable asset, then the level of understanding they must have is as high as what is required to make a valid will.
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