Branislav Kostic died an extremely wealthy man. Having just passed his 80th birthday, Mr. Kostic died in England in October 2005 leaving an estate valued at approximately $16 million. What happened to his estate is a lesson to each one of us with respect to making our wills in a timely fashion, while healthy and in complete control of our faculties.

Before I get to the legal issues, let me give a little background. Mr. Kostic was born in 1925 in what was then Yugoslavia and what is now Serbia. After fighting against the Nazis in 1945 and being severely wounded, he recovered and went on to study chemistry. Mr. Kostic developed a very successful pharmaceutical company in England, hence his considerable fortune.

Very unfortunately, beginning in 1984, Mr. Kostic developed a serious and untreated mental illness that took the form of a delusional disorder. Mr. Kostic believed that there was an international conspiracy against him "on a ginormous scale".

It was while suffering from this mental illness that Mr. Kostic executed his last will in the late 1980s by which he left his entire estate to the British Conservative Party. By this will, Mr. Kostic effectively disinherited his only son who, in the High Court in England in October 2007, successfully challenged this will on the grounds that Mr. Kostic lacked "testamentary capacity".

The High Court Judge decided that Mr. Kostic's decision to disinherit his son was heavily influenced by his delusions and in particular by his belief that his son was implicated in the global conspiracy that he imagined was being pursued against him. The Judge also found that Mr. Kostic's decision to benefit the British Conservative Party was a result of these delusions.

For example, there was evidence before the court that Mr. Kostic had written directly to Margaret Thatcher after the onset of his delusions making a donation to "fight the evil wicked demons". While the Judge accepted that Mr. Kostic may have been a natural supporter of the Conservative Party, he found that Mr. Kostic's extremely generous gift had been a result, not of rational thought, but of his belief that this political party could help him in his fight against the global conspiracy that he had imagined. The result of this very expensive litigation was that the British Conservative Party did not receive Mr. Kostic's millions. Mr. Kostic's son inherited his father's estate under an earlier will that had been executed when Mr. Kostic was in sound mental health.

The test that is applied in Bermuda to decide whether or not a person making a will has sufficient mental capacity is the same as that applied in the Kostic case. This test is fairly easy to state but often difficult to apply in practice. A person making a will must have sufficient mental capacity to understand the nature of the act of making a will and what the effects of the will are.

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