Australia is facing a tsunami of widespread mental incapacity among the largest and wealthiest segment of our population. Advances in mental health have not kept pace with advances in other areas of medical science.
According to Alzheimer’s Australia, more than 340,000 Australians currently have dementia, and that number is expected to reach nearly 900,000 in the next 35 years unless a medical breakthrough occurs. These grim statistics highlight the need for everyone to plan ahead so that their medical and financial needs are met should they ever become mentally incapacitated.
When it comes to Wills & estate planning in Adelaide, you can trust the oldest law firm in South Australia, Genders & Partners to guide you through the tough decisions you must make for your future care and financial welfare.
In South Australia, mental incapacity means that a person is unable to manage their affairs in their own best interests as the result of an illness or impairment of the brain or mind. This definition also extends to conditions that render a person unable to express their intentions regarding safety and welfare. A person who is mentally incapacitated may not understand or remember information or have the ability to anticipate the consequences of certain choices. Mental incapacity is decision-specific, which means that a person may fully understand certain things, such as his or her health condition, but still be unfit to make other decisions, such as those relating to financial investments. Declaring someone mentally incapacitated is a process that typically commences gradually among family members and then progresses to require formal assessment by medical and legal experts.
Planning Ahead for Incapacity
Although the thought of being unable to manage your own affairs at some point may be unpleasant, the time to plan is now. A vital component of Wills & estate planning in Adelaide is an enduring power of attorney, which appoints a trusted person to take care of your financial and legal affairs should you be unable to do so. Otherwise, a Government Tribunal will appoint someone such as the Public Trustee to manage affairs on your behalf, and this person may not be one of your top choices. An Advance Care Directive is also essential as it appoints someone to make medical, lifestyle, accommodation and personal decisions for you. Advance care planning empowers you to choose a person who has your best interests at heart instead of relying on the Guardianship Board to make that decision.
For family members of older people, the question of how to deal with the impact and consequences of their parents losing mental capacity in old age is especially challenging.
The first concern for many families will be to determine if the parent has validly created an Enduring Power of Attorney for legal & financial decisions, and an Advance Care Directive for medical and personal decisions.
In South Australia, if a delegate is not named in advance, a family member will need to apply through a formal legal process that can be frustrating, stressful and intimidating, especially during a crisis. Delays in making this application can be disruptive to the orderly management of the patient’s finances at a crucial time, and assets may be frozen during the process. Having delegated authority under power-of-attorney already in place before the crisis hits is essential to achieve continuity in the management and administration of the patient’s finances. Like insurance, you must not wait until the disaster strikes before putting protection in place, or you will be too late. If you wait until your aged parent is already showing signs of being affected by Alzheimer’s, it could be too late for them to create the legal documents needed to help them. Once they have lost their capacity, they tend not to regain it. And if they lack capacity, they won’t be able to appoint you or anyone else to act as their agent without an order from a Court or Tribunal.
At the coal-face, when you are acting as Agent for someone else (known as “the Principal”), and have responsibility for making financial decisions for them, there are a few key points that you must deal-with right away.
First, secure the Principal’s assets. Unfortunately, elder abuse is very common and assets need to be protected quickly and thoroughly. Document your actions and keep written records and receipts. You can be called-to-account for what you do with their assets & money. Make sure you protect yourself by keeping good records.
Some assets might have to be re-located in order to protect them, especially if the Principal has been required to leave their normal residence during a health crisis. Once assets are secured, you will need to determine which ones should be insured, if they are not already.
Second, establish a budget to accommodate all of the Principal’s needs, including their care plan. If you are not also responsible for making health-care decisions for the Principal, you will need to confer with them to ensure you are both working for the benefit of the Principal.
Third, you may need to invest assets to guard against “wasting”. This may require a balance of short-and-longer term considerations, such as whether to retain the Principal’s home as a non-performing asset if they are likely to return to it, or possibly selling it to invest the proceeds or purchase more suitable accommodation. There are rules and laws requiring the making of prudent investments.
You will need to pay the bills, file taxes and manage the entire financial situation for the Principal.
Adelaide Wills and Estate Planning
At Genders & Partners, we specialise in Wills, estate planning, probate & deceased estates in Adelaide, so contact our law office today to schedule a free telephone consultation. Expert estate planning advice now can ensure peace of mind for you and your loved ones in the future. Death, taxes and illness may be inevitable, but they don’t have to ruin your family. Contact Genders & Partners today to ensure peace of mind, and help protect yourself, your family and your assets.
SPECIAL REPORT “7 Things You Must Know Before You Make Your Will”
In this report you will Learn:
Why home-made Wills can be a LOT more expensive than you might think.
The secret weapons used by the rich & powerful to protect their assets, and transfer their wealth two or three generations ahead.
How Estate and Trustee Companies make BIG money from “free” Wills.
The Most Common Estate Planning Mistakes, how they can cost your family a fortune, and How to Avoid Them.
The Elements of a Sound Estate Plan – why a Will alone is not enough.
How to Make Sure Your Assets Stay in Your Family and are not lost to creditors, lawsuits or ex-spouses.
How to guard against challenges to your Estate after you’re gone.