Q: My elderly widowed mother will need to move to an Aged Care facility in the new year as she needs support beyond what she received under her current home care package. We don’t have an Enduring Power of Attorney in place, and she has been diagnosed with early-stage Dementia. Are we able to act on her behalf?
A: An Enduring Power of Attorney is a legal agreement that enables a person to appoint a trusted person, or people to make financial and/or property decisions on their behalf. An Enduring Power of Attorney is an agreement made by choice that can be executed by anyone over the age of 18, who has full legal capacity.
Under the law, adults are presumed to have the capacity to make their own decisions unless it can be shown that they lack capacity. If your mother is struggling to make decisions and manage her own affairs, you should speak to a Health Professional and request a capacity assessment test be undertaken. The decision as to whether she has lost capacity would typically be made by a Neuropsychologist, a Geriatrician or a psychiatrist referred by your mother’s GP.
If the medical opinion is that your mother has lost legal capacity, she will be unable to grant you an Enduring Power of Attorney. Without an Enduring Power of Attorney, you will be unable to make financial decisions on her behalf.
Once she has been deemed to have lost legal capacity, generally any contract signed by your mother after the diagnosis, becomes invalid or unenforceable.
A notable exception to this rule is the admission of an individual to an Aged Care facility. Section 96–5 of the Aged Care Act specifically allows another person to enter into an agreement on behalf the care recipient in the event the care recipient lacks capacity.
This is a very useful provision that is often overlooked, however it only applies to agreements entered into under the Aged Care Act 1997.
If your mother currently has legal capacity, then establishing an Enduring Power of Attorney and Enduring Guardianship should be a matter of priority. Speak to a solicitor who is an estate planning expert.
Whilst you are speaking to the solicitor, it might be timely for your mother to review her Will to ensure the Will is up to date and reflects her wishes. Typical examples of issues where Wills need to be updated will include, the original Will is lost, executors are dead, bequests are in place for assets that no longer exist and beneficiaries who may be dead or unknown to the executor.
Regardless of whether your mother is happy with her current Will, locating a copy of the Will and checking its validity should be an important start and could save considerable inconvenience and expense later on.
Q: If my mother is deemed incapable of making her own decisions or managing her own affairs, what are our options?
A: In the absence of a valid Enduring Power of Attorney, you would need to make an application to the Civil and Administrative Tribunal (CAT) in your state for a Financial Management Order to obtain control over your mothers financial affairs. Information can be found on your State’s CAT website outlining the application process and what you need to consider. If you are a resident of NSW the website is www.ncat.nsw.gov.au
Once a Financial Management Order is granted, you should be able to manage your mother’s financial affairs. You need to be aware that CAT can be appointed as a co-financial manager under a Financial Management Order. This would mean that financial and legal decisions you make on her behalf may need to be passed and approved by CAT on an ongoing basis. Furthermore, you may be required to report back to CAT on an annual basis updating them on your mother’s personal and financial circumstances.
You also need to be aware that Financial Management Orders do not cover day-to-day lifestyle or care decisions. A separate application will need to be made to obtain Guardianship Orders. A Guardianship Order allows CAT to appoint you as your mother’s guardian to make personal, medical and lifestyle care decisions.
Having to apply to CAT for Guardianship or financial management may cause considerable inconvenience and delays in managing your mother’s financial and personal care needs.
If your mother currently has legal capacity, then establishing an Enduring Power of Attorney and Enduring Guardianship should be a priority now.