“Dad’s got Alzheimers!”
Protecting Your Inheritance – Alzheimers and dementia are curses of our time, but the loss of one’s capacity to look after oneself and one’s affairs can have other causes, and is not just a curse of the ageing.
Alzheimers is not just a disease of the aged, and there are other diseases which can lead to loss of mental capacity. We tend also to forget the possibility of brain damage from road or work accidents.
What happens legally when a loss of capacity occurs? Next of kin, usually partners, can give consents to medical treatment, and often investments and bank accounts only require the signature of one joint owner.
However, remember Murphy’s Law!
When someone close gets dementia or lose their legal capacity, often the lives of all involved will change. The law requires that anyone signing a legal document knows what they are doing, so an Alzheimers sufferer cannot sign a contract to sell the jointly owned home. If a sufferer has to go into a nursing home, the home will usually require a guardian appointed either by the Guardianship Tribunal or by a Guardianship Appointment.
One can take precautions in advance, and the sensible step is for us to make both an Enduring Power of Attorney and a Guardianship Appointment.
An Enduring Power of Attorney can appoint one or more people as attorneys if the donor loses their mental capacity. It enables the attorney’s to deal with the donor’s financial affairs, and can have conditions or restrictions incorporated.
A Guardianship appoints the guardian or guardians to make health and lifestyle decisions -where the donor will live, what services and treatment they receive, and allows for directions as to treatment, the most common being a direction not to be kept alive only by life support systems.
Making sure you have an appropriate Power of Attorney and guardianship Appointment in place will allow decisions about you and your assets to be made by those you have chosen, and gives them the reassurance that you have reposed your confidence in to act in your best interests.
What happens if you lose your mental capacity and do not have these precautions in place?
The Guardianship Tribunal has the power to appoint Financial Managers and Guardians. A financial manager has similar powers to your attorney, but is subject to oversight by and in some cases the concurrence of the NSW Trustee and Guardian service. The Tribunal also has the power to cancel Powers of Attorney and Guardianship Appointments if it believes they are not being used properly.
The usual problem is that when the need for an attorney or guardian becomes apparent, it is too late, the donor does not have the capacity to sign any more.
The lesson is that when you make a will, you should also make a Power of Attorney and a Guardianship Appointment. You will hope that they are never needed, but your partner and your family will thank and will appreciate your confidence if they are needed.