Urban myth: our next of kin can make financial decisions for us if we lose capacity. [Click to Tweet]
Hello, I’m Brian Herd, a member of the Elder Law team at CRH Law. Welcome to some brief but crucial information on a document that all adults should have called the ‘Enduring Power of Attorney’.
When my daughter turned 18, one of the gifts I arranged for her was her own ‘Enduring Power of Attorney’ because you have to be 18 years old to do one. She came in to our office and I had one of our Solicitors prepare it for her and then we tied it up in fancy ribbon. Like many 18 year olds, she thought this was a bit odd to say the least. And she told me, “The trouble with you dad is you’re thinking more like a Lawyer than a father.” It took her a long time to pluck up the courage to tell her friends what her dad had given her for her birthday.
But, sometimes I’m happy to think like a Lawyer father. Too often in my years of legal practice have I seen disastrous consequences for people and their families in not doing this essential document. The ‘Enduring Power of Attorney’ is a legal document in which you can appoint people to make decisions for you if you ever lose the ability to do so yourself. This can be caused by any adverse life events such as a medical condition, an accident, and it can strike at any age.
The trouble is many of us believe in an urban myth, which pedals the story that our next of kin can make financial decisions for us, if we lose capacity. That’s simply wrong. If we haven’t made an ‘Enduring Power of Attorney’, and we lose the capacity to make of our financial decisions, then no one is entitled to make those decisions for us. Not our spouse, our parents, our children, our good neighbour, or even our best friend.
Doing nothing about confronting this issue means that if the event does arise, someone such as your spouse or your children will have to apply to a tribunal to be appointed to make decisions for you. Is this really what you want to put your family through?
This is exactly what an 83-year-old widow recently did all be it unintentionally. She believed in the urban myth that the next of kin and thought her four children could make financial decisions for her if she lost the capacity to do so. When she had a stroke and lost her capacity to make decisions, the legal reality for the children set in. The trouble was, they couldn’t agree who should apply to the tribunal to be appointed. So, they all applied individually and in competition with each other.
The result was an all-around disaster in that the family business kind of a grinding halt waiting for the wheels of the tribunal to turn to appoint someone. Because of conflict between the children, the tribunal ultimately refused to appoint any of them and instead appointed a benevolent bureaucrat, the public trustee. The legal cost were some $130,000 and none of the children now speak to each other.
So, a belief in a myth and a failure to get good legal advice on the part of mum and to do an ‘Enduring Power of Attorney’ resulted in the implosion of her family. The law can be your friend in this area of life. It gives us the means and the tools to avoid these family catastrophes.
One of these family life-saving tools is the ‘Enduring Power of Attorney’. We are good at doing ‘Enduring Powers of Attorney’ not just any enduring power, but a good one, that reflects your circumstances and your aspirations.
We urge to confront the future and do one now rather than wait for the fickle finger of fate to confront your future.
[This is Brian Herd from CRH Law talking to about the importance of doing ‘Enduring Power of Attorney’.]