Assistance on making decisions for later life

Most of our lives we are used to making decisions about financial, legal and health matters on our own or with people close to us, sometimes also taking advice from experts in these areas.  However, situations may arise when we cannot make such decisions ourselves – perhaps as a result of a serious accident or illness, stroke or dementia.

Some of us feel that if this happened, we would leave things up to our family to deal with and to make the necessary decisions.  Up to a point this may be fine, if we have close family living nearby able to make health decisions on our behalf, our finances are straightforward and someone (such as a spouse) is already a joint signatory to our bank account.

However, circumstances may arise in which informal arrangements are not sufficient. To be sure that our wishes about health care and financial matters are adhered to it can be wise to take certain more formal steps while we are still able to.  This may also relieve the pressure on our family of trying to decide, at a stressful and difficult time, what we would have wanted.

There are other good reasons for planning ahead.  Doing nothing or relying on informal arrangements may not be adequate if, for example, family members are at loggerheads with each other or we do not have close family or friends nearby who would be able to make sure our health wishes are followed.

Informal arrangements will also not be adequate if major financial decisions need to be made such as investing money or selling a house. In addition, many of us would like to have a say about the health care we would want to receive (or not) and to be certain that the doctors concerned will respect our wishes.

Not leaving it until too late

An important legal principle is that we can only make decisions or appoint someone to make decisions for us in the future, while we still have our mental faculties and can understand the implications of what we are signing.  Once we have lost this ability, it is too late to appoint someone else to make decisions for us.

Financial decisions

Most people are familiar with the idea of planning for the future by making a will. However, a will does not cover situations that arise while you are alive but temporarily or permanently unable to make financial decisions.

There are steps you can take to plan for that possibility.

Set up informal arrangements

One option is to give a family member or friend that you trust the authority to operate your bank account so that your bills and so on can be paid.  Your husband or wife may already be able to do this if you have a joint account.  Another common arrangement is for you to nominate a trusted person to receive your pension on your behalf and pay your bills etc.  These options will not be adequate if, for example, your finances are more complex, your house has to be sold, or someone may try to exploit you.

Sign an enduring power of attorney

Another option is to appoint someone (for example, a family member or friend) to make financial and legal decisions on your behalf, through an enduring power of attorney.  An enduring power of attorney is a legal document.

The person you appoint must follow any instructions you put in the power of attorney document, keep their money separate from yours and keep proper records.  You can change or revoke an enduring power of attorney at any time while you still have your mental faculties.

With an ordinary power of attorney the authority to make decisions on your behalf ceases if you lose the mental capacity to make decisions yourself.  Only with an enduring power of attorney does the authority continue if you lose your ability to make decisions.

The signing of an enduring power of attorney document has to be witnessed by a lawyer or barrister.  A Clerk of the Local Court can also witness an enduring power of attorney (free of charge).

It is important to think carefully and get advice before making an enduring power of attorney.  You can appoint more than one person if you prefer.

If you do nothing

In some situations it can become very awkward if you have not made any plans at all for someone else to handle your finances, should you become unable to.  For example, if no one can pay your bills or your house has to be sold.  If so, an application may have to be made to the Guardianship Tribunal to appoint someone to be your financial manager.  The Tribunal usually appoints a family member or friend.  Alternatively, the Public Trustee and Guardian may be appointed if there is no suitable person available or there is disagreement within the family.  All these steps take time and if the Public Trustee and Guardian is involved, fees will be charged.  The Guardianship Tribunal can also make a financial management order if there is evidence that your finances are not being managed wisely under informal arrangements.