With longer life expectancy comes an even greater possibility that at least some of your last years will involve mental incapacity from ill health. Life changing injury, of course, can happen any time.
What happens to you and your finances if you lose mental capacity to make decisions during your life time through illness or injury?
If you don’t have documents appointing representatives to make your decisions for you if you lose mental capacity, the Court makes the decision who to appoint and you will have little to no say in who that is depending on the extent of your incapacity.
Most of us don’t want to think about these possibilities, even if we can point to examples in our own or friends’ experiences where things have gone horribly wrong.
The best time to work out what will happen to your finances and your welfare when you lose capacity is NOW.
NO APPOINTMENT OF ATTORNEY = NO SAY
Two examples I have seen where things have gone seriously wrong because there were no Enduring Power of Attorney appointment include:
ONE SIZE DOES NOT FIT ALL
Even if you have documents, they need to be well considered and the subject of solid legal advice.
Examples where I have seen legal documents go wrong include:
It is really important to prepare for incapacity and to do so properly.
WHAT DOCUMENTS DO YOU NEED?
All Commonwealth countries have the same essential framework for documenting your decisions in these matters, but every one of them has a unique approach. In New Zealand, the documents you need to have in place are called Enduring Powers of Attorney (Property) and Enduring Powers of Attorney (Health and Welfare). In some Commonwealth countries these powers are all combined in one complete document. In other countries, an Enduring Powers of Attorney (Health and Welfare) is called an Enduring Powers of Guardianship document. If you own property in more than one country you will need to have more than one set of documents.
If you are in Australia (or own property in Australia), you also have to consider every State and Territory has different rules. I know this first hand from having worked in four different Australian jurisdictions.
So, what things should you consider in preparing an EPOA (Property) or an EPOA (Health and Welfare)? Next week I will explore the subject further.
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