Let me start by saying this story has a happy ending. But New Year’s Eve could have had a very different outcome for my family. A few minutes before midnight there was the usual flurry of filling glasses with champagne, pumping up the music and dancing, and the excited chatter and laughter of kids and adults alike. We gathered on the deck to chant the 10 second countdown to midnight.
I heard a ‘thud’, looked over towards the stairs from where it came, saw my daughter’s panicked face, and knew something was terribly wrong. I ran over to find my beautiful sister Rebecca, face down and not moving. She had fallen 3 metres off the side of the outside staircase onto compacted dirt. I rolled her over as I couldn’t tell if she was breathing. She was unconscious, non-responsive and I thought she was dead.
An amazing team of paramedics were on the scene within 12 minutes. She was rushed to hospital, and after a week-long stay can cite a fractured cheekbone, dislocated jaw, bruising, a small bleed on her brain and severe concussion as her only injuries. She will make a full recovery and was extremely lucky.
In the weeks that have followed, as my sister has grappled with what could have been, she sent me a text asking me what would have happened from a ‘legal’ point of view if she had died or suffered the very real possibility of an acquired brain injury. (Yes, just as a plumber’s house has leaking taps, the estate planning lawyer’s family do not have wills or powers of attorney in place!).
This highlighted for me the importance of making enduring powers of attorney as part of your estate plan. The purpose of these documents is to nominate someone to step in and make financial, personal, healthcare and medical treatment decisions for you, if you are unable to make them for yourself.
Frustratingly, the name, form and witnessing requirements of the documents vary from State to State, but across the board the key considerations are:
- Who do you trust to make decisions for you? For example, appointing your spouse as the first port of call may be a no brainer, but it is always a good idea to appoint a backup person if your first decision maker is unable to act.
- What types of decisions do you wish them to make? Financial decisions include such things as paying bills, signing documents, dealing with assets, and transacting on bank accounts. Personal decisions relate more to lifestyle, the main one being where you live. Some States (like Victoria) also have a separate document appointing someone to specifically make healthcare and medical treatment decisions on your behalf. You can appoint different people to different roles.
- Do you want to place any restrictions or directions on their decision making authority? For example, you may want to specifically authorise and direct your attorney to act as trustee of your self-managed superannuation fund, or to use your funds to support your family members.
- If you are appointing multiple people, do you want them to make decisions jointly or can they make decisions separately? It might be more convenient to require only one person to make decisions, but you need to balance this against the need for accountability and collaboration in decision making.
- Do you want the power to make decisions on your behalf to commence immediately (which may be useful if you are travelling overseas or physically unwell), or only when you lose mental capacity?
If you do not have an enduring power of attorney in place and you lose mental capacity, there may be no one with legal authority to manage your affairs. This means that a tribunal or Court will need to appoint a financial administrator and guardian for you. This might not be the same person you would have appointed, and the terms of the appointment are generally more restrictive. Thankfully, we do not have to go down this path for my sister.
My son’s phone shows he called Triple Zero at 11:59PM. What a way to finish 2019, and I am looking forward to an awesome 2020!