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Wills & Estates

Enduring Power of Attorney

Who Should I Nominate As My Enduring Power of Attorney?

By | Wills & Estates
Appointing an enduring power of attorney should become an important part of any advanced care plan, particularly as you get older.

An enduring power of attorney is a legal document which authorises another person or persons to act on your behalf in managing your affairs, which can become particularly relevant as you age and potentially lose the capacity to make your own decisions as the result of a health issue such as, a stroke or Alzheimer’s disease.

There are two types of power of attorney, namely ‘general’ or ‘enduring’. The former is often used for convenience when you’re overseas, or on a long holiday or suffer from poor health and need someone to make decisions in your absence and lapses as soon as you lose capacity. An enduring power of attorney, in contrast, continues after you lose capacity. This is why it’s an important decision as to who you appoint in this role and that you make the appointment whilst you are still in good health and able to make clear-headed decisions about your future.

What can an enduring power of attorney do?

Your enduring power of attorney can make important decisions on your behalf about personal and health matters, as well as about your financial affairs, should you lose capacity.

Personal/health matters might cover decisions about where and with whom you live, whether to consent, refuse or withdraw consent to particular types of health care (such as an operation you might need), and even daily issues such as what you eat  and how you dress.

Financial matters might relate to income and investment decisions, managing your transaction accounts, buying and selling property, shares and other assets.

Who can be appointed as an enduring power of attorney?

An appointed attorney must be over the age of 18 years, must not be your health care provider (i.e. your doctor), must not be bankrupt, and must not be a paid carer (this does not include someone like a family member receiving a carer’s pension).

In general people will appoint a close family member (such as a spouse or child), a long-term friend or professional advisor (such as an accountant or lawyer) as their attorney.

Many specialists in this field will suggest appointing more than one enduring attorney to ensure accountability for decisions and as a check and balance to ensure your wishes are carried out. It’s also advisable to appoint someone who is already familiar with your affairs, is trustworthy and – given the power covers financial affairs – has some idea about managing money.

It’s important that the person you appoint approaches their role with the philosophy of ‘supported’ decision-making – that is, making decisions as if you would have made them yourself – rather than substituting in their own views about things when making decisions on your behalf. This is best achieved by detailed discussion on your wishes with your proposed attorney/s before you appoint them.

The contemporary prevalence of blended families and remarriage can sometimes raise difficulties in appointing close family members as your enduring power of attorney, particularly when it comes to children from an earlier marriage, in which case an independent but closely connected, highly trusted person might be a better option as your attorney.

How does the attorney’s power work?

In regard to personal and health matters, the power of your attorney to make decisions on your behalf does not begin until the time you have 1) become incapable of understanding the nature of, and 2) foreseeing the effects of a decision, and 3) being able to communicate that decision.

With financial matters, you can nominate when your attorney’s power begins. If you lose the capacity to make such decisions before the nominated date, the attorney’s power begins then.

What are the implications of not appointing an enduring power of attorney?

Should you become incapacitated without nominating a power of attorney, your affairs may end up being handled by the government, for a fee.

The Queensland Civil and Administration Tribunal (QCAT) will appoint an administrator on your behalf to authorise necessary transactions or when your family members can’t agree on decisions related to your welfare. All in all, this process means any wishes you had while you still had capacity may not be upheld.

What is the process of appointing an attorney?

As mentioned, making an enduring power of attorney is often done as part of an advanced care plan, including the making of a will.

While you can do these things yourself or through the Public Trustee, provided all documents are correctly witnessed and signed, for convenience and peace of mind it’s highly advisable to consult a lawyer with specialist experience in this field for guidance on the best way to proceed. They will help you complete, witness and submit the necessary enduring power of attorney documents and provide more detail on some of the issues raised above as to who is best to appoint and what they’re able to do on your behalf.

Power of Attorney

What Happens When There is No Enduring Power of Attorney in Place?

By | Wills & Estates
Appointing someone you trust with power of attorney is likely one of those things many of us dismiss as unimportant, or more likely put off as something we can always do another day.

But the consequences of not making someone you trust as your power of attorney can have costly and complicated consequences for your family should you become incapacitated and unable to express your wishes or make decisions for yourself.

What is involved in appointing a power of attorney?

Power of attorney generally falls into two categories –

  1. a general power of attorney and
  2. an enduring power of attorney.

A general Power of Attorney is usually used for short-term purposes – someone you trust is given the power to make financial and legal decisions for you if you’re away overseas, or temporarily incapacitated by illness. The power lapses immediately should you die or choose to revoke it.

An enduring power of attorney, by contrast, continues if you become unable to make your own decisions, for example as the result of a stroke or the onset of Alzheimer’s disease. By nominating someone as your enduring power of attorney while you’re still healthy and coherent, you can protect your interests and direct your affairs for a time when you may no longer be able to.

In Queensland, someone with an enduring power of attorney can make – should you empower them to – decisions on your behalf both on

  1. financial matters and
  2. personal/health matters.

This could include everything from buying or selling real estate, selling shares or other assets, operating your bank accounts, deciding where you live, how you’re fed, and what types of health care you receive.

An enduring power of attorney must be someone over 18 and someone you trust, such as a close family member, long-time friend or trusted adviser. There are certain other restrictions as well, such as the person not being bankrupt or your health care provider.

The consequences of no enduring power of attorney

As is clear from the above, these are very important life decisions to be made by someone else should you no longer have the capacity to make them for yourself.

There are, therefore, some problematic consequences should you become incapacitated with no legally appointed enduring power of attorney. Most commonly, it will fall to the government to handle your affairs because you no longer can… and they will charge a fee.

Queensland Civil & Administrative Tribunal

In the absence of an enduring power of attorney, ideally a family member will step forward to try and help order your affairs. But they will need to apply to the Queensland Civil and Administration Tribunal (QCAT) to be appointed as your:

  1. administrator (to make financial decisions) and/or
  2. your guardian (to make personal decisions).

This process can be protracted and frustrating and made even more complicated if there is disagreement and dispute among your family members about who should rightfully take these roles. It can take three months or more for QCAT to make these decisions and related fees can run into the thousands of dollars.

The Public Trustee

If there is no-one to take on the role of your administrator and/or guardian, the Public Trustee will step in as Administrator to manage your affairs or the Office of the Public Guardian (OPG) will step in to make personal decisions for you. The Public Trustee may charge between $5,000 to $15,000 per year for this service.

For family members or close friends who wish to nominate as either your administrator or guardian, there are a number of conditions to be met which are not dissimilar to those for an enduring power of attorney. More importantly, there are extensive forms and a detailed affidavit required by QCAT in order to make a determination on your administrator or guardian.

These can be complex and time-consuming matters and so consulting a legal professional with wide experience in estate planning is highly advisable. If you have questions about appointing an enduring power of attorney, the consequences if you do not, or about the process for becoming an incapacitated relative’s administrator or guardian, contact us now.

What is a Will

What is a Will and Why Do You Need One?

By | Wills & Estates
A will is one of the most important and practical legal documents you will create in your lifetime. By making a will, you ensure a number of things will happen once you pass on – specifically, that your property and assets will be distributed after your death in the way that you want them to be, and also to provide certainty and clarity for your loved ones in terms of their inheritance from you.

When should you make a will?

When you’re young it’s easy to put off the idea of making a will. You don’t have dependents, you don’t have many assets and you may not yet have a partner. But as you get older you will likely gain some or all of these things and it becomes essential to detail what should happen to the things you leave behind in the event of your death. In truth, it’s advisable for anyone over the age of 18 to consider making a will, particularly once they start working. This area is commonly referred to as ‘estate planning’.

Once you’ve made a will, it’s recommended you review it every five years to ensure it accurately reflects your current circumstances.

What are the consequences of not making a will?

Should you die without having made a valid will, you are said to have died ‘intestate’ and your estate will then be subject to the laws of intestacy such as Queensland’s Succession Act 1981. This can mean your estate is not distributed as you had intended – even your sentimental belongings may not go to the loved ones who you wished to inherit them.

The lack of a will can lead to a messy and potentially costly situation for your family if they then wish to seek to assert their rights in relation to your estate.

Things to consider in making a will

As the maker of a will you are known as the ‘testator’. You must also appoint an ‘executor’, a person or persons who will be responsible for managing and distributing your estate when you die, and therefore someone in whom you have implicit trust. This is because the executor/s role is an important one which can be both time consuming and complex, given they possess unique powers to deal with your estate.

In assessing the ‘estate’ you detail in your will, it’s important to remember that it is the sum of your assets minus your liabilities. Assets might include real estate holdings, cars, shares, super, life insurance and any money owed to you, while liabilities might include things such as outstanding tax debts, mortgage debts, household and medical bills.

It’s not always clear, at the time of your death, what will constitute either an asset or a liability and this is where a legal professional with experience in estate planning can assist at the time you make a will.

The importance of advice

While there are many DIY kits available which aim to defray the costs of making a will, people who use such means should be aware that legislation relating to wills in each state contains specific provisions governing the process.

In making their own wills, people often make fundamental mistakes such as:

  1. Not detailing the full name and relationship to a person mentioned in the Will, i.e. a father and son might have the same name, or a person might inherit a surname after marriage;
  2. signatures in different coloured inks which indicate testator and witnesses were not present together at the signing;
  3. making later amendments to the will after it has been signed, which can render it invalid; and
  4. even storing the will incorrectly, so that it’s obvious paperclips or staples have been removed to add or remove pages.

Even these basic examples indicate the importance of consulting an estate planning expert when it comes time to either make or update a will. Contact us today to discuss creating this important life document.

Testamentary Trust

What is a Testamentary Trust and Why Should I Consider One?

By | Wills & Estates

An unavoidable fact of life is that, someday, we all die. While many avoid thinking about this particular reality, it doesn’t change the fact of the matter and by putting off issues around death entirely, many place themselves or their loved ones in a position of risk when the time finally does come. One way to protect yourself, your estate, and your family is to tackle these issues head on and engage in various types of estate planning. By going beyond just executing a will, you will be able to provide yourself and your family peace of mind when the inevitable does finally come to pass. For additional benefits, consider a testamentary trust.

A Trust Is: First, it might be helpful to know what a trust is. A trust is a legal arrangement between three parties. The first party (the trustor) transfers property (assets) to a second party (the trustee), who holds these assets for the benefit of the third party (the beneficiary).

A Testamentary Trust is: A testamentary trust is a trust that is created through a will and only comes into effect after the death of the person who created the will (the testator). In short, when the testator dies, the assets will go into the trust rather than be distributed through the will. The reason that these assets are not considered to be part of the estate as defined by the will is that the trustees are not beneficiaries of the estate and do not control asset distribution.

Benefits to a Testamentary Trust

Tax implications: Trustees of a testamentary trust will have the discretion to distribute and divide the capital gains of the trust however they choose in order to minimize the tax implications on the beneficiaries. On the other hand, if a beneficiary inherits directly, they will be forced to pay taxes on that income based on their personal marginal tax rate.

Asset protection: Due to the fact that the trust assets are not considered part of the deceased’s estate, these assets will be protected from the claims of third parties, such as creditors or ex-spouses. Similarly, if a beneficiary is involved in a property settlement, the assets will not be accessible as they technically belong to the Testamentary Trust and not to the beneficiary themselves.

Types of Testamentary Trusts: There are two common types of testamentary trusts.

Discretionary Testamentary Trusts: This is when the executor grants the beneficiary themselves the option to place all or part of their inheritance into a testamentary trust. In this scenario, the named primary beneficiary has the ability to appoint or remove a trustee as they see fit and are even allowed to manage their inheritance within the confines of the trust. This is more common with competent adult children or spouses.

Protective Testamentary Trusts: This occurs when the executor does not allow the beneficiary to choose and the beneficiary is forced to take their inheritance via testamentary trust. Additionally, the beneficiary will not have the power to appoint or remove trustees. This is more common when the beneficiary needs guidance due to age, responsibility, or disability.

Including a testamentary trust as a part of your estate plan may be a good idea for a lot of reasons, many of which have been outlined here. However, if you or someone you love has any questions about planning ahead for the financial wellbeing of their estate, contact an experienced lawyer today and receive personalised guidance.

Power of Attorney

What is a Power of Attorney and Why Might You Need One?

By | Wills & Estates

Though we may not like to think about it, accidents happen every day. Some accidents or unplanned events may leave you or the ones you love unable to speak for yourselves. In fact, the only certainty in life is getting older, which also carries the possibility of losing the capacity to make your own decisions regarding health care, finances, and more. On a more positive note, you may want to spend some time travelling overseas where you are not reachable to conduct your own business. No matter the circumstances, you are faced with the very real possibility that, at some time in your life, you may be unable speak for yourself. If this happens, you should prepare through the legal document known as Power of Attorney.

What is a Power of Attorney?

A Power of Attorney operates during your lifetime to direct your affairs and can either be ‘General’ or ‘Enduring’.

General: A general power of attorney is usually used for temporary absences. For instance, if you were to go on a vacation and want to grant someone the power to sign documents in your absence, you could give them a general power of attorney and their power to act on your behalf would end when you returned. A general power of attorney will also come to an end if you were to lose capacity for some reason.

Enduring: On the other hand, an enduring power of attorney will enable your appointed  agent to be able to continue to act on your behalf in the event that you lose capacity. They will be the ones to make decisions about your care and conduct your affairs if you develop a cognitive medical condition like Alzheimer’s, or are in a coma. In the absence of an enduring power of attorney, the government will appoint someone to make decisions on your behalf, and sometimes this will draw a fee.

What decisions can be made under the Power of Attorney?

You may grant the power to make decisions regarding your personal matters, health matters, or financial matters.

Personal & health matters: These two go hand-in-hand because while who you live with may seem personal, your healthcare needs will likely play a large role in who will be the best choice for you to live with. Same goes for whether you are able to work, attend school, receive training, obtain a driver’s licence, and the mundane issues of day-to-day life (clothing, food, etc.). These powers will also include decisions about what care to pursue, accept, or refuse (like surgery or medication).

Financial matters: These powers will include distribution of income, investments, purchases, sales and real estate transactions, as well as the management of assets, bank accounts, and using the money for your care.

Definition of capacity

A Power of Attorney will protect your interests if you lack the capacity to make your own decisions any more but in order to grant the power at the outset, you need to be an adult who is capable of making your own decisions. In order to have ‘capacity’, you must be able to understand the nature of your decisions and their effect, free and able to make said decisions, and be able to communicate your decisions. If you are unable to meet these criteria, it will be determined that you lack capacity.

For over 30 years, Twohill Lawyers have been providing comprehensive legal help to the people of the Gold Coast community. If you require further information or legal assistance, please contact us today for a 15-minute, no obligation advice over the phone on 07 5571 1450 or email admin@twohilllawyers.com.au.

Property Settlement

Four (4) Important Things to Consider When Negotiating Your Property Settlement

By | Wills & Estates
Whether we like it or not, there are times in life when we have to choose our battles. In other words, we have to decide whether it is worth arguing over the issue at hand. This decision is often a factor when separated or divorced couples try to reach agreements regarding the division of property.

The bottom line if you’re currently trying to reach a mutually acceptable property settlement is that you and your former partner must be willing to negotiate. This is not the time for either one of you to be stubborn or make unreasonable demands. Beyond that, here are four (4) important things to consider when negotiating your property settlement.

  1. Honesty is the best policy when identifying assets and liabilities

Australian family law mandates full and timely disclosure of all relevant financial information – including the assets and liabilities for inclusion in a property pool. Aside from the fact that the court doesn’t appreciate it when parties don’t comply, accidental or deliberate deception can have unpleasant consequences. Firstly, it may lead to heightened suspicion, scrutiny and tension between you and your former spouse, which makes a settlement less likely at mediation. Secondly, if you have not disclosed your entire property portfolio, it will open the case up at a later date for review.

If need be, don’t be afraid to consult qualified legal and financial professionals who can help you identify and value everything that should be included in the property pool.

  1. Compassion and consideration are important

It is understandable if you harbor resentment or anger towards your former partner or spouse – especially if violence or infidelity led to your separation. However, if it is at all possible, it is important to consider his or her immediate needs. This is because he or she may have legitimate concerns about making ends meet or finding a place to live in the short term. Agreeing to terms that address these needs will undeniably benefit you both in the long run.

  1. Be realistic when assessing your needs

It is also important to think things through when assessing your own needs in the context of a property settlement. Do you really need a greater portion of the total property than your former partner or spouse? Or are you just trying to get it out of malice, or spite? Then again, is splitting everything equally actually ‘fair’? Are you thinking about your immediate and long-term needs?

These are all valid questions because the reality is – assets rarely hold their value. Some will be worth more in the short term, less in the long run and vice versa. This means a successful property settlement isn’t necessarily one in which you ‘get’ more than your former spouse, but rather one in which you get the assets most compatible with your current and future financial needs.

Within this context, it may be helpful to start with an honest evaluation of your current situation, and your immediate and long-term goals. Again, it is perfectly okay to consult with a financial planner, accountant or similar financial professional if you don’t feel comfortable doing this on your own.

  1. Don’t let your emotions dictate the outcome

Even if you and your ex are still on relatively good terms, tempers may flare during property settlement negotiations. This may be due to lingering, unspoken resentment or something else altogether. In any case, heated emotions can and do kill negotiations. If that happens, you may be forced to turn to the courts – which can be extremely expensive and unpleasant.

Although it can be incredibly difficult, it’s essential that you try to keep your own emotions in check, and handle the property settlement negotiations the same way you’d handle any other significant business transaction. By putting your own feelings on the back burner, you can concentrate on maintaining a civil dialogue, pick up on any cues that the negotiations may be in jeopardy and act accordingly. Your lawyer should handle the situation without the emotion.

Finally, it’s important to remember that you know your former partner or spouse better than any outsider does. This means you shouldn’t feel compelled to begin or continue negotiations if you know the other person isn’t amenable to moving forward at the time. Doing so can easily backfire and, in a worst-case scenario, end the chance of having any constructive discussions at all.

Clearly, how you approach your property settlement will depend on the specific circumstances of your case, and these are just a few general pointers. For more information about reaching a property settlement, please feel free to send us an enquiry or contact us today.