I often hear people say, “Oh! I don’t like to think about that.” Unfortunately, if you do not make a will, should something happen to you, the results can be messy. An “Islander” who works with my cleaner was left with a three month old baby when his fiancé committed suicide. There was no will and probate is still not settled although his fiance’s mother will likely get her superannuation since she was nominated on it. In another case a man, married only a year, lost control of his car and left behind a heavily pregnant wife. There was no will.
A person who dies without a will is said, to be intestate, and the estate passes to the next of kin according to a statutory order. This also occurs when the deceased leaves a will that distributes only part of the estate, or where a will that has been made is ineffective. I watched in the palliative care section as relatives filled out wills for sick people which were unlikely to stand up in Court.
It used to be, if you were married, and did not leave a will your estate still passed to your wife as next of kin. Now at the very least it will be divided between your wife and your children, even if they are very young.
New intestacy laws however have introduced the concept of “multiple spouses” to increase a provision for de facto relationships. The new laws also cover same-sex partnerships; situations where the deceased may have been involved with more than one person; and cultural or religious groups that allow more than one wife. Since March 2009 the Commonwealth Family Law Act has effectively given de facto, same-sex couples and partners in affairs the same rights as married couples in terms of maintenance and division of assets. It may also include persons in a “close personal relationship,” e.g., a friend who has cared for an elderly person.
This means that the potential number of people who can bring a claim against your estate is becoming wider and wider.
It is imperative you have a will. To ensure it is legal, spend the money and have it written up by a solicitor. Wills are not set in stone. You can change them if your situation changes and even if it doesn’t review them every 5-10 years. Indicate who you wish to be guardians of your children—don’t forget to ask them if they will take on this responsibility.
How does a Power of Attorney work and do I need to arrange one?
Herald Sun, November 26th, 2016.
There are four types of power of attorney, but they all basically work in the same way, in that they allow someone to act on your behalf. A power of attorney is a legal document authorising someone to make financial, personal, legal or medical decisions for you. You are giving them the “power” to be your “attorney” which means your representative.
Everyone over the age of 18 should have a power of attorney in place because it will avoid months of legal wrangling to get access to financial assets or personal records if you are not capable, according to the Office of Public Advocate.
Medical Powers of Attorney allow your chosen person to authorise treatment if you are unconscious or too unwell to make decisions. You do not have this right just because you are their spouse or partner.
All powers of attorney must be made when you are legally capable of making the decision. This usually means before any major event or accident has taken place.
In Victoria there are four types of powers of attorney and each is used for slightly different purposes.
General Non-Enduring Power of Attorney
This is used when you want to authorise someone to act on your behalf temporarily or for a specific purpose. You can state the time period or the specific purpose in the document. Examples include someone acting for you to sell or buy property, operate your bank account for a set time frame, run your business or investments or generally act on your behalf temporarily. They are often used when someone is overseas, in hospital or just out of action.
Enduring Financial-Personal Power of Attorney
This gives someone the power to act on your behalf forever or until the power of attorney is revoked. With this document, the person has financial power as well as the ability to make personal decisions such as lifestyle issues on your behalf if you are not capable of making them.
You can limit these powers by stating under what circumstances the person can make any decisions. You can also appoint one person to make financial decisions and one person to make personal decisions, as well as having a back-up person.
If you don’t have a power of attorney in place, the court will appoint an Administrator or Public Trustee.
Enduring Medical Power of Attorney
This document appoints someone to make decisions about medical treatment on your behalf when you are not capable. The document must be in place before you become mentally or physically incapable. You can only appoint one person to this role, but you can also choose a back-up.
Your medical attorney cannot refuse medical treatment for you, except in very limited situations. In some cases your medical attorney may also still have to apply to the Victorian Civil and Administrative Tribunal for some procedures.
If you don’t have a medical power of attorney in place, there is a hierarchy of people that are first options to make these decisions. A spouse or next of kin is about fifth.
Supportive Power of Attorney
Even if you are available and have the capacity to make your own decisions you can appoint someone as a supportive attorney. Their powers are limited to “assisting” you to make your own financial, medical or personal decisions. But it includes the authority to communicate with organisations, gather information and get access to documents and records on your behalf. A supportive attorney cannot assist in real estate transactions or any financial transaction involving more than $10,000.
How to end a Power of Attorney
A power of attorney can be cancelled by signing a document to revoke it, as long as you still have the capacity to make that decision. You can also revoke a medical power of attorney by putting in place a new one, with a later date.
A power of attorney can also be challenged by anyone who believes the person appointed is not acting in your best interest. This application is made through the courts.
Wills and power of attorney often simply sit filed away for years. In Frank’s Mother’s case, the power of attorney wasn’t used for 35 years. Making a will and updating it from time to time ensures your family is protected. A power of attorney only comes into use if you are unable to act for yourself.