A husband and wife from Orange, NSW were driving down the freeway to Sydney and slowed for a 40 km per hour road repair zone. The husband, who was driving, suddenly lost consciousness, but fortunately the wife managed to pull the vehicle over to the side of the road. A week later they returned, passing that same spot with the husband as a passenger and a newly fitted pacemaker in his heart. Fortunately, their lives returned to normal.
The near accident posed the question: “What would have happened if one of us had been permanently incapacitated or had not survived? Did we have everything in order?”
These questions prompted the couple to look more closely at how and what they should prepare to ensure their wishes were well documented, providing the easiest way for them to be carried out and the best outcome for those left behind. They formulated a checklist and created a folder of completed documents, including their Wills, Powers of Attorney, Advance Care Plans, CVs (for anyone researching for a eulogy) and insurance policies.
But it is not just the prospect of death that should spur us on to be prepared.
In an aging population, where people are living longer and the number of people living with dementia is expected to double over the next 35 years, there are plenty of other good reasons to plan ahead.
Estate planning is the process of getting your affairs in order while you are alive and well and able to make sound decisions. Planning will ensure that your wishes are fulfilled.
It might start with the appointment of a trusted person or persons to manage your financial and personal affairs, should you become incapacitated.
There should also be a trusted person chosen to carry out your final wishes according to your Will after you die. An executor can be a family member, friend, lawyer or the Public Trustee.
A good estate plan should take into account both your personal and financial goals. For example, some families may need a trust to manage and distribute assets to children. All assets and liabilities of any value should be considered when developing an estate plan, including real estate, business and farm interests, investments, retirement plans, life insurance proceeds, personal property, art or other collections, cash and personal effects.
Your estate plan may involve the restructuring of assets and the identification of potential beneficiaries.
An estate plan would generally include a Will, Power of Attorney or Guardian and details around life insurance, superannuation or death benefit nominations.
Powers of Attorney
Your Power of Attorney is given to a person of your own choosing to look after your financial affairs if you are unable to do so personally. This may be due to an extended absence overseas, a period of illness, or some other temporary incapacity.
An Enduring Power of Attorney differs from a standard Power of Attorney in that it continues to operate should you suffer from loss of decision-making capacity. This could be due to advanced dementia, stroke, accident or illness. It allows you to choose in advance who you would trust to protect your wealth if you are no longer able to manage your affairs. It might be a relative, trusted friend or a solicitor.
A Power of Attorney ceases upon your death, at which point the executors of your estate take control of your affairs according to the instructions in your Will.
A Power of Attorney may or may not have the power to make decisions about where you live or what sort of medical treatment you should receive if you are unable to speak for yourself.
This responsibility may fall to a separately appointed Guardian.
A person must have sufficient legal capacity to nominate an Enduring Power of Attorney. If a person has lost decision-making capacity without appointing an Enduring Power of Attorney – due to dementia or any other cognitive of physical impairment – it is too late for them to do so.
It is then left to a family member or relative or a trusted professional such as a solicitor or doctor to apply to the appropriate State or Territory Civil and Administrative Tribunal to appoint an administrator (for financial decisions) or guardian (for personal and health decisions). If there is no one suitable or available to be appointed, the Public Trustee and Guardian (or equivalent) may be appointed. They will charge for their services.
Advance Care Plan
An Enduring Power of Attorney or Guardian with responsibility for your health matters will rely heavily on any instructions you have given in relation to your future care, in keeping with your beliefs, values and goals.
An advance care directive, or living will, is the formal document that makes known your wishes as to what medical treatment or measures you want to have if you become incapacitated and unable to make or communicate the decision yourself.
It’s an important part of your end-of-life care, which would generally be held by a doctor, hospital or aged care facility if relevant.
As part of the directive, you can elect to have certain treatments if you have a life-threatening injury or illness. Equally, you can list the treatments you do not want to have, like CPR or being fed by tubes.
A valid directive is generally one that has been reviewed and signed by you, if you can make your own decisions; or your Enduring Power of Attorney or Guardian and a medical professional. It is a binding document and must be followed by health professionals and family members.
Advance care planning will give you the comfort of knowing that your wishes will be carried out should anything happen to you in future. This benefits not only you, but also your family members, who otherwise may face the burden of making choices for you without your input.
Just remember to tell the family and executors where you keep the folder of precious documents.