Noel Whittaker's Blog Estate planning is a critical issue as the population ages, but many people still don’t understand the consequences of not getting it right. Just recently a reader asked for advice about his family situation.
His mother-in-law has instructed that the family home be sold when she dies, and the proceeds split equally among the family members. Everybody is fine with that. However, when she goes for doctors or hospital appointments, they always ask her if she has a Power of Attorney to which she always replies “no I don’t want one – my family will have no trouble with my will.”
He wished to know if she needed a Power of Attorney. He also asked if she could be made to have one, given she already has a will.
Elder Lawyer Brian Herd points out that she can’t be forced to sign an Enduring Power of Attorney but she needs to understand that a Will is only relevant when she dies, not when she is still alive. Along with that she needs to understand that if, while she is alive, she should lose her capacity to make her own decisions, it is absolutely crucial to have an Enduring Power of Attorney in place.
If she doesn’t have one and she loses her capacity, it doesn’t matter how simple her affairs are, decisions will still need to be made for her about her finances and even a move into aged care. Without an Enduring Power of Attorney in place, it will leave her family with a big problem because there will be no one who can make financial decisions.
I suggested the family sit down with her and have a good talk about the importance of having one, and also an Advance Health Directive which would then enable her to make decisions in advance about what care she wanted if she lost capacity and was terminal. She needs to appreciate that she may not think these documents are important but they are very important for her family if they have to make decisions for her. From what they tell me she appears to be an independent and strong-willed woman, and she may well see the benefit of this.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. noel@noelwhittaker.com.au