Estate planning explained

Share this story

In the legal game we use the term “Estate planning” to describe putting in place a succession plan to decide what happens to your assets, business interests and other financial interests after you die (usually via a Will or Testamentary Trust) as well as planning for unexpected events during your life with tools like Powers of Attorney and Enduring Guardianships.

We have been getting lots of enquiries lately about not only Powers of Attorney and Enduring Guardianships, but also what you can do if you have concerns about a person’s ability to manage their financial or personal affairs if they have lost capacity and do not have these documents in place.

First, a brief explanation of the documents is necessary.

A Power of Attorney is a document under which you can appoint a person or people to stand in your shoes and do anything you could do in relation to your finances and money, either at your direction or if you lose capacity in your place. This includes things like operating bank accounts, signing contracts, buying or selling real estate and other financial and business transactions.

An Enduring Guardianship is similar to a Power of Attorney, but instead of business and financial affairs, it relates to your health and lifestyle. Your Guardian steps in when and if you lose the capacity to look after yourself to make decisions like where you live and what medical and dental treatment you receive.

People do not always have the opportunity to put these things in place before they lose capacity, so what can you do if this happens to someone you know?

If you know someone who is suffering an incapacity and cannot manage their financial/business or health and lifestyle affairs, and they do not have a Power of Attorney or Enduring Guardianship in place, you can make an application to the Guardianship Division of the New South Wales Civil & Administrative Tribunal for them to have a financial manager and/or guardian appointed.

The Tribunal will consider your application and usually conduct a hearing where people close to the person concerned will be required to give statements about why they might need a Financial Manager or Guardian and things like medical evidence can be put before the Tribunal.

The Tribunal will usually appoint someone close to the person concerned like their spouse or next of kin, or if not, they might appoint the New South Wales Trustee & Guardian to step in to manage the incapacitated person’s affairs.

The process is similar if an incapacitated person has a Power of Attorney and Enduring Guardianship in place and you are concerned that the Attorney or Guardian is not acting in the best interests of the incapacitated person.

The Guardianship Division of NCAT can review such appointments and revoke, vary or confirm them.

The Supreme Court of New South Wales also has jurisdiction to consider such matters, however this is a much more complex and expensive alternative to NCAT.

Share this story