By Tony Densley

Here is a question worth sitting with for a moment.

If you could not manage your own money for a period, who is legally allowed to step in and do it for you?

Most people answer immediately. My wife. My son. My daughter. And most people are wrong, or at least not as covered as they believe.

Being someone's spouse does not automatically give you authority over their finances. Neither does being their child, or living with them, or being the one who has always handled the bills.

This week is Dementia Action Week, which makes it a sensible moment to raise it. Though I want to be clear that capacity can change for all sorts of reasons. A stroke. A serious accident. A long illness with a good recovery at the end of it. This is not only about dementia, and it is not only about the very old.

WHAT NEEDS TO EXIST, AND WHO PREPARES IT

The main instrument is an enduring power of attorney. It lets you appoint someone you trust to make financial decisions for you if you are not able to make them yourself.

The word enduring is the important part. An ordinary power of attorney stops working at the exact moment you would most need it.

There are related documents covering health and personal decisions, and the names and rules differ from state to state, Queensland included.

Let me be straightforward about my lane here. I do not prepare these documents. A solicitor does. I work with the money behind them, I make sure the two line up. After more than 30 years, I can tell you the thing that fails is almost never the legal document itself.

WHERE IT COMES APART IN PRACTICE

• Nobody can find it. It was done properly in 2009 and it is in a drawer somewhere, and the family is ringing solicitors in the middle of a crisis.

• The appointed person does not know. Or knows, and has no idea what is involved. Or lives four hours away and cannot sit at a bank counter on a Tuesday.

• The structures do not match the document. Accounts, super, an account-based pension, a trust, an investment held in one name for good reasons twenty years ago. An attorney can only work with the way things are actually set up.

• Centrelink is its own world. It has separate nominee arrangements, and holding a power of attorney does not automatically let someone deal with Centrelink on your behalf. That surprises almost everybody.

• Nobody knows what you would have wanted. The paperwork says who may decide. It rarely says what you would have chosen. So a person who loves you is left guessing, usually while exhausted, sometimes while disagreeing with a sibling.
  

THE GOOD NEWS, AND IT IS GENUINELY GOOD

Every one of those is fixable, and none of it is difficult to do beforehand.

It’s an afternoon of work, some of it with a solicitor, some of it with an adviser, and then you don’t have to think of it again until the day it's needed.

The families I have watched handle a hard season well were not the wealthiest. They were the ones where somebody had thought about it in advance, told the relevant people, and written down not just who decides, but roughly what they would have wanted.

The paperwork is the easy part. Doing it before you need it is the whole trick.

If you are not certain what is in place, that uncertainty is worth resolving. It is usually a much smaller job than people fear.



FREQUENTLY ASKED QUESTIONS

I am married. Doesn't my spouse automatically have authority?
No. Marriage does not give one person legal authority over the other's finances. Banks, super funds and Centrelink each have their own requirements, and being the spouse is not one of them.

What is the difference between a power of attorney and an enduring power of attorney?
An ordinary power of attorney ends if you lose the capacity to make decisions. An enduring one continues, which is precisely the situation you are planning for. The word enduring is doing all the work.

Does a power of attorney cover Centrelink?
Often not on its own. Centrelink runs its own nominee arrangements, which are separate and need to be set up specifically. It is one of the most common gaps I see.

Do I need a solicitor, or can I use a form?
Legal documents are prepared by a qualified legal practitioner, and that is the right way to do it. My role is different. I make sure the way your money is actually structured lines up with what the document assumes, which is where most of the real problems appear.

If you are not sure what is in place, or whether it still matches how your money is actually set up, that is worth an hour. Your first discovery meeting is free from obligation. Book your free discovery call: Book your free discovery call.

https://welcome.faceupliving.com/booking-call

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