How can I remain in financial and legal control?

Planning on how your estate will be distributed once you die is important, but you should also make arrangements to cover a situation which may arise if you can no longer manage your own financial and legal affairs.

Loss of mental capacity or physical mobility, whether through accident or as a by-product of the ageing process, is a real risk faced by all. Ask yourself these questions (while you still can):
    1.    If I can’t manage my legal and financial affairs for any reason, who will?
    2.    Will they manage my affairs the way I’d want them managed?
    3.    What happens if I make no arrangements?
    4.    What can I do to ensure my affairs are managed by someone who is competent and someone I can trust?
Let’s start with the good news. You can easily address these questions. Execute an Enduring Power of Attorney appointing one or more trusted people to manage your affairs on your behalf. This simple document enables you to appoint someone to lawfully act on your behalf if you are unable or don’t wish to make decisions.
Not only do you select who looks after your affairs, you can direct the person you appoint on how you wish the power to be exercised. You might appoint one or more of your spouse, a close friend, children or your trusted professional adviser as your attorney. You can appoint backups if your first choice can’t act for some reason.
Although easy to implement, caution should be exercised in your choice of attorney as these documents can be used by unscrupulous friends and family members to take financial advantage of elderly people.
So what happens if you do not have an Enduring Power of Attorney in place? If you lose the capacity to manage your affairs, your family or health-care provider will have to apply to a tribunal or court to appoint a guardian. This costs money, can result in delay in decisions or critical actions being taken and of course, you have no say in who is appointed or what they do with you or your hard-earned wealth once outside your control.
A Power of Attorney and an Enduring Power of Attorney are essentially the same document except the enduring version continues to operate once you lose your mental capacity. An ordinary Power of Attorney ceases to operate once you lose mental capacity.
In a future article we’ll review Enduring Powers of Guardianship, a document you can use to appoint someone to make decisions on your behalf about health, lifestyle and welfare issues when you can no longer do so. We’ll also review advanced health care directives or ‘living wills’ as they are commonly called.
To find out more about appointing a Power or Enduring Power of Attorney, call Slater & Gordon on 1800 555 777.