Wills & Medical incapacity
NO ONE of US likes to THINK ABOUT IT, but our lives can change in an instant.
It is a good idea to consider what would happen in the event that you were in a serious accident so your family knows your wishes in advance and is spared from having to make the wrenching decisions involved. Think about what you would want if you ended up on life support. Under what circumstances would you want your life support to be turned off? Would you want to stay alive if it meant breathing with a ventilator? Would you want to donate your organs if you were brain dead?
It is important to select the person you want to make those decisions for you if you were unable to make them for yourself. Would you prefer your partner, your parents, or another relative? If you are not in a de facto relationship and do not have a Power of Attorney or Enduring Guardian, then your next of kin would be your closest relative. It may not be the person you would want (or knows you best to know what you would want) to make that important decision.
In 2006, the Australian Human Rights Commission conducted a National Inquiry into discrimination against people in same-sex relationships regarding access to financial and work-related entitlements and benefits. The Same-Sex: Same Entitlements Inquiry heard from a woman who told a story about a lesbian friend being denied the right to farewell her dying partner:
“One of our lesbian friends lay ill and dying in her hospital bed. When it came time for her to die the hospital staff prevented her partner from entering her hospital room and sitting with her at the end of her life because she was not the “spouse”. Our friend died alone. Her partner sat outside in the corridor, prevented from being with her. She continues to suffer great distress that her life-time partner died without her comfort and without knowing she was there with her”.[i]
There have been many stories of lesbian couples who had no legal relationship prior to an accident and the estranged parents stepping in, sometimes preventing the surviving partner from having any part of the decision-making, not being listed on the death certificate as their partner or spouse, and even losing custody of children. Therefore, taking care to consult a lawyer and prepare those documents in advance is critical.
The Guardianship Act 1987 (NSW) provides the basis for which your next of kin is to give consent to your medical treatment if you are unable to make those decisions yourself. This person is referred to as the “person responsible” and the courts determine that person by looking for, in the following order:
Your appointed guardian (if you have one);
Your spouse or de facto partner;
Someone who “has care of” you; or
A close friend or relative.
Lesbians in a “close, continuing relationship” qualify as de facto partners for the purposes of the Guardianship Act 1987.[ii] However, a lot of medical and nursing staff are unaware of these changes to the law recognising same-sex couples, so if this happens to you, be sure to contact a lawyer, the hospital legal counsel, or administrator.
If you don’t live with your partner, then you may not be considered to be in a “close, continuing relationship”, and you should think about appointing your partner as your Power of Attorney and/or Enduring Guardian. If your relationship is registered, then you would automatically be recognised as a de facto partner under the Guardianship Act 1987 and have a higher priority than a friend of other relative.
If you have children, then the “person responsible” is the person who has parental responsibility for the child, which is usually one or both of the legal parents.
If there is a dispute over who should be the guardian and you live in NSW, then you can make an application to the Guardianship Division of the NSW Administrative and Civil Tribunal (NCAT) for the appointment of a financial manager or guardian to make medical decisions on behalf of an incapacitated person. Each state generally has a similar body dedicated to these types of disputes.
Power of Attorney
A Power of Attorney is a legal document that gives your chosen person (referred to as your Attorney) the legal authority to make decisions in respect to your financial matters. If you are going overseas on a long trip, then it may be a good idea to consider appointing a Power of Attorney to look after your affairs whilst you are away or during a time when you are unable to do so. If you do not have anyone you can appoint as your Attorney, then the NSW Trustee & Guardian can act as your Attorney. They will appoint an independent asset manager to manage your financial affairs.
You can appoint two people as joint Attorneys if you don’t want one person to make all the decisions on their own. You should also nominate a substitute Attorney in the event that your preferred Attorney is unable or unwilling to act.
You can decide on how much power the Attorney has and on what matters they can make decisions. If you want your Attorney to have the power to make decisions with respect to property, then your Power of Attorney will need to be registered with the Land & Property Information (in NSW).
If you want your Power of Attorney to continue to operate after you lose capacity, then you should consider doing an Enduring Power of Attorney.
Regardless of the scope of your Power of Attorney, it is a good idea to think carefully about your decision since this role is a very substantial one. Somebody may be very well-intentioned but not have adequate skills in financial and real estate matters. You may want to discuss this with the person you’re thinking of choosing before going through the process.
We all know people who have lost their capacity to act because of illness, accident, or advancing age. As traumatic as this is for the person, it is also extremely difficult on the loved ones who are involved intimately in the person’s life. To make things easier, it is a good idea to have an Enduring Guardian and also let that person know what your wishes are in case you lose capacity.
An Enduring Guardian is a document that names a person to make decisions with regards to your health and lifestyle if you lose the capacity to do so. The Enduring Guardian cannot make any decisions relating to your money or assets.
The kinds of decisions an Enduring Guardian makes include:
Where you will live;
What health care/treatment you will receive; and
Whether or not to give consent for medical/dental procedures.
When deciding whom to appoint as your Power of Attorney and Enduring Guardian, you should consider who would best understand your wishes and values and also who has the necessary skills to make the right decisions for you. People may automatically think this should be a family member, but most importantly it should be someone who knows you well and knows your wishes.
A will is a legal document that sets out your wishes for the distribution of your property and possessions (referred to as your “estate” in your will) after your death. It is important to have your will drafted by a lawyer to ensure it is legally valid and accurately reflects your wishes. If you have family or children who are dependent on you, it is particularly important that you have a will to ensure they are provided for upon your death.
All adults should have a will. But it is particularly important to have a valid will once you enter a de facto relationship, become pregnant, and have children. The cost of having a will drafted will depend upon its complexity. These may range from $200 up to $10,000. You should have a lawyer draft your will, rather than using a “do it yourself” kit. It is important you understand the terms of your will and that they are drafted according to your wishes.
For a will to be valid, generally it needs to be in writing, signed, and with your signature witnessed by two others who also are required to sign your will.[iii]
When you have your will drafted, you will need to appoint an Executor and Trustee who will handle your affairs upon your death. It is common for the same person to perform both of these roles; however, you can appoint different people as Executor and Trustee and name as many Executors or Joint Executors as you like.
The Executor of your estate will apply for probate, pay any outstanding debts you have, and distribute your assets in accordance with your will. Some people appoint their solicitor as their Executor or their spouse, a close family member, or a friend. Most importantly, make sure you have someone you trust as your Executor, as they have to make decisions about your estate and your wishes.
The Trustee generally administers any trusts set up in your will. A testamentary trust can be set up in your will which can be a tax-effective way to direct assets or income from your estate into a trust for your children.
A testamentary trust is common in a will if you have children under eighteen years of age and they are unable to manage their own financial affairs. Again, you should ensure that your Trustee is somebody completely reliable, as they will manage your children’s money until the children reach the age specified in the trust (usually 18 or 21 years).
You may consider adding a clause in your will that defines your relationship with your partner as evidence of your intention to be considered a couple and your partner as a dependent. This may make it more difficult for a family member to challenge your will as you have clearly set out your relationship and intentions. There have been many sad situations made tragic in the lesbian community because the woman who died did not have a will or did not include such a clause referring to her relationship. In these situations, family members, including parents or siblings, may inherit the deceased’s home and property. This may be avoided by carefully constructing your will with a solicitor.
In your will, you can appoint a guardian of your children, known as a “Testamentary Guardian”. This is particularly beneficial to lesbians in the event of a birth mother’s death, where the mother’s partner may not be the legal parent, where there may be a known donor (biological father) involved in the child’s life, or where extended family relationships are strained. The Family Court can still make orders for a child to live with someone else even if you have named a Testamentary Guardian, but with just a bit of advanced preparation, you may save your children and your partner the heartache of a custody battle in the event of your death while they are minors.
Another thing to consider at the same time as drafting your will is your superannuation benefits, as these are not considered part of your estate. You can request that your superannuation fund pay your partner or your children directly rather than being paid into your estate and this may be more tax effective. You should seek advice from a solicitor or accountant specific to your situation.
When you request your superannuation fund pay your estate, or direct to a person you nominate, this is known as a binding nomination which the trustee of your superannuation fund is bound to follow. Ensure your binding nomination is up to date. If you have nominated your partner as the beneficiary under a binding nomination, and then you separate and die, your partner may still receive your superannuation if you haven’t changed the binding nomination. Some binding nominations are only valid for three years, so it is important to find out how long your nomination is valid for and be sure to update it.
You can nominate any of your dependents in a binding nomination. A dependent is your partner, your children (depending on their age), or anyone dependent on you at the time of your death. You can also nominate your estate to receive your superannuation.
If you haven’t made a binding nomination, then the trustee of your superannuation fund will decide where your money should be distributed. This means that your money may go to people that you don’t necessarily want it to.
If your children inherit these monies, the superannuation benefits can be used to pay for their education and living expenses, and you can specify who has control of these monies in your will (your trustee).
Generally, before your estate is distributed, a court will need to grant probate to the Executor of your estate.
You should always consider making a new will if you marry, divorce, separate from your de facto partner, or have children.
I would recommend you consult a solicitor to have your will drafted according to your family structure and seek tax advice to ensure the will is drafted in the most tax-effective way for your beneficiaries.
Click on the link below to do your Will today.
If you die without a will
If you die and do not have a will, the legal system considers this dying “intestate”.
This is not ideal for many reasons, particularly if you have children. It is much better for the people left behind if you have a will so all of your property can go where you intend it to go and your children and/or partner are taken care of without having to be subject to lengthy court battles with high legal fees and lots of stress.
If you do not have a will when you die, problems may arise when your estate is being administered. Your assets may not go to the people you would like them to, in the shares you wanted.
If you die without a will, your estate may be divided according to a government formula.[iv] This may not reflect your wishes and may mean significant costs and delays for your family or partner and children. It may also mean your assets may not go to your partner if they can’t prove that you were in a relationship at the time of death. It may also cause difficulties for your children if you are not their legal parent, if you have children from different relationships or if you have separated from your de facto partner and have a new partner.
It is an investment of time, energy and money to create a will, but it’s an investment that I highly recommend for all concerned considering the problems that may ensue if you do not.
How your estate is administered if you have a will
If you die leaving a valid will, then the beneficiaries of your estate are those who you nominate in your will. This means if you nominate your partner and/or your children to receive your estate or specific property or gifts, then they should receive what they are entitled to under your will.
Whilst you can leave your assets to whomever you want, you do have an obligation to adequately provide for your de facto partner, your children, and any other dependents. An obligation to adequately provide is not a legal obligation under any legislation. However, the Supreme Court has found in several cases that parties can have a “moral duty” to adequately provide for family members.
If you don’t adequately provide for your family members, then they may be eligible to make a claim on your estate, which is known as a family provision claim.
Family provision claims
A family provision claim is when a person makes an application to the Supreme Court because they say they were not adequately provided for in another’s will or because there was no will. They can apply for a share of the estate under the “family provision” rules under the Succession Act 2006 (NSW).
A surviving spouse, de facto partner, or child has an automatic right to apply to the court for provision, and the Supreme Court will assess the merits of each application and the needs of the applicant and any other beneficiaries of the estate. You need not be a legal child of the deceased (i.e. listed on the birth certificate) to bring a claim. A partner or child who may be ineligible according to the automatic right may still bring a claim if they can show that they were dependent upon the deceased and were a member of their household.
For more information on wills, Power of Attorneys, and Enduring Guardians, go to the Public Trustee’s website - www.tag.nsw.gov.au or consult a solicitor.
Summary of Main Points:
Lesbians in a “close, continuing relationship” qualify as a de facto partner for the purposes of the Guardianship Act 1987.
An Enduring Guardian is a document that names a person to make decisions with regards to your health and lifestyle if you lose the capacity to do so.
It is a good idea to have a Power of Attorney, a legal document that gives your chosen person (referred to as your Attorney) the legal authority to make decisions in respect to your financial matters.
It is also important to have a will so your estate (your property, money, and other assets) are distributed to the people you want according to your wishes. Problems may ensue if you die “intestate” (without a will). Your will appoints an Executor and a Trustee for purposes of distributing your estate when you die.
A family provision claim is when a person makes an application to the Supreme Court because they say they were not adequately provided for in someone’s will.
[i] Australian Human Rights Commission (October 2007), viewed 4 October 2016, https://www.humanrights.gov.au/publications/stories-discrimination#endnote2
[ii] s 33A Guardianship Act 1987 (NSW)
[iii] s 6 Succession Act 2006 (NSW)
[iv] Ch 4 of the Succession Act 2006 (NSW)
Note to readers: This information is intended as a guide to the law and should not be used as a substitute for legal advice. While every effort has been made to ensure that the information contained here is as up to date and accurate as possible, the law is complex and constantly changing (particularly relating to same-sex parenting) and readers are advised to seek legal advice in relation to their situation.
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