In This Issue
Much better to call it now!
More often than not, it takes a personal jolt to do what we know we need to do – or, perhaps, to do what we think we don’t need to do.
Having recently turned 60, I’d started thinking of 80 as not so old. For me life is good, I’m manning the controls and never felt better… until I experienced first-hand, the sudden and unexpected onset of dementia in a potential client.
Unfortunately, my would-be client had not taken the simple and logical step of arranging Powers of Attorney for himself and his wife, as he felt he was completely in charge of his faculties.
Without the mental capacity to understand the benefits of the strategy we had developed (which included the repayment of debt and winding up his Self-Managed Superannuation Fund) it was no longer possible to implement the changes which would have achieved significant savings, and relieved him of the burden of running of his SMSF.
Without the prior appointment of an attorney to make financial decisions on his behalf, the next steps will be complex and time consuming.
Until Powers of Attorney are able to be put in place, my potential client’s estate will continue to lose more than $10,000 per year and leave a significant mess for whoever must eventually, tidy it up.
In the meantime, his two sons are currently applying to the Guardianship Board for Powers of Attorney to be granted to them so that they may make financial decisions on behalf of their elderly parents. In time, hopefully, we will be able to implement the strategies we had proposed to simplify their financial situation.
This reality has me urging, with renewed conviction:
If you are over age 60, take steps now to arrange or review your financial Power(s) of Attorney.
Being in this category myself, I have certainly taken my own advice.
The following information is included to consider in making your review:
- In cases where a person is without decision making capability, different laws and procedures apply in each state and territory. In South Australia, an Enduring Power of Guardianship will allow the appointment of a guardian to make medical, healthcare, accommodation and lifestyle decisions. Unlike an Enduring Power of Attorney, however, this power does not extend to financial decisions, which requires the appointment of the Public Trustee.
- There is a lack of uniformity amongst states and territories around Powers of Attorney; it is important to get advice about each individual situation.
- In terms of your Enduring Powers of Attorney, you should think carefully about who should hold that power. As with an estate executor, the appointment of a son or daughter who has cared for the parent or gone ‘above and beyond’ is often favoured, but they may not always be the best equipped, particularly if they have a vested financial interest in your estate.
- Whilst many couples appoint their spouse/life partner as their attorney, you should consider a second, or substitute attorney as a precaution in the event that both parties, due to illness or premature death, are unable to act for each other.
- An Advance Care Directive directs who can decide further treatment or life preserving interventions on your behalf – or legally withhold it. Write down your wishes, preferences and instructions for future health care, end of life, living arrangements and personal matters and/or appoint one or more substitute decision-makers to make these decisions on your behalf when you are unable to do so yourself.
- In matters financial and medical, appointing attorneys and substitute decision makers can have the potential to be divisive within a family – with the pain of having to make decisions about ending or preserving a life being very difficult for some to bear.
As I always advocate, build around you that team of experts (lawyer, accountant and financial planner) to provide support to you, your loved ones and your estate when your inevitable decline occurs.
Your professional team will also help you recognise who is the best placed attorney for you, be that a lawyer, a sibling, a son, daughter or a friend.
Arrange to call that meeting now.
And one more thing…
Clients who have been with me for decades often say that they no longer need to worry too much about financial market movements, legislative changes or federal budgets. They are aware that their portfolios are invested in line with their long-term investment risk profiles, with sufficient cash holdings to meet their income needs and we will contact them if anything needs to change.
For those who are interested in what the government had to say this week, there were no great surprises (at least none that had not already been leaked!) Here is a summary of the highlights from the 2023 Budget compiled by highly respected economist, Dr Shane Oliver.
Please click here to see my latest contribution to the national retirement savings debate.
As always, if I or any of the staff can be of assistance, please don’t hesitate to contact us on (08) 8130 5130 or via firstname.lastname@example.org
Theo Marinis B.A., B.Ec., CPA., FPA®