The importance of power of attorney
AFTER the death of her husband several years ago, Mary's solicitor explained to her the importance of executing a power of attorney.
The "enduring” power of attorney would have appointed her only child, Denise, to manage her financial affairs if she lost the capacity to do so herself.
Mary was concerned about the cost involved and decided she would think about putting a power of attorney in place "down the track”.
Two years ago, Mary was diagnosed as suffering from dementia.
She was no longer able to manage her financial affairs and Denise consulted the solicitor, who advised that unfortunately, Mary had lost the capacity to execute a power of attorney and Denise would need to apply to the Guardianship Division of NCAT for an order appointing her as Mary's financial manager.
After a hearing, the tribunal discussed the proposed order with Mary.
The process was stressful for all concerned.
The tribunal ultimately approved Denise's application and she was appointed as Mary's financial manager.
Unfortunately, as a consequence, Denise must now submit annual reports to the New South Wales Trustee and Guardian, detailing Mary's affairs and the transactions that Denise performs on Mary's behalf.
At Christmas time last year, Denise made a number of relatively modest monetary gifts to Mary's brother and sister and her four grandchildren. Despite Mary having ample funds to make such gifts, the New South Wales Trustee and Guardian objected and imposed a limit on the gifts.
Earlier this year Denise was informed that she must now obtain a surety bond, being a kind of insurance, in case she mismanages Mary's affairs. This is now compulsory for all financial managers and in Denise's case, amounts to a payment of $800 annually.
If Mary had made a power of attorney in favour of Denise when she had capacity to do so, her affairs could have been dealt with privately, without the intervention of the New South Wales Trustee and Guardian and without annual audits and ongoing fees.