Don’t wait until you have Dementia to sort out who should be managing your assets.
The phone rings and you pick it up. It’s your father, and he tells you the same cat story for the 10th time this week. In fact, you’re not even sure if the cat story happened this week, or last month, or last year or… Your father is displaying signs of memory loss and dementia.
You realise that he has never appointed anyone as his attorney and his memory is deteriorating. Perhaps it is time to help your father out with the management his financial affairs.
Can a person appoint an attorney when he is showing signs of dementia?
If a person can still understand the effect of the power of attorney, he can sign a power of attorney to appoint someone to act as his attorney. If there is any doubt as to capacity, it is prudent to obtain a doctor’s report that the person had capacity at the same time the power of attorney is executed.
If a person is unable to understand the effect of the power of attorney, there are two options:
- one can still ‘appoint’ the attorney, however, any exercise of the power will need to be confirmed by the Supreme Court of NSW in accordance with the Act. This could result in a lengthy and costly process; or
- one can apply to the NSW Civil and Administrative Tribunal (‘NCAT’) to appoint a financial manager. A financial manager has much the same functions as an attorney and has the authority to make decisions about financial affairs such as operate bank accounts, pay bills, invest money and sell or buy property.
Who can be a Financial Manager?
In an application for financial management, NCAT may decide to appoint a private financial manager (family member or friend) or the NSW Trustee and Guardian.
On the application form, one can suggest a person (eg, a family member) to be a financial manager. NCAT will consider the suggestion but is not bound by it.
If there is no-one suitable or willing to take on the role, NCAT can appoint the NSW Trustee and Guardian as the financial manager.
The moral of the story
Whilst you or your aging parents are well and of sound mind, make sure you sign an enduring power of attorney!
This is a simple and cost effective method to ensure that important financial and property matters can be attended to by a trusted person when one loses the mental capacity to do so.
If you need any assistance or advice with your power of attorney, we are here to help.
Post by Janie Ng and Anne Sandeman