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As you get older, so do your parents. You are probably used to the idea that they are the ones that will always care for you or look after you, but as they get older, the chances of them becoming incapacitated or
dying unfortunately increase, and you or another family member may be called upon to look after them, or to see that their affairs are in order.
The situations where you need to have legal documentation in place are:
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where a parent becomes physically incapacitated (for instance, they become too weak to look after their affairs such as going to pay the bills, etc, or they can no longer read or sign things properly because of poor eyesight);
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where a parent becomes mentally incapacitated
(for instance, they have Alzheimer's disease, or dementia)
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they pass away,
You need to have legal documentation in place to deal with these situations BEFORE they arise. In most cases, sorting out a parents affairs after they become either incapacitated or if they should die becomes more complicated and much more expensive.
What happens if I don’t do anything?
If a parent becomes mentally or physically incapacitated, and they do not have an Enduring Power of Attorney in place that selects a trusted family member or friend, then the law does not automatically give this right to the next of kin. Whilst the next of kin may have a right in relation to life and death matters (eg. Should the life support be taken off, etc), this right does not automatically extend to other personal and financial issues (such as who is allowed to pay the bills, which nursing home to put the parent into, should their house be sold, etc). In the absence of an Enduring Power of Attorney, these decisions will be passed to the Qld Government Public Trustee.
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EXAMPLE
A parent made a Will over 20 years ago, that gave a larger distribution in the event of death to the youngest child, because at that time, were the parents to die, that child would have needed more money because they were still a minor (whilst the other children were already adults). But now, all the children are adults and on an even footing. If the Will is not changes, that youngest ‘child’ will unfairly get a larger proportion than the others. The Will is a prime target to be contested by the aggrieved other children, which can be a very expensive matter.
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They will probably consult family members as to what to do, but ultimately they will make the decisions. They will also charge for their time in looking after these affairs.
If a parent was to die, then most States have laws in place (usually called rules of Intestacy) that will dictate how their assets are to be distributed. Just the administrative process alone is made so much more difficult, expensive and time consuming (as you need to have a Court order in place of the Will), and the rules that the State specify may not reflect your parents wishes. Family squabbles are also likely to occur, because distribution of assets and the parents wishes were not documented before their death.
If a parent does have a Will but it is hopelessly out of date, it can create an even greater nightmare, because the door is left open to their estate being contested by aggrieved parties, or worse, some loved ones are short changed.
What do your parent (s) need?
They need:
Tips on what to do
If both parents are still alive and in reasonably good health, then they may wish to select
each other in the first instance as Executors and as the primary beneficiary. They will then need to look at providing for their children, even if those children are already grown up and looking after themselves. Cutting a child out in a Will can be a dangerous thing to do, as it leaves the door open for that child (even though an adult) to contest the Will. There are ways to minimize these risks. For more information on this, see our True Story
Cutting out a
Relative.
For the Enduring Power of Attorney, it is a good idea for each parent to select
each other, provided that they are in good health, but also to select a close family member such as a trusted and responsible child (who must be an adult) to act in the event of incapacity. In this way, the decisions for the parents well being are kept within the family, rather than being given to an outside entity such as the Public Trustee. When selecting this person (called the ‘donee’), the parent should look for the following attributes:
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someone that they trust (they may love all of their children, but not necessarily trust each one!)
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someone who is responsible and has financial nouse
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someone who is in touch with the parents wishes
In addition, the donee must comply with certain legal requirements, such as being over 18 years of age, of sound mind, not be an undischarged bankrupt, etc.
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