Q & A on 2GB discussing Wills and Estates 28 September 2016
Tuesday, 28 September 2016
CS – Chris Smith /JM – John Mann /C1,2,3, etc – Callers
CS Yes. The subject is unfair Wills today. If you would like to ask a question of our special guest John Mann, the accredited specialist in Wills and Estates and property law from Turner Freeman, 131 873. Jump in as soon as you can and recently in Victoria an elderly man had $1 million dollars stolen from his Power of Attorney. So we are going to look at what you need to be aware of with your Power of Attorney and what you can do if you are a victim of an unfair Will – and thanks to Turner Freeman Lawyers and their Legal Matters Segment, we’ve got a $100 Westfield Voucher once again to one of the callers between now and 2 – Turner Freeman Lawyers provide a range of specialised legal services including compensation and negligence law, asbestos litigation, superannuation and disability claims, family and employment law, wills and estate and property law. They’ve got offices in Queensland, South Australia, WA, Wollongong, Newcastle, Penrith and Sydney, Campbelltown, Parramatta and in the City as well. John is based at our Penrith office in Sydney’s west, but will also see clients at Gloucester and Windsor – you get around John Mann, don’t you?
JM G’day Chris. Yes I do get a bit of one spot to another.
CS Penrith and then after Gloucester the next day and around there. You don’t mind travelling by car. That’s all fine. Now just on that elderly man in Victoria that had that $1 million dollars stolen from his Power of Attorney, how did it happen and how does it happen?
JM Well anecdotally the case was settled so we don’t know precisely what the result might have been but apparently he was a man who didn’t mind betting himself and he met a lady at a casino and they became close friends and ultimately because he had no one else himself he appointed her as one of his attorneys. He appointed also another friend to act as his attorney and later on when he became disabled and ill and he could no longer look after his affairs, she started helping herself to his money. Now that was quite without the knowledge of the co-attorney and ultimately when he finally sought legal advice himself, the lady got away with over $1 million dollars of this fella’s money. And the interesting point of the case was that instead of chasing the woman herself who probably by then was not worth [bowter of the shite] they took action against the bank and the argument was because the attorneys were apparently in the document appointed jointly, they were trying to cast liability on the bank for failing to see that both attorneys attended to the management of his affairs.
CS Well my brother and I were Power of Attorney for my mother and the bank that I had to approach to get access and manage her bank accounts said, well hang on a second, you can’t do it alone – you’ve got a co-Power of Attorney, we want to see the documents before you, you know, allow you to deal with the account – you need to do that together.
JM That depends on how the documents are drawn because the document can be drawn saying I have two attorneys who must act together or I have two attorneys who can act either separately or together.
CS Right. You can set up either way, can you?
JM Yes you can.
JM And one of the difficulties with having two together is unless you make a specific provision if one of them can’t or won’t act the other one can’t either.
CS It would seem obvious to make sure there is a co-Power of Attorney and they need to act together to ensure that the right thing is done with your assets.
JM Yes. Exactly.
CS So maybe that’s one of the first things. Maybe instead of having co-Power of Attorneys who don’t act together but can act independently, you should find the other option and have them act together.
JM That’s the choice. So there’s a risk unless you make a provision in the document to say that if something happens to one of my attorneys, the other can continue on.
JM The legislation provides that if you have joint attorneys and one dies or won’t act, the other can’t act either so…..
CS So from this case, the bank was sued because the bank allowed the Power of Attorney to take the money and they settled out of Court.
JM Yes apparently so.
JM But the other thing that is illustrative of and its becoming extensively a more and more major issue is that the person that you appoint as your attorney is very much a question of trust because when you sign an Enduring Power of Attorney the explanation the lawyer will give you is that your attorney may be doing things with your property, with your assets, with your income at a time that you are no longer in control of the situation. So you are very vulnerable. And it’s not the first time I think on sessions with you we’ve had calls where people have said that somebody else cleaned out their relative under a Power of Attorney – it does happen.
CS Alright. Anne – you’ve got a question for John – go right ahead.
Caller 1 – Anne
Anne Oh hi. Thanks Chris. John, I just wanted to …….. if you have a Power of Attorney John, both these people happen to be living overseas, how will that work with someone living in Australia? If it happens that their attorneys are both living overseas?
JM Well there’s nothing technically to stop that but it is just entirely impractical. If you’ve got your affairs in NSW and you’ve got an attorney in Iceland and another one in England, that’s hard to get any assistance in the management of your affairs. It’s concertable, there’s no reason I suppose where you can’t if that’s your choice or your only options, but it just seems to me to be there’s more practical answers than that. You can indeed ……
Anne I don’t have any relatives here if that…. you know….
JM You can appoint the NSW Trustee and Guardian to manage your affairs in the same way – that’s a choice for yourself to make. But if …. provided it works then I guess there’s no particular reason why you can’t do it but as I say it seems very wide spread.
Anne Not practical you don’t think?
JM I don’t think so, no.
Anne Well John, thank you and thank you Chris.
CS Alright Anne. Thank you very much for your call. Do people leave the decision to ensure that they’ve got their assets covered with a Power of Attorney too late?
JM Quite often yes. Because when you make a Power of Attorney you must have capacity to make it. If you’ve lost capacity then you can’t do it, in which case someone then will have to approach the Guardianship Tribunal for an order for financial management and that’s then the decision of the Tribunal who they appoint.
CS Then all of a sudden as the individual in the middle of this, everything is out of your control.
JM Well that’s right. Yeah.
CS Okay. Joelle. Go right ahead.
Caller 2 – Joelle
Joelle Yeah hi Chris.
Joelle John, recently I was Power of Attorney and I went to talk to the bank about securing my parents money and they advised me that even though I was Power of Attorney, someone could bring my mother into the bank and they can take whatever they wanted out. They advised me to put all her money into my account to secure it. Is there any – is that right or is there any way you can guard it without doing that?
JM The most practical advice there is, one – don’t put it in your own account.
Joelle Oh.. No….
JM You must not mix other people’s monies with your own.
Joelle . No. No.
JM There is no reason why you couldn’t set up a separate account, perhaps you designated as Trustee for your mother that the…. you control that account but you must keep it separate from your own personal affairs.
Joelle Yeah… no. I’ve just thought it was bad advice. Basically I ended up putting it in a term deposit and leaving it at that. But it’s just get…. there’s a lot of bad advice given out to people and the Power of Attorneys – it’s hard to work out what to do.
JM I understand your situation. Yes, because you’ve got to remember though the bank has to act on the authorities that they hold so that your Power of Attorney from your mother is technically is her delegation to you – the authority from her to you but to no-one else. So if another person comes into the bank and this takes us back to the illustration this morning, earlier on sorry – that the bank has got to operate within its own ambit of the directions it’s got – so if someone else comes in who’s not necessarily on their records, then the bank could well be in a difficult spot if they paid out ………
CS I’ve got to leave you there Joelle – Thank you very much for your question. 131873 the telephone number. John Mann from Turner Freeman, unfair Wills, Power of Attorneys. Some of the topics we are discussing this afternoon. Happy to take your calls.
CS Turner Freeman and Legal Matters. I’ve still got that $100 Westfield voucher to give away. Our expert in the studio John Mann. Damien. Go ahead – John is listening.
Caller 3 – Damien
Damien How are you doing John?
JM G’day. How are you going?
Damien Good mate. Look I’m a young guy and I have left everything to my sister because I’m a nice brother ……. but I’ve also got a personal loan. So the question is does that also go across her because no-one ever talks about debts or liabilities when it comes to ……..
CS That is a very good question.
JM The basic rule is if you leave somebody an asset and has got something owing on it they get the debt as well. So if you’ve left everything to your sister, she will get the assets and she’ll also get the debts.
CS Yeah. You’re a very kind brother Damien with a certain qualification.
Damien Thanks. I just thought you know everybody talks about assets all the time but no-one ever talks about liabilities and debts.
CS Yeah. Let me pay off some of the debt. You’ve got a $100 Westfield voucher Damien.
Damien Oh. Thank you very much.
CS Well done. Stay on the line and we’ll put you through to Gabriella and get you the $100 courtesy of Turner Freeman and Westfield. Leigh. A question for John.
Caller 4 – Leigh
Leigh Oh, good afternoon John. Hi Chris
Leigh A beneficiary of a Will is to receive say $100,000.00. Can the beneficiary request $20,000.00 say go to her son, $20,000.00 to her daughter and the balance to the beneficiary?
JM Generally yes. The executor of course would want a written direction to do that and a what we might call a disclaimer or a release saying that having paid your $100,000.00 in this form that you’re not going to come back and claim the $40,000.00 that you gave to your son and your daughter. They want to be sure that there is no comeback on that but when you receive money from an Estate there’s no reason where you can’t give it away yourself.
Leigh No. But if she doesn’t want to get the $100,000.00 to her account, can she give say $20,000.00 beforehand? Like do three cheques instead of one?
JM Why would she want to do that?
Leigh Oh, she’s just generous.
JM Okay but then what’s the difference between just putting all of the money into her account and then giving to her children?
Leigh I don’t know. I just asking……..
CS Is she worried about tax or something?
JM Well she might be worried about her pension.
Leigh She could be. I’m just sort of…. I’m the executor and I’m just preparing myself in case this should happen.
JM I’ve heard about this where people are saying they don’t want to receive all the money because it might affect my pension.
Leigh Yes. Well that could be it.
JM Well the problem is though that in terms of social security, you’ve got to be honest and if you get $100,000.00 legacy, you’ve got to disclose that you’ve got it.
JM And if you’ve given part of it away, then that has a bearing on your pension.
Leigh That’s what I thought, yes. Alright. Well. Excellent.
CS Okay. Maureen has a question for you. You’ve got a very short question Maureen. What is it?
Caller 5 – Maureen
Maureen No, no. I just want to say I have Power of Attorney from my brother, sole Power of Attorney. When he made it he since then had dementia and had to go into a nursing home. It is…. it’s taken over my life the last 2 ½ years.
CS It’s a big responsibility. Isn’t it?
Maureen Huge responsibility. I …. you know – I never thought it…. I mean I realise what it was when I signed it but never thought it would come to this.
CS Alright Maureen. There’s interesting information for people who are about to become a Power of Attorney. It’s not just a simple process is it?
JM No, certainly not.
CS Okay John. Thank you very much for your time this afternoon.
JM Thanks Chris.
CS John Mann from Turner Freeman and our Turner Freeman Legal Segment again next Tuesday.