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Home | Q & A on 2GB discussing Wills & Estate Law 10/10/13

Q and A on 2GB in relation to Powers of Attorney

Thursday, 10 October 2013

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CS       Yes thank you to Turner Freeman, our sponsors, Turner Freeman Lawyers. We have an expert in their field in here each and every Thursday and I tell you what, these segments have been extremely popular and, in particular, when we talk about Power of Attorney, wills and estates law and that particular area of the law and that’s where we’re heading to today. As a matter of fact, there are some new aspects of power of attorney forms that need to be discussed with Paul Sant who is our man today. Paul, thank you very much for coming in.

PS       Thank you Chris.

CS       How hot is it out there? How does it feel?

PS       Mate, it is getting hotter and hotter.

CS       Yeah, I bet it is. Alright, Paul Sant can take your calls on 131873. Now there are some new powers of attorney regulations or forms that came into force last month, September 2013.

PS       Correct.

CS       Describe those to us.

PS       Brand new changes to the forms of powers of attorney. There is a transition period from now until 1st March 2014. After 1st March 2014, if you make a new power of attorney and it doesn’t comply with the new forms, it’s not valid.

CS       Not valid.  Right.

PS       But, importantly to remember, previous power of attorneys signed prior to 1 March 2014 will still take effect.

CS       Ok, so none of it’s retrospective. So those with powers of attorney in force now and have been stamped by the court are valid and will remain valid but lawyers have to get their acts together and get their new forms in leading up to the 1st of March next year.

PS       Just a correction there Chris, you don’t have to have powers of attorney stamped.  If you do a power of attorney and you want to sell real estate or buy real estate, they have to be registered at the Land & Property Information Department of NSW Registry otherwise they can just sit there and they can be used without being registered for operation of bank accounts and things like that similar.

CS       What’s the intent of changes to the forms?  What’s this about?

PS       They’ve tidied the forms up and they’ve now corrected a few of the problems that have been persisting but some problems still remain.They have now provided for a provision for substitute attorneys so you now, you can say well I appoint Joe Blogs as my attorney and as a substitute, Mary Blogs, so that if Joe Blogs dies or becomes incapable of acting then Mary Blogs can step in. There’s been a problem in appointing joint attorneys. Many of us appoint two people to act.  Let’s say we’ve got five children and we appoint two children to act and they both have to act together. The rules were that if one of those two died or was incapable of acting that whole power of attorney was useless. Now, they’ve made it specific that you tick a box that even if something happens to one of them, the other one can still operate or your substitute can kick in.  So they’ve fixed up that problem. There are more details as to when powers of attorney commence. The date they are accepted by the person who’s being appointed or when certain things happen and also the document now clearly states the responsibilities of the attorney so that the attorney who is appointed knows very well what their obligations are to the person who appoints them.

CS       Right, ok. So they’ve cleaned all of that up and once again, just repeating, the 1st March 2014 any power of attorney entered into has to be with the new forms.

PS       Correct.  After that date. Correct.

CS       Alright 131873 is the telephone number. We will take your telephone calls right after the first break and a few people on the Board already talking about wills and also powers of attorney which is good and Turner Freeman Lawyers are our sponsors in the legal matters segment.

131873 our legal matters segment on deck at the moment thanks to our sponsors Turner Freeman Lawyers, Paul Sant in the studio. We’re on the subject of powers of attorney today and wills and estates.  Let’s start with Stephen. Question for Paul. Go ahead Steve.

C1       Hello Paul.

PS       Yeah Stephen.

C1       Yeah, how you doing? I’m just calling on behalf of my mother. She has joint power of attorney with her brother and that was put in writing my grandfather and all that sort of stuff before he died so he passed away in 2007 and recently we found out that my mum’s brother has been taking money from the account and my grandmother has recently been diagnosed with dementia so we’re just wondering what sort of legal foot she has to stand on.

PS       Ok, firstly, when the person who makes a power of attorney. Powers of attorney are only valid while that person is alive. Once he dies, that power of attorney is useless, it’s revoked.  The work kicks in so if he’s been using the power of attorney to operate bank accounts, there are all sorts of implications. Now you say that mum has dementia?

C1       Yeah, she’s been diagnosed with dementia, yeah.

PS       Ok, has she got a power of attorney in place? Has she appointed someone as her attorney?

C1       I think they’ve got dual power of attorney so I think that’s what kicked in after he died so they put it in for her as well so that they’d be able to look after her.

PS       Who is her attorney?

C1       Who is her attorney?

PS       Yeah.  I mean it’s not the brother I take it?

C1       No, it’s joint so it’s my mother and her brother.

PS       Yeah, but you said that that joint power of attorney was made for the grandfather I think.

C1       Yeah, there was one for him and when he died, before he died, they had another one written for her so that they could look after her as well when she passed.

PS       Well whoever her attorney is has got authority to pursue those unauthorised withdrawals but if the money…it depends on how…if the money’s being taken out of the grandfather’s estate and the grandfather has passed away, relying on a power of attorney, there are problems…serious problems there, because a power of attorney ceases on death.

CS       But isn’t that almost a fraud case.  Where do you go to report something like that? To the police don’t you?

PS       If it’s fraud, yes. And it probably does smell of fraud, I agree with you. First thing you need to do is contact the bank. Let them know. I mean once they’re aware that someone has passed away, they usually put a freeze on the account and no one can operate the account and banks know that powers of attorney don’t operate after death.

CS       So you need to put a freeze on the money Stephen. Inform the bank.

C1       We have informed the bank and it is coming out of her account but what we’re not sure of, is because she has dementia, she doesn’t really have capacity.

PS       Steve, we’re getting a bit confused mate. I thought this money was coming out of grandad’s account?

C1       No, no, it’s coming out of her…it’s coming out of their estate. So, after he died, everything went to her.  So, it’s coming out of her estate.

CS       Well it’s her money.

PS       So, it’s her money and she’s appointed someone has her attorney and that attorney is operating on her account?

C1       Yes.

PS       Well as long as that money is used for her benefit and he can account for it that’s fine.

C1       See that’s the problem, it’s not and she doesn’t really have capacity so she actually has no idea.  Money can be taken and then next minute she’s forgotten it was ever there.

PS       In that case, what you can do is make an application to the Guardianship Tribunal for a Financial Management Order. They will revoke the power of attorney. They’ll appoint someone to manage her affairs and then that person can ensure that the money is used for her benefit.

CS       That is the best advice, thank you for that Paul. Thank you for that Steve, that question.  21 to 2 o’clock. Mary, you’ve got a question about a will.

C2       Yes, I made a Public Trustee Will about 30 years ago and I’m wanting to make a new Will and make my son and daughter.

PS       Not a problem.

C2       What do I do with that Will at the Public Trustee?

PS       You advise them that you’ve made another Will.  Usually, certainly in our Practice, when someone comes to see us to make a Will, I enquire whether they have made previous Wills and then I obtain an authority and bring those Wills back to us and then we can destroy them in accordance with the client’s instructions. I’m a firm believer of not having more than one Will lying around.

C2       Right.

PS       There have been instances where, and I’m aware of one case in particular, where there was a first Will and, in fact, it involved the Public Trustee. They got probate, started to deal with the assets and, in fact, there was a subsequent Will found which had a whole different provision contained.

CS       But the answer if Mary goes to a lawyer to get this new Will done, they will take care of that Will superseding the previous Will.

PS       Well, a new Will automatically revokes the old Will.

CS       Right.

PS       The problem is, someone doesn’t know about the new Will and they get hold of the old Will, they could just go on their merry way as if that was the last Will. There’s the difficulty. That’s why I don’t like having two Wills lying around. I tend to destroy the old ones.

CS       How’s that Mary?

C2       I don’t have to go to the Public Trustee then?

PS       No, not at all.

C2       Would there be a charge for service?

PS       No.  But, either you can contact our office. You know, we’re quite happy to help or whoever, whatever legal representative you see. If you tell them, they will arrange to uplift the old Will from the Public Trustee.

C2       Thank you very much.

CS       Alright Mary, thank you very much. Much appreciated. George, you’ve got a question.

C3       Yeah, yeah, talking about Wills, I’m rather concerned. When a person dies and the Will is challenged, who pays legal fees to do the challenging?

PS       If you’re talking about a Family Provision Act claim, in other words, someone claims that they should have been provided for and haven’t been provided for. More often than not, the costs for both sides will come out of the Estate. There are provisions where if a party brings a claim and loses then a Costs Order can be made in favour of the Estate but I have to admit, generally, it has to be a case without any basis whatsoever to get that type of Costs Order.

C3       Oh I see, yeah, I am worried about the Family Provision Act and I don’t understand why the people who challenge the Wills don’t pay the legal fees.

CS       That’s a good question you know. If you want to appeal something and create a new legal case, you’ve got to take responsibility for the cost to everyone shouldn’t you?

PS       But you’re not creating a precedent or anything like that. You’re exercising your rights.  There’s an act that says, anyone that should be provided for, anyone that’s entitled to be provided for, should be provided for. On the face of it, someone, such as a child, has not been provided for.  They have a right to make a claim. Look, I don’t agree with the provisions but that’s the way it is.

CS       Alright.  Lynn, hi, good afternoon.

C4       Oh good afternoon. I’m just asking, do many people actually end up getting prosecuted for abusing their power of attorney?

PS       I can’t answer that question to be honest with you.

C4       I know of a case it’s happening but I’ve not ever actually heard of anybody although I’ve known of many times when people have actually abused their power of attorney.

PS       You often hear of it.  People will tell you about it.

C4       But as far as getting to a point where there is a prosecution and somebody is being fined.

PS       There may not be criminal prosecutions but there are cases and, in fact, there’s a number of cases where proceedings have been commenced to recover the money from the attorney on behalf of the donor or the person who’s made the power of attorney.

C4       Right.

PS       There are a number of cases along those lines.

C4       And they succeed?

PS       Yeah, they do. They do.

C4       Oh good ok, well that’s good.

PS       You’ve got to give good evidence and, you know, if the person can say, oh well I used it for his benefit because I paid his bill or I did this. I suppose, well, that they are tend to be believed but if it’s obvious that the money came out of the account and the guy went and bought himself a car then there might be a different story.

CS       Alright Lynn, thanks so much for your question. Thank you Paul for that answer. We’ll get back to more questions and more callers in just a second in our legal matters segment, brought to you by Turner Freeman Lawyers, our sponsors. Compensation can’t change the past but it will make a difference to your future so if you’re suffering because of someone else’s negligence turn to Turner Freeman Lawyers. Turner Freeman Lawyers are heavy hitters, the type of law firm you need on your side to win and they’ve been winning claims for a long time. When a Turner Freeman lawyer acts for you, they draw on over 500 years of combined experience, the financial and legal resources of a national firm and a reputation as tough, uncompromising litigators who won’t rest until you get the compensation you deserve. So call the number 1800 800 088 or visit the website turnerfreeman.com.au. Turner Freeman Lawyers when you need to win your case.

12 to 2 is the time, Paul Sant here to take your calls but not for a very long time so get in as quickly as you possibly can, he won’t be here forever.  Maureen, you’ve got a question about a Will, go ahead.

C5       Yes, hello, our Will is that our…we’ve had a son and daughter. Our son is executor of our Will. Our daughter passed away 3 months ago and our son was Trustee for our daughter and that’s stated in the Will because she was a disability person.

PS       Right, yeah, yeah.

C5       Now, should we change our Will or would that be not relevant now?

PS       Well, the trust provision is irrelevant if she’s passed away. That just doesn’t apply.

C5       Yes.

PS       But you’ll need to have a look at the Will and ensure that it provides for, in the event that something happened to your daughter, that there is some provision. That there’s a catch or a clause which says that if my daughter doesn’t survive me then this will happen.

C5       I see.

PS       And usually Wills do provide what they call a residuary clause that says everything I have left goes XYZ.

C5       Yes, well, we just split it down the middle, half and half but now, of course, as I said, our daughter passed away three months ago.

PS       Yeah, it needs to be checked because if you have half and half, I don’t…you’ve got to check that you’ve got something in place that will deal with the half that would have gone for your daughter.

C5       I understand. Ok, thank you very much.

CS       Good on you. Thank you Maureen. Plenty of calls coming through now, Lenn, hi.

C6       Oh, hi.  I’m an 84 year old legally blind pensioner. I have my son and daughter appointed as joint executors and my son is of the opinion that I can sign things but it’s only from memory, I can’t read what I’m signing so I ask him to sign for it and he says, oh no, I can’t sign for it while you still can. Now, is he right?

PS       Does your son have a power of attorney?

C6       Yes.

PS       You’ve appointed him as your attorney?

C6       Yes.

PS       And the power of attorney operates straight away? There’s no precondition? Such as, it only operates if I lose soundness of mind?

C6       No, no, no.

PS       The son can sign for you.

C6       That’s what I thought.

PS       That’s the whole point of a power of attorney.

C6       Yeah, that’s what I thought too.

CS       Alright Lenn, thank you very much for that shorty. We got that through. Bruce, powers of attorney.

C7       Yes, I just wish to speak to Paul about my brother up in Queensland.

CS       He’s listening.

PS       Yes Bruce.

C7       He has given a relative a power of attorney and my brother is now in hospital.  He’s not likely to come out and the power of attorney is effective and the relative has given up his normal job to look after the property and he’s a bit reluctant to draw himself a wage. I said, well you know, you’re quite entitled to draw a wage because you’ve given up your normal job and you are looking after the property. Would that be so?

PS       Not quite. Firstly, if you’re talking about Queensland, it’s a different Act so I can’t speak for what their provisions are. This new provision and the legislation regarding powers of attorney are State specific. To a large extent, they are the same. Now, firstly, one of the central issues is, and it’s now clearly written in the new forms that a person who is appointed an attorney. You have an election. You either can allow them to draw money for their benefit or you disallow them. Now the rule was that unless you said otherwise, they couldn’t use money for their own benefit or draw money for their benefit.  Now, drawing a wage I would think would be for their benefit. If they were paying Council rates, water rates, land tax, whatever it happens to be for the person that’s fine. I think there would be problems unless the document clearly allowed that person to draw benefits for himself. The new forms actually have a ticker box where you say ‘yay’ or ‘nay’.

C7       So he better get a bit more advice.

PS       You better check it, yeah.

C7       Ok, thank you very much.

CS       Good on you Bruce, much appreciated.

131873, Peter, go ahead.

C8       Yes, I am facing a problem. My parents and my intellectually disabled sister lived in the US. Now, my father has passed away, my mother has dementia. It is the intention that Judy comes back to Australia, there are legal powers of attorney in place in America. How do we get one for here when she comes home?

PS       She’s…tell me again about your sister? She’s intellectually challenged?

C8       Disabled.  Yeah, yeah.

PS       Disabled. So she hasn’t got capacity to make a power of attorney, because obviously she wouldn’t understand the…

C8       She does, but she doesn’t…what she can look after herself in most respects but she doesn’t understand the value of one thing against another so there’s the problem.

PS       If she does not have capacity to make a new power of attorney then the only alternative would be to make an application to the Guardianship Tribunal to get what they call a Financial Management Order in, let’s say, your favour and that’s just completing documentation and making an application to the Tribunal. That’s the only alternative.

C8       It wouldn’t be able to be…

PS       Some powers of attorneys can be registered and be valid here but, look, to be honest with you, I don’t know about the American ones. I know we have arrangements as between States for example but in some states we would have to register the power of attorney in that State. Let’s say we make a power of attorney in New South Wales, we have to register it in Queensland before they can use it. As far as the American powers of attorney, I do not know the answer but if you’d like to contact me, either send me an email, I’ll make some more enquiries for you.

C8       Thank you.

CS       Ok, Peter, stay right there. Don’t move. Don’t go. Ah, he’s put the phone down. No, we’ve got him, have we? Peter, we’ll put you through to Bridgette and we’ll give you all of those indications. Just go through what we started at the very beginning. I’ve got 15 seconds to make sure those who didn’t hear it half an hour ago get it right. There are new forms for powers of attorney in the State of New South Wales and they have to be.

PS       Correct.  They must be used if you make a power of attorney after 1st March 2014.

CS       Next year.  1st March next year.

PS       But they can be used now. You can actually start using the new forms now.

CS       Ok, Paul, thank you very much for answering all the questions this afternoon.

PS       Thank you, Chris.

CS       Paul Sant from Turner Freeman Lawyers, our sponsors of our legal matters segment for another Thursday.

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