What Happens If I Don’t Have Powers Of Attorney?
Written by: Karlene Wightman l Legal Team
Many of our articles focus on the importance of succession planning and ensuring that you have a Will and Powers of Attorney in place.
What happens though, if a loved one does not have the mental capacity to understand and therefore make these documents? This article will focus on two main examples:
- An individual has a cognitive/intellectual disability that prohibits them from making a Powers of Attorney due to a lack of understanding; and
- An individual has developed a cognitive impairment, such as dementia, in their elderly years and needs to amend their Will and/or Powers of Attorney.
Scenario 1: Cognitive/Intellectual Disability
There are many children in Australia who are born with a form of cognitive impatient, thereby limiting their understanding and daily living.
Many parents assume that their role in supporting their children, such as managing their finances and making medical decisions for them, will continue once they turn eighteen (18) simply because they are the parents. Unfortunately, this is not the case. When a child turns eighteen (18), whether they have a cognitive impairment or not, they are responsible for their own financial, personal and medical affairs.
Many parents and caregivers are met with significant barriers after their child has turned eighteen (18) and are not provided with any guidance as to where to turn. When a parent asks if their child can make a Will and Powers of Attorney, it is usually because they have been asked to provide it to institutions, for example: a bank or the National Disability Insurance Scheme (NDIS).
It is important to first meet with the young adult in person. It is not as simple as saying: ‘the young adult has a cognitive disability and therefore cannot make a Will and/or Powers of Attorney’.
The individual may still be able to understand, in simple terms, the nature and effect of making these documents. However, often this is not the case. This leaves a parent or caregiver in a situation where they are unable to provide the necessary supports for their children.
The only solution here is to make an application to VACT to be your child’s Administrator and/or Guardian. These documents are similar to Powers of Attorney in that they allow a person to manage another’s financial and personal matters. However, there is a reporting requirement to VCAT so the appointment is much more onerous than being appointed a person Power of Attorney.
Unfortunately, VCAT does not allow a Will to be made on behalf of a person with a cognitive impairment, and therefore the rules of intestacy would apply.
Scenario 2: Developing a Cognitive Impairment
We are often presented with the situation where an elderly person (or sometimes not particularly elderly) has either:
- (a) not been made; or
- (b) wants to alter their Will and/or Powers of Attorney.
Sometimes, the individual will present confused, with an apparent lack of understanding. In other cases, the family members will tell us that the elderly person has a cognitive impairment, such as dementia, and how they should proceed going forward.
If there is a lack of understanding on the part of the elderly person, then a lawyer cannot make Powers of Attorney for them. This is because a lawyer must attest to the fact that they understood the nature and effect of the document and signed it of their own free will.
Again, to overcome this issue, an application to VCAT would need to be made.
VCAT Process
When a person is unable to make or amend a Power of Attorney, but their family members require this legal right, the only alternative is to make an application to VCAT. It is important to understand the process before making the decision to go down that pathway, as it is sometimes the case that is not in the best interests of the individual.
The first step is to complete an application to VCAT. The form is found on the VCAT website and can be downloaded in paper form. The application must state the following:
- The person applying on behalf of the person with a disability;
- Other interested parties to the application;
- The reasons for requiring an administration and/or guardianship order;
- Medical evidence from the treating doctor to advise of the disability.
Once the application is completed, it needs to be submitted to VCAT. This can be done by post, email or fax. VCAT then review the application and will then set a hearing date. At the hearing, all interested parties are required to attend. If this does not occur, then the Member will ask the applicant why this is the case.
There are two main types of applications that are made to VCAT. These are:
- Application to be an administrator for a person with a disability. This will allow the administrator to make financial decisions on behalf of that person, such as handling their bank accounts, shares or other investments, speaking to service providers such as phone companies and managing their money in such a way that they may believe an allowance is necessary for the person with a disability; and
- Application for guardianship. This application will allow the interested person to make personal decisions for the person with a disability, such as where they live, who they live with and what social interactions they have, to name a few.
Is it also becoming more common for an application to be made to VCAT for both administration and guardianship order in order for an interested person to speak to and manage an NDIS Plan for the person with a disability.
At the hearing, all parties will present their point of view to the Member. It is much easier for the Member if all family members agree. However, it is sometimes the case that there are opposing views from family members, and in this circumstance, it is up to VCAT to determine what is best for the person with a disability.
VCAT does ask for the person with a disability to attend the hearing if they are able and will ask them questions.
At the end of the hearing, VCAT will make an Order and that Order will be sent to all interested parties. There is a process for appeal if the hearing does not go according to plan. VCAT will always act in the best interests of the person with a disability and always put their needs above that of any other interested person.
Canny Legal + Your Power of Attorney
It can be daunting to realise that as a parent or caregiver, you no longer have a right to make decisions for your child. It can also be stressful to have to make a Court application, despite you being your child’s main support.
Get in touch with our team if you need support during this stressful and sometimes overwhelming process. We can take you through your options, step by step and give you all of the information you need to make an informed decision.
