Power of attorney for brain damaged individuals with some capacity after illness

[INVSTOR]

I am discovering this isn't an easy situation. How do others deal with this? Ultimately intentions of decisions are to protect the person's assets so although the person may not be happy with the decisions you make for them it is better to be cruel to be kind?
A few things I have encountered:
- Family member using bank account as their own
- Friend wanting to build on their land and provide accommodation for them
- Feel ill person may be better off downsizing and owning a property outright rather than have mortgage

I don't want to delve too deep but I'm sure other people may have been down this path that can offer some general advice.

My feeling is you need to say 'no' to friends/family from beginning to protect the person who may not have capacity to make correct decision. Also make decision that they will have to downsize, even if it upsets them.

 

[wylie]

Do you know someone with diminished capacity who has a family member acting as a POA who is doing the wrong thing?

 

[wylie]

We have a family member who is schizophrenic who owns her own home (aged 50). She refused to allow any family member to help in her affairs, even when it seemed she hadn't paid rates and was at risk of having her house sold from under her. But it is usually a family member who has to call the police when she doesn't take her meds and ends up with paranoia.

It is not an easy situation, will never get better, but there is nothing any of her family can do except bring in the Government to enable us to manage her affairs. It hasn't come to that yet, but might one day.

 

[MarkB]

Ultimately intentions of decisions are to protect the person's assets

Protecting assets is a pretty narrow approach to being a PoA (or EPoA) imo.

Protecting the persons "best interests" is how I would describe it (subject to the legal authority one has).

Since it needs to be acknowledged that acting in someone's best interests could actually include spending money / parting with assets to provide a better quality of life.

 

[whiteduck]

We have a family member who is schizophrenic
Wylie - I work in Mental Health. We try not to use a diagnosis in the adjective form. Eg would you say my family member who is arthritic, or gouty or parkinsonian. Better to stay your family member who suffers from schizophrenia. Then they are not defined by the disorder.

who owns her own home (aged 50).
Well done to her for owning home - the majority of those with severe mental illness do not. They are among the most disenfranchised, poorest groups in society.

She refused to allow any family member to help in her affairs, even when it seemed she hadn't paid rates and was at risk of having her house sold from under her.

I feel for her, and for your family. It is a difficult situation to balance. Her autonomy versus her home/health. Psychotic disorders by their very nature mean the person when unwell usually loses at least some insight.

But it is usually a family member who has to call the police when she doesn't take her meds and ends up with paranoia.
And often is. I have seen this time and time again. And is often difficult to get treatment if they are not "unwell enough".

It is not an easy situation, will never get better, but there is nothing any of her family can do except bring in the Government to enable us to manage her affairs. It hasn't come to that yet, but might one day.

If you can, continue to stand buy her and support how you can. If there is a period of time when she is well, you may be able to work with her to set up some time of auto payment method to pay her rates etc.

For some of our clients it becomes a matter of having to make legal orders to initiate these things when they have clearly shown in the longer term they are unable to manage their finances etc. The relevant state trustee and guardian is usually involved. A mental health tribunal can also make a financial management order.

 

[whiteduck]

I tried to fix up my post above. My comments went in with Wylie's. I couldn't change the font. Apologies. Hope people can read it.

 

[INVSTOR]

I should have separated my initial post to make more sense as my concerns are in regards to two separate situations.
1st situation: Someone close to me is POA and it appears a family member has taken over an account and money.
2nd situation: I've been asked to be POA (taking over for my mum who is current POA) in a separate situation although paperwork isn't completed. I feel it would be a very difficult situation to allow a friend and their family to build a house and a granny flat on her block of land with a legal agreement set up with clause that whoever dies first the property gets transferred to other party. If she needs full time care in a couple of years there would be no asset to sell. She is keen to do this but I don't feel that someone with full capacity would see this as a good idea.

 

[INVSTOR]

Thanks white duck for insight. It is a difficult balance and I do think it's sad to see a person lose their independence, try to take care of their finances, health, etc.

 

[Joe D]

If she needs full time care in a couple of years there would be no asset to sell.

I have Enduring Power of Attorney (EPoA) for several elderly relatives. If you are happy to act in this persons best interests, I suggest you arrange EPoA rather than simple PoA and ensure that the executed document is lodged at Reg of Titles.

If you don't register this you will have difficulties should the time come when you need to sell the property to pay a Bond for nursing home entry (or other reason).

I also suggest you document the persons wishes whilst they have (mental) 'capacity' so you can demonstrate this should some family member dispute your actions.

 

[Paul@PFI]

I am discovering this isn't an easy situation. How do others deal with this? Ultimately intentions of decisions are to protect the person's assets so although the person may not be happy with the decisions you make for them it is better to be cruel to be kind?
A few things I have encountered:
- Family member using bank account as their own
- Friend wanting to build on their land and provide accommodation for them
- Feel ill person may be better off downsizing and owning a property outright rather than have mortgage

I don't want to delve too deep but I'm sure other people may have been down this path that can offer some general advice.

My feeling is you need to say 'no' to friends/family from beginning to protect the person who may not have capacity to make correct decision. Also make decision that they will have to downsize, even if it upsets them.

State Guardianship Authority may be the relevant authority. They can be appointed as the persons guardian and can authorise others to be that guardian. Such an appointment is in capacity as trustee for that person. Illegal use of the beneficiary property is a breach of trust. A guardian may make decisions or may assist that person to facilitate their own decisions IF they agree.

Common use is where a person may lack legal capacity, mental issues, gambling issues even. Age persons, brain injuries etc. A person with impaired mental issues including brain damage cannot appoint a EPOA or EPA if they lack capacity.

Depends what state you are in.. eg NSW. http://www.service.nsw.gov.au/nswgovdirectory/guardianship-tribunal

 

[nww]

Not sure of your location but please be very careful if you go down the road of
using NSW trustee and guardianship.
Been trying to have a relatives property sold to buy a more user friendly home
and closer to other relatives, now after 18 months looks like going to high court
to have the trust terminated.
They see this as an investment for the person and forget there is a person at the
end of this in need , this is someone who can now not manage 15 steps to their
property, there is no understanding and they see our family role as trying to rip them off.

 

[INVSTOR]

I have Enduring Power of Attorney (EPoA) for several elderly relatives. If you are happy to act in this persons best interests, I suggest you arrange EPoA rather than simple PoA and ensure that the executed document is lodged at Reg of Titles.

If you don't register this you will have difficulties should the time come when you need to sell the property to pay a Bond for nursing home entry (or other reason).

I also suggest you document the persons wishes whilst they have (mental) 'capacity' so you can demonstrate this should some family member dispute your actions.

Sorry, I was just about to update my post as I realised it was incorrect. They both should be EPOA.

In both instances there is either a family member or friend wanting to alter sick person's PPOR. I think mixing assets/family home with a family member or friend should not be considered as If their health deteriorates further it complicates selling PPOR to access nursing home care, etc.
In the above cases the impairment is due to Stroke and an Advanced, aggressive type of MS.

 

[Paul@PFI]

Not sure of your location but please be very careful if you go down the road of
using NSW trustee and guardianship.
Been trying to have a relatives property sold to buy a more user friendly home
and closer to other relatives, now after 18 months looks like going to high court
to have the trust terminated.
They see this as an investment for the person and forget there is a person at the
end of this in need , this is someone who can now not manage 15 steps to their
property, there is no understanding and they see our family role as trying to rip them off.

That's right. And the NSW T&G are probably charging huge fees paid out of the proceeds / income. They can sell the property as they see fit. Its worth remembering that one of the best examples of the problems of living without power of guardianship occurs every day in hospitals....The family don't decide if the machine gets turned off or kept on...The doctor does unless a person holds guardianship. A spouse has NO RIGHTs without this document. Sure they may ask - Its just a process to make you feel informed. Reality is a spouse may have zero choice and the hospital can send the patient to a horrid hospice if they choose rather than to where the spouse decides.

 

[Terry_w]

I should have separated my initial post to make more sense as my concerns are in regards to two separate situations.
1st situation: Someone close to me is POA and it appears a family member has taken over an account and money.
2nd situation: I've been asked to be POA (taking over for my mum who is current POA) in a separate situation although paperwork isn't completed. I feel it would be a very difficult situation to allow a friend and their family to build a house and a granny flat on her block of land with a legal agreement set up with clause that whoever dies first the property gets transferred to other party. If she needs full time care in a couple of years there would be no asset to sell. She is keen to do this but I don't feel that someone with full capacity would see this as a good idea.

1. Attorney is breaching their fiduciary duties and could be sued. other people close to the appointor could apply to a tribunal (in NSW Guardianship tribunal or supreme court) to replace the attorney.
2. Host of legal issues here and it will likelly end up in tears and legal fees.

 

[Terry_w]

I have Enduring Power of Attorney (EPoA) for several elderly relatives. If you are happy to act in this persons best interests, I suggest you arrange EPoA rather than simple PoA and ensure that the executed document is lodged at Reg of Titles.

If you don't register this you will have difficulties should the time come when you need to sell the property to pay a Bond for nursing home entry (or other reason).

I also suggest you document the persons wishes whilst they have (mental) 'capacity' so you can demonstrate this should some family member dispute your actions.

In NSW an appointment lapses if the attorney loses capacity unless it is a speccial enduring power of attorney. It needs to be explained by a solicitor and signed off.

No need to register a POA unless the attorney will deal iin property - lease sell buy mortgage etc. It ccan be registered later. (NSW)

 

[Terry_w]

Not sure of your location but please be very careful if you go down the road of
using NSW trustee and guardianship.
Been trying to have a relatives property sold to buy a more user friendly home
and closer to other relatives, now after 18 months looks like going to high court
to have the trust terminated.
They see this as an investment for the person and forget there is a person at the
end of this in need , this is someone who can now not manage 15 steps to their
property, there is no understanding and they see our family role as trying to rip them off.

the government trustee company which can act as guardian/trustee/financial controlloer of a person and the guardianship tribunal which appoints the guarddian. Another relative/friend can apply to remove the current financial guardian and appoint another relative/friend or a profesisonal company.

 

[Terry_w]

Sorry, I was just about to update my post as I realised it was incorrect. They both should be EPOA.

In both instances there is either a family member or friend wanting to alter sick person's PPOR. I think mixing assets/family home with a family member or friend should not be considered as If their health deteriorates further it complicates selling PPOR to access nursing home care, etc.
In the above cases the impairment is due to Stroke and an Advanced, aggressive type of MS.

They should apply to the courts for advice on this as they would be benefitting themselves and exposing themselves to litigation later.

I know of one case where a guardian of children used the children's money to upgrade the house owned by the guardian - the court allowed it as the children were living in that house and for a few other reasons.

 

[INVSTOR]

Thanks for opinions Terry and others! I really need to do some research and become a lot more educated on this topic.

 

[nww]

the government trustee company which can act as guardian/trustee/financial controlloer of a person and the guardianship tribunal which appoints the guarddian. Another relative/friend can apply to remove the current financial guardian and appoint another relative/friend or a profesisonal company.

We have tried again and again to explain the situation but they only see
dollars, you can find a case worker who understands but then when the send everything to their solicitor for review they see it only as an investment for the trust.
We have now been advised by them via our solicitor we need to take them to
court and pay their legal fees to have the trust dissolved as there is no money
in the trust account anymore, they even send a yearly account fee to us for them to handle sending the rates notice for us to pay.

 

[Terry_w]

is it a trust or appointment of an attorney or financial guardian? There is a big difference but the fiduciary duties of a trustee or attorney are similar - not to benefit themselves unless clearly authorisedby deed or court.