Why Guardianship and Powers of Attorney are an important part of your Estate Plan

Making an Enduring Power of Guardianship (EPG) and Enduring Power of Attorney (EPA) are an important part of the estate planning process, and they should be reviewed regularly as part of an estate plan.

An EPG allows a person to nominate who they want to make important lifestyle, care and medical decisions when they are no longer able to do so whilst an EPA allows a person to nominate who they want to make financial decisions on their behalf.

An interested person may make an application under the Guardianship & Administration Act (GAA) seeking orders appointing them, or someone else, as the Guardian and/or Administrator of a person (the Represented Person).  The Application is made to the State Administrative Tribunal (the Tribunal).

A key question in any application is whether or not the proposed Represented Person has already made an EPG or an EPA.  If so, then the Tribunal will not make an order unless it considers that the person or persons that have been appointed are not acting in the best interests of the Represented Person.

The GAA legislates a presumption of capacity, that is that each person is presumed to be capable of looking after their own health and safety, making reasonable judgements in respect of matters relating to their person, managing their own affairs and making reasonable judgements in respect of matters relating to their estate until the contrary is proved to the satisfaction of the Tribunal.

To displace the presumption of capacity requires clear and cogent evidence of incapacity leading the Tribunal to be actually persuaded that the person in respect of whom the application is brought is a person for whom a Guardianship Order can be made (under s.43(1) GAA) or for whom an Administration Order can be made (under s.64(1) GAA).

There are limits however on the Tribunal’s power to make a Guardianship or an Administration order.

The GAA provides that a Guardianship Order or Administration Order should not be made if the needs of the Represented Person can be met by other means less restrictive of their freedom of decision and action.  This is where the relevance of any existing EPG or EPA comes in.  If the needs of the Represented Person can be met by an existing EPG or EPA, then that is restrictive of their freedom of decision and action than appointing a guardian or an administrator.

The Tribunal can however still make a Guardianship Order or an Administration Order where the needs of the Represented Person cannot be met by the existing EPG or EPA, such as where the person appointed is not acting in the best interests of the Represented Person, in which case the existing EPG and EPA can be revoked.

The wishes of the Represented Person should also be considered by the Tribunal, where this is possible.

The Tribunal can only make a Guardianship Order if it is satisfied on the evidence that the Represented Person is incapable of looking after their own health and safety or is unable to make reasonable judgements in respect of matters relating to their person or is in need of oversight, care or control in the interests of their own health and safety or for the protection of others.

The Tribunal can only make an Administration Order if it is satisfied on the evidence that, by reason of mental disability, the Represented Person is unable to make reasonable judgements in respect of matters relating to all or any part of their estate.  The key phrase is “by reason of mental disability”.  The reason why a person is unable to make reasonable judgments in respect of matters relating to all or any part of their estate must be a mental disability.  Mental disability is defined inclusively in GAA to include an intellectual disability, a psychiatric condition, an acquired brain injury and dementia.

This may be straightforward to satisfy, when the Represented Person suffers from a known disability, or a degenerative illness such as dementia or Parkinson’s disease.  In other cases however, satisfying this condition can be problematic.  Does an addiction such as drugs, alcohol or gambling amount to a mental disability?

Just because a person has a history of making bad decisions, it does not mean the Tribunal has the power to intervene and make an Administration Order.

Once the Tribunal determines that it has the power to make a Guardianship Order or an Administration Order, it must then determine whom to appoint.

The Tribunal can appoint anyone over the age of 18 years who has consented to act and who in the opinion of the Tribunal will act in the best interests of the Represented Person in respect of whom the application is made, is not in a position where his or her interests conflict or may conflict with the interests of the person and who is otherwise suitable to act as the guardian or administrator of that person.

The person appointed must act according to his or her opinion of the best interests of the Represented Person.  The Guardian and the Administrator act in the best interests of the Represented Person if they act as far as possible:

• as an advocate for the Represented Person;
• in such a way as to encourage the Represented Person to live in the general community and participate as much as possible in the life of the community;
• in such a way as to encourage and assist the Represented Person to become capable of caring for himself or herself and of making reasonable judgments in respect of matters relating to his or her person;
• in such a way as to protect the Represented Person from neglect, abuse or exploitation (guardianship) and from financial neglect, abuse or exploitation (administration);
• in consultation with the Represented Person, taking into account, as far as possible, the wishes of that person as expressed, in whatever manner, or as gathered from the person’s previous actions;
• in the manner that is least restrictive of the rights, while consistent with the proper protection, of the Represented Person;
• in such a way as to maintain any supportive relationships the Represented Person has; and
• in such a way as to maintain the Represented Person’s familiar cultural, linguistic and religious environment.

Often applications for orders are contested, with multiple parties believing they or the Public Advocate (Guardianship) or the Public Trustee (Administration) are the best persons to be appointed.  Usually each person will have what they believe are the best interests of the Represented Person at heart, but will have different ideas of what those best interests are.  This can lead to dispute and often acrimonious hearings, which have the potential to negatively impact family relations.

The best way to avoid these issues is to make sure an EPG and or and EPA form part of your estate plan.

If you require assistance with a Power of Attorney, EPG or Application for Guardianship, don’t hesitate to contact Darren Miller and the Culshaw Miller Lawyers Estate Planning Team on 9488 1300.