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You Decide Who Decide Part 1

This is the start of a multi-part Estate Planning Education framework we have been working on, we will be going through the basic terms, explaining how it relates to different roles within the Estate Planning documents and eventually, these will be released as a video series.

Let’s take on decision-making capacity. The ability to make a decision is called ‘decision-making capacity’. All adults are presumed to have decision-making capacity. Generally, you have decision-making capacity if you can understand the nature and consequences of a decision after it is explained to you, and can communicate it in some way. Each state or territory has a specific definition and provides all sorts of toolkits and information, we will be adding these into our resources section.

Back to you, you may have decision-making capacity for some types of decisions but not others, depending on how complex the decision is and your decision-making ability may also fluctuate. For example, you may be more alert in the morning and able to make decisions that you would struggle to make later in the day. Your ability to make decisions can also be temporarily affected by factors like medication, stress, illness or grief, this all needs to be taken into account when reviewing ‘decision-making capacity’.

Now similar to innocent until proven guilty, ‘decision-making capacity’ is the same, the presumption is that every adult has the ability to make their own decisions.

Are there any risks in appointing financial and lifestyle / medical decision-makers?

Mostly it works well. However, sometimes things can go wrong. It might be that the person you thought you could trust to act on your behalf isn’t careful or reliable, misuses your money or takes advantage of you. This type of conduct can be abusive to you and your rights. Alternatively, your decision-maker may not understand their obligations. You may face challenges in recovering your money if things do go wrong. However, you can reduce the risk of this happening. For example, you can make sure that your appointed decision-maker is aware of their responsibilities when they agree to take on the role. You can also place limits and conditions on your decision-makers, or as we recommend involve more than one person andmost importantly have discussions (and document) with your decision-makers so they clearlyunderstand your intentions.

For every adult, we highly recommend having both a financial and a lifestyle decision-maker and having backups in case your initial decision-maker is not or no longer available to take on that role.

Additional Resources

Making an enduring power for financial decisions checklist

You Decide Who Decides
Making an enduring power for financial decisions booklet

Disclaimer

The information we provide in this series is a guide only. The laws vary by state & territory and combined with your situation, could require legal advice, LGen Estate Planning can assist in providing details of a specialist Estate Planning legal practitioner in your state or territory, just call or email us.