While no person expects, nor wishes, to experience a lack of capacity, the very real fact of life is that they may.  Incapacity can be long term or short term and can impact everyone quite differently.

The question of someone’s capacity to understand the nature and the effect of something is fraught with difficulty mainly because capacity is something that is very specific to the person and the type of decision they must make.

With all this in mind, it is not doubt unsurprising that the impact of legal capacity is an area of increasing difficulty and, sadly, ripe for dispute.

This past week, Queensland Parliament passed amendments to various Acts, including our Acts that deal with attorneys and administrators for adults (including those adults that lack capacity).  The Guardianship and Administration and Other Legislation Amendment Bill (‘the Bill’) that was passed included key amendments to lots of the difficult areas where capacity is involved. While the Bill has been passed in the Qld Parliament, the commencement date of the new provisions is yet to be released.

The Bill introduces some key amendments to the Powers of Attorney Act 1998 (Qld) impacting:

  • Conflict transactions: this is a particularly common area of disputes where a decision maker for a person acts in such a way that conflicts with their own personal  interests contrary to their job as the principal’s decision maker where all decisions must be made in that person’s best interest.  The Bill provides some new examples of what is a conflict transaction and what is not.
  • General Principles: the general principles and health care principles to be applied when making decisions for others has had a comprehensive refresher.  The new principles provide a comprehensive overview of the principles that set out the rights and fundamental freedoms that are to be afforded to adults and speak to the importance of maintaining existing relationships for the adult, taking into account cultural and environmental values, privacy, participation of the adult in their own decision making and their own wishes, views and preferences wherever possible.
  • Beneficiary interest in adult’s Will: the Bill introduces a new set of sections that deal with a beneficiary’s interest under a deceased principal’s Will. The new sections provide for clarity around a beneficiary’s entitlement where a principal’s property has been lawfully sold by an attorney that was intended for that beneficiary. The new section provides that a beneficiary has the same interest in the proceeds or other property that took the place of that originally intended property under the Will in this situation.

Like provisions were also introduced to the legislation regarding Administrators of adults (i.e. those that are appointed by the Court or Queensland Civil and Administrative Tribunal (QCAT) to act on behalf of an adult with impaired capacity).

These changes reflect the changing nature of society and the complex situations that can arise in dealing with another person’s affairs. It can be must easier than perhaps realised to fall into strife when making decisions for another. While there are some situations where people simply do the wrong thing, there are also many situations that arise out of no fault of any person but simply circumstance and need and lack of proper advice and planning.  An easy example of this is where a property is gifted to a person in a Will by a person and that same property is needed to be to sold to fund that person’s move into retirement or aged care.  This situations is not one where fault can be attributed and this is only one example of many.

Planning for incapacity can often be more important than planning for death. What today’s society and these amendments are telling us is that the importance of reviewing and evolving your own estate planning should not be an optional task, but a necessary one.

Note: If you’re interested in finding out more of the “nitty gritty” of the above amendments, you can read Michele’s comprehensive coverage of the changes in her blog post here.

Written by Michele Davis, Associate – Head of Succession & Elder Law, Wilson Lawyers

Important Notice: This publication is provided as general information only and should not be considered or relied upon as legal advice. The law is complex and you should always obtain specific legal advice about your circumstances from a qualified legal practitioner. If you require legal advice, please contact our office to see how we can help.