Parents of vulnerable children face a huge obstacle if their child has reduced capacity and cannot make a Power of Attorney. Here’s what Equity Trustees did to help one concerned mother overcome a legal catch-22. 

As a parent, you never stop worrying about your child and their future. Michaela*, mother of Shay* who lives with a disability, always felt concerned about would happen to Shay when she died. 

Day-to-day, Michaela did all that she could to support her beloved daughter, who had reduced capacity. She even managed all of her banking, expenditure and NDIS plan. However, Michaela did so without a formal Power of Attorney (POA) appointment in place.

POA is a legal document that allows a person (also known as the principal) to appoint another person (the attorney) to make legal and financial decisions on the principal’s behalf.

Under the law, Shay did not have the capacity to make an enduring POA and could not legally nominate an attorney to act on her behalf.

“It was understandable that Michaela was worried about who would act for Shay,” says Suzie Willis, Senior Estates and Trusts Solicitor at Equity Trustees.

“She was very concerned about who would step in to help Shay do her banking, deal with Centrelink and make NDIS-related decisions in the event that she died.”

Suzie explains that although Michaela could appoint an attorney under power to manage her own finances, the enduring POA would have only lasted during her lifetime. Ending on her death, POA would have only related to Michaela’s assets and not Shay’s. This legal issue was a problem, given that Michaela intended to leave all her assets in trust for Shay in her Will.

Michaela was staring down the barrel of a financial conundrum, faced by many parents of children who have reduced capacity.

“It was really important to Michaela to find a solution because she wanted to know that Shay would be taken care of upon her death. She did not want to die knowing her daughter would be left in such a vulnerable position.”

Moving forward with legal expertise

Michaela’s worries were eased when she met with Equity Trustees to discuss a legally recognised way forward, in the absence of a POA.

“Equity Trustees had the internal, legal expertise to advise Michaela on what she could do to overcome her legal dilemma and gain peace of mind that would last the rest of her life.”

Michaela decided to make Equity Trustees her trustee. She wanted Equity Trustees to be appointed as Shay’s financial administrator but, as per legal requirements, the arrangement would only come into effect upon her death.

“Michaela also wrote a letter to Shay’s doctor, support workers and Equity Trustees stating her desire for Equity Trustees to be nominated as Shay’s financial administrator. The letter will be used by Shay’s support worker to make an application to the Victorian Civil and Administrations Tribunal after Michaela dies.”

It was also decided that, in the event that Shay ever gains the capacity to make a power of attorney during Michaela’s lifetime, staff at Equity Trustees would have a conversation with her about estate planning when the time was right.

“For now though, there is a solid plan in place that will see Shay provided with the financial support she needs after Michaela’s death.

“Michaela has also received the peace of mind she needed. She’s a great mum who now knows her daughter will be looked after financially, no matter what the future holds.”

*Name has been changed for privacy purposes.

“It was really important to Michaela to find a solution because she wanted to know that Shay would be taken care of upon her death.”