A new case has expanded upon this decision. Re Rentis Pty Ltd [2023] QSC 252 focused on a deceased, Robert, who had appointed his wife and his brother as attorneys under a valid Enduring Power of Attorney. Importantly, his Enduring Power of Attorney gave his attorneys the express power to “renew any binding death benefit nomination” that he had made.

Robert lost decision-making capacity in 2020. His wife died in the following year.

Robert had previously made a BDBN allocating a portion of his superannuation death benefits to his wife. Following her death, Robert’s brother (acting as his attorney) updated Robert’s BDBN to divide his member death benefits between Robert’s children and Robert’s Estate.

The Court in Re Rentis considered whether such nomination was valid under the Attorney’s power to ‘renew’ a BDBN. On a strict interpretation of the word ‘renew’, such power could allow the attorney only to re-confirm an existing nomination in the same percentages, for example where a previous nomination had lapsed after three years.

The Court decided, however, that a narrow interpretation “would produce capricious, unreasonable and certainly inconvenient results”, and that such a power in an Enduring Power of Attorney should allow the Attorney to update the principal’s nomination when circumstances had changed (e.g. on the death of a beneficiary).

While such decision has not yet been tested in Victoria, we at Tony Kelly Lawyer & Estate Planner are pleased with this update. One issue of concern for us when assisting clients with their BDBNs is that many funds do not allow a ‘default’ or ‘two-tier’ nomination; that is, clients cannot dictate what should happen to their death benefits if their first choice of beneficiary predeceases them, and the client is unable to update their nomination due to incapacity or otherwise. Such a ‘default’ nomination is usually possible with a self-managed superannuation fund (SMSF) but our efforts to convince industry funds to adopt a two-tiered nomination form have so far been unfruitful.

Allowing a principal’s attorney to update the principal’s BDBN circumvents this issue, as the attorney can ensure a valid BDBN is still in place if the principal’s first choice of beneficiary has died and the principal no longer has capacity to update their own nomination. Above all, this decision underscores the need to have a robust and comprehensive Estate and Succession Plan in place that includes not only a Will and Binding Death Benefit Nomination but also Powers of Attorney.

If your Estate and Succession Plan does not include all of the above, we recommend that you contact us today to set up a no-obligation consultation.

The post Update – Superannuation Binding Death Benefit Nominations appeared first on Tony Kelly Lawyer & Estate Planner.

Advance Care Directive

An Advance Care Directive sets out your preferences for medical treatment, should you be unable to make those personally. There are two kinds of Advance Care Directives: instructional directives and values directives.

Instructional directives should expressly state which procedures you consent to or wish to refuse so that the document operates as if you were to give consent to, or refuse, such a treatment on the day. For example, an instructional directive could include express consent to the use of a ventilator in the circumstances of respiratory failure, or express refusal of CPR if there was a chance of there being significant impairment as a consequence of the medical event.

If you have lost decision-making capacity but have an instructional directive in place, a health practitioner must give effect to that directive, unless the excluded treatment is deemed by them not to be clinically appropriate.

Value directives do not specify which treatments you consent to or refuse; rather, they contain statements about preferences and values which will then provide guidance for any medical treatment decisions. An example of a suggested statement is ‘if I cannot recognise my children, I no longer wish to receive medical treatment’ or ‘I would like my treating health practitioners to take all reasonable steps to prolong my life’. Again, if you have lost decision-making capacity but have an appropriately worded directive in place, a health practitioner and your medical treatment decision maker must consider such values directive(s) when making their decisions.

Advance Care Directives are therefore important for ensuring that your wishes for your physical health are carried out.

Advance Statement for Mental Health

An Advance Statement for Mental Health is similar to an Advance Care Directive, but operates specifically to give instructions on treatment should you require compulsory hospitalisation under the Mental Health Act 2014. We recommend making an Advance Statement for Mental Health if a client has previously been hospitalised due to mental illness.

The directives may include:

• Treatments and strategies that you have found helpful in the past
• Conversely, treatments and strategies that you have not found to be helpful
• Preferences for or against certain types of treatment, such as particular drugs or electroconvulsive treatment

Whilst a psychiatrist must have regard to the treatment preferences expressed in the Advance Statement, it is also permissible to include matters which are “non-binding” but which may be useful for your treatment team, such as details of your general health, daily routine and dietary preferences.

Company Power of Attorney (also known as Corporate Power of Attorney)

A Company Power of Attorney appoints someone to act on behalf of a company (rather than one issued by its officers which only relates to actions which may be undertaken on their behalf personally). These Powers are usually created by company directors or board and take effect should the director(s) lose decision-making capacity.

It is also possible to make a Company Power of Attorney for a fixed term to cover situations such as where a director is overseas and needs someone to carry on the business in Australia. An attorney for a company can do anything that a company director can lawfully do, such as:

• Oversee the operations of day to day affairs
• Issue or cancel shares in the company
• Grant options over unissued shares in the company
• Distribute any of the company’s property (which includes dividends) among the members

As referred to in our previous post on Powers of Attorney, a Company Power of Attorney is a straightforward method of allowing an attorney to have control of an SMSF where the trustee is a company and to be able to make all decisions that the trustee company of the SMSF can make in such capacity subject to the provisions of the trust deed.

A Company Power of Attorney is also important for the execution of documents. Under Section 127 of the Corporations Act 2001, most companies can only execute a document with the signature of two directors or a director and a company secretary. If one director loses capacity and does not have a Power of Attorney in place, it becomes very difficult to carry out any business of the company. If spouses are co-directors of a company and, for example, the company owns real estate, the spouse with capacity would not be able to sell that property to fund the member’s retirement or care without a valid Power of Attorney granted by the company in place.

Accordingly a Company Power of Attorney resolves any such issues of directors or secretaries losing capacity. It has the effect of appointing an agent of the company (the attorney) who can execute contracts alone under Section 126 of the Corporations Act. This provides security for the equity holders should the directors be unable to oversee the management of its affairs.

If you do not have advance planning documents in place, it’s time to consider which of the above documents (and those covered in Part One) are right for you. Contact Tony today to tailor your Estate and Succession Plans to your needs.

The post Powers of Attorney and Related Documents Explained – Part 2 appeared first on Tony Kelly Lawyer & Estate Planner.

In this series of blog posts, we will take you through a number of important advance planning documents that can protect your future affairs in the event that you lose decision-making capacity.

Enduring Powers of Attorney (Personal and Financial)

We recommend that each of our adult clients should have a “standard” Enduring Power of Attorney (EPOA) for personal and financial matters as a minimum. You can appoint only one or multiple attorneys to act on your behalf. They can also be empowered to act alone or in concert. In the case of multiple appointees you can provide that there must be a minimum number to act in concert; e.g. 2 out of 3 children.

You can also stipulate whether your attorney(s) are empowered to make decisions on financial matters, personal matters or both. Generally, we recommend the inclusion of a clause in the EPOA document specifying that the Power does not take effect until you have lost decision-making capacity and a medical professional has so certified.

Examples of ‘financial matters’ include:

• Paying expenses for the donee of the power (referred to as the “principal”) for their maintenance, upkeep and support (such as mortgage payments or rent and household bills
• Paying any debts of the principal
• Making investments for the principal
• Carrying on any trade or business of the principal (unless if that activity is carried on by a company where in which case other arrangements will need to be put in place)
• Insuring, renovating or selling the principal’s property

Examples of ‘personal matters’ include:

• Where and with whom the principal lives which includes whether they need to be placed into care
• Daily living issues such as diet and dress

EPOAs and Superannuation

A common feature of an Estate Plan is a Binding Death Benefit Nomination (BDBN) whereby the principal nominates who is to receive their superannuation death benefits. We recommend that a BDBN should be non-lapsing and that your EPOA includes a provision explicitly authorising or prohibiting the attorney to deal with your superannuation, including the power to create a new BDBN.

The situation is somewhat more complicated if you have a self-managed superannuation fund (SMSF). Whilst you may want your attorney to be able to act as a director of your SMSF in your stead should you lose capacity, it is important to confirm that the SMSF’s trust deed does not prohibit this. If the trustee for the SMSF is a company or body corporate, the company’s constitution will also need to permit the attorney to take over as a director. If the constitution does so permit an attorney to take over as director, this may require the making of a Corporate Power of Attorney for such purpose (which we will address in another part of this series).

Appointment of Medical Treatment Decision Maker

Recent legislation has created the new role of Medical Treatment Decision Maker (MTDM) in Victoria whereby a MTDM can make decisions about your medical care if you should lose decision-making capacity, either permanently or temporarily. Again it is possible to appoint only one MTDM at a time, or several alternate MTDMs in case the first choice is unable to act, or to continue to act. When appointing a MTDM, you may include any limitations or conditions, such as medical treatments that you may wish to refuse for religious or other reasons.

When a MTDM makes decisions on your behalf, they must make the decision that they believe you would make if you still had capacity. Accordingly, the MTDM must consider any preferences that you have expressed and your values. For this reason, it is wise to appoint someone close to you to act as your MTDM, as they can also choose to refuse medical treatment if they believe that this is consistent with your preferences and values.

Making those preferences and values known to your MTDM is therefore incredibly important. In our next post, we will cover a binding method of providing instructions as to your medical care, known as an Advance Care Directive.

Can’t wait for Part Two? Contact Tony today to discuss planning for your future.

The post Powers of Attorney and Related Documents Explained – Part 1 appeared first on Tony Kelly Lawyer & Estate Planner.