The Disability Dilemma: How Ignoring Incapacity Planning Can Leave Your Estate Unmanaged
Wills - Potential Problem #18: Not Planning for Disability
In New South Wales (NSW), Australia, planning for the possibility of becoming incapacitated is an essential aspect of comprehensive estate planning. This article explores the importance of incapacity planning and highlights a real court case that demonstrates the potential pitfalls of neglecting this critical element.
Real NSW Court Case
The case of Estate of Anderson v Anderson [2018] NSWSC 456 illustrates the challenges that can arise when incapacity planning is ignored. This case serves as a cautionary tale about the importance of ensuring your estate is managed according to your wishes, even if you become incapacitated.
What Happened
The problem began when Mr. Anderson, a successful entrepreneur, suffered a severe stroke that left him incapacitated. He had not made any provisions for the management of his estate in the event of his incapacity. This oversight led to confusion and disputes among his family members, who were unsure of how to manage his extensive business and personal assets.
Participant Behavior
Mr. Anderson’s family, including his wife and two children, were thrust into a difficult situation. They disagreed on the best course of action for managing his estate and business interests. The lack of clear instructions and legal authority to act on Mr. Anderson’s behalf created tension and conflict within the family, further complicating the situation.
Legal Process
The legal process involved the court appointing a guardian and financial manager for Mr. Anderson. The court had to consider the best interests of Mr. Anderson and his estate, balancing the needs of his family with the legal requirements for managing his assets. This process required extensive legal and medical evaluations to determine Mr. Anderson’s capacity and the appropriate management of his estate.
Financial Implications
The estate, valued at approximately AUD 5 million, faced significant legal fees due to the court proceedings. The prolonged legal process consumed around AUD 200,000 in legal and medical costs, reducing the estate’s overall value. The financial burden and emotional stress on the family highlighted the importance of incapacity planning in estate management.
Conclusion
Ultimately, the court appointed a professional guardian and financial manager to oversee Mr. Anderson’s estate. The decision came after extensive legal battles and considerable emotional distress for the family. This case emphasized the critical importance of planning for incapacity to ensure your estate is managed according to your wishes.
Lessons Learned
- Incapacity Planning: Ensure your estate plan includes provisions for the management of your assets in the event of your incapacity.
- Enduring Power of Attorney: Appoint an enduring power of attorney to manage your financial affairs if you become incapacitated.
- Clear Instructions: Provide clear instructions for your guardian or financial manager to follow in managing your estate.
- Professional Advice: Seek legal and financial advice to create a comprehensive incapacity plan.
References and Sources
- Estate of Anderson v Anderson [2018] NSWSC 456
- NSW Government - Wills and Estates
- Legal Aid NSW - Planning for Incapacity
Tags and Keywords
Incapacity planning, estate management, enduring power of attorney, NSW court case, family dispute, legal advice, Estate of Anderson v Anderson, financial impact, disability planning, estate planning
