LSB September 2022 LR

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AGEING & THE LAW Advice for young practitioners in succession law navigating issues in an ageing population MIKAYLA WILSON AND JULIA WELTNER, SOLICITORS, SEDSMAN LEGAL As practitioners in the area of wills and estates, many of our clients engage our services as they approach their later years in life. In our experience, ageing clients can be more susceptible and vulnerable to influence, commonly from their own friends and relatives. Accordingly, when we are preparing documents for ageing clients, it is necessary to keep issues such as capacity, undue influence and coercive control, in the front of our minds. In our view, the older population now have noticeably more wealth than in the past, partly due to increasing property prices and superannuation, therefore these issues are unfortunately becoming more common in the context of Australia’s ageing population. Whilst experienced practitioners in this area are well versed in identifying and navigating these issues in the course of practice, we know from experience that these issues can often be subtle and require some gentle investigating by the solicitor. As two young practitioners who have the benefit of being guided by very experienced solicitors in this area, this article will endeavour to provide some useful tips and tricks that we have learnt so far, to assist emerging practitioners in the field of succession law with advising ageing and/or elderly clients. TIP 1: BE ALERT TO CAPACITY ISSUES It is widely known that people become more susceptible to cognitive issues as they age. In 2016, almost 1 in 10 people aged 65 and over were suffering from Dementia. 1 Dementia can cause memory loss and cognitive impairment which affects a person’s ability to reason and rationalise complex matters, which may affect their ability to understand their estate planning documents. Accordingly, it is important to carefully assess each client’s capacity in the course of taking their instructions. While the test for assessing capacity may be obvious to experienced practitioners, the writers are aware that not all graduates are familiar with the principles found in Banks v Goodfellow. 2 Despite being a case from 1870, it continues to be the leading authority on assessing testamentary capacity in Australia. In Banks v Goodfellow, the Court determined that in order to have testamentary capacity, the testator must:- • understand the significance of making a will; • be aware in general terms of the assets comprising their estate; • be able to retain the ability to evaluate and discriminate between the respective strengths of competing claims demonstrating appreciation of the consequence of their decision; and • be free from delusional thought or other disorders of the mind which may influence decision making as to who should (or should not) benefit from the will. It is not necessary to perform a mini mental or have your client answer a myriad of questions about current affairs of the last decade to assess whether your client has testamentary capacity. You could simply start by asking your client about the weather, asking how they travelled to your office, or what they have been up to earlier in the day. Often you will be satisfied of the four fundamental requirements in Banks v Goodfellow by asking your client the usual will instruction questions i.e., asking about their family situation, relationship status, assets and liabilities and how they wish to distribute their estate. However, if any concerns do arise, make notes regarding the same and discuss them with a senior practitioner. If capacity is in question, you should consider whether it is necessary to request a letter of capacity from a medical practitioner prior to preparing or executing any documents. TIP 2: TAKE YOUR CLIENT’S INSTRUCTIONS ONLY Often ageing clients need assistance with arranging and travelling to and from appointments and accordingly, clients are regularly accompanied to our office by their family members or friends. In many instances, those in attendance may be potential beneficiaries of their Will or appointees on their other estate planning documents. It is important to see your client alone to take instructions. If your client attends with a family member/s, politely ask them to wait in another meeting room for the duration of the appointment. In the writers’ experience, most family members will understand and respect the request. However, if we are met with resistance, we explain that it is our firm’s policy and that we will not take instructions from the client with others present. The presence of others in the meeting can obviously affect the client’s freedom to discuss their true wishes and intentions and may also lend to an inability to properly assess your client’s capacity (i.e., if the family member is answering questions about the client’s 8 THE BULLETIN September 2022
AGEING & THE LAW family or assets on their behalf). In that regard, if you are taking instructions from a couple, ensure both clients are answering your questions and consider whether one is relying on the other to provide key details such as details of family or assets. In some circumstances, the client themselves may insist on their child or other relative sitting in the appointment, as they are uncomfortable answering questions by themselves. We would recommend re-assuring the client that their family member will be nearby and can re-join them at the conclusion of the meeting, if necessary. In those circumstances, make an extra effort to build rapport with the client so they feel comfortable and open in their discussions with you. TIP 3: WATCH FOR SUBSTANTIAL DEPARTURES FROM PAST DOCUMENTS When clients are making drastic changes to their existing estate planning documents, practitioners should take note of the reason for the changes. For example, if a client’s current will leaves everything equally between their children and they now want to entirely remove one child, question why the client is making that decision. If the client is unable to give an objectively rational explanation for the changes, this may indicate that there is an issue with capacity, or that they are being influenced by a third party. However, we accept that unreasonableness does not always equal incapacity or third-party influence – some clients can just be unreasonable! You may think it is irrational for them to write their child out of the will because, say, they do not like their child’s new partner. However, you can only act in accordance with your client’s instructions so ensure you advise them accordingly (Hello Inheritance Family Provision Act 3 ) and keep proper notes about their instructions (more on that below). TIP 4: KEEP THOROUGH FILE NOTES! All of the above tips bring us to our most important tip (for the practitioner anyway) – keep thorough file notes! It is crucial to keep thorough file notes, especially when capacity or undue influence may be in issue. Keep in mind that it can often be years or even decades after a document is executed that the testator’s capacity or undue influence is called into question. In those circumstances, your file notes may be heavily relied on to provide context of the client’s state of mind at the relevant time, and your advice to them. Accordingly, the writers endeavour to keep detailed notes on anything that may be relevant, including: • Who made the appointment? Was it the client or someone on their behalf? • Where are you attending on the client? In the office, in their home? In 2020, it was reported that more than two-thirds of aged care residents have moderate to severe cognitive impairment. 4 When attending on a client in an aged care facility, pay particular attention to capacity concerns, and keep a detailed file note. • Did someone bring the client to the appointment? If so, who? If you follow our advice in tip 2, make sure you note that they were not in the appointment room when you took your client’s instructions. • If there are concerns regarding capacity, make notes accordingly – what were your concerns, were they dispelled? If so, how? • If there are significant departures from previous documents, note your client’s reasons. • Make notes of any advice given pursuant to the Inheritance Family Provision Act. 5 Overall, while these issues can apply to any clients in this field, it is important to be particularly vigilant with ageing clients, especially where they have become more reliant on others for support and assistance. In addition, we note that whilst the above matters are most relevant in taking instructions for Wills, they are also broadly relevant with respect to documents such as Enduring Powers of Attorney and Advance Care Directives and to other transactions such as transfers of assets to family members for less than market value. Finally, our last tip for other young practitioners is to always seek the advice of a senior practitioner when necessary – do not hesitate to take advantage of their years of experience. On that note, the writers would like to thank Michael Rizzuto of our office for settling our above advice. B Endnotes 1 Australian Institute of Health and Welfare, Australia’s Health 2016 (Web Report, 13 September 2016) Ch 3. 2 (1870) LR 5 QB 549. 3 1972 (SA). 4 Royal Commission into Aged Care Quality and Safety, Research Paper 8 - International and National Quality and Safety Indicators for Aged Care (Report, 24 August 2020) p161. 5 1972 (SA). September 2022 THE BULLETIN 9
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