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Be prepared to be Forgetful

Most people at some stage of their lives can be forgetful. Sometimes they may be on a medication that has a side effect of forgetfulness. Often, we hear the expression that he or she is a bit forgetful nowadays, when people are talking about an old friend, parent or acquaintance.

It is when the forgetfulness moves past the “bit stage” that there can be real worries. Dementia is not just a condition of the elderly, it can occur at a relatively young age. Children and friends of the demented person become increasingly worried, and often do not know what to do.

When talking to the person, the time of day is important, with mornings generally being a more coherent time, with the worst time being later in the day. Long term memory is often better than short term, so it is common for the person to “warp back in time” to when they were a lot younger. So, they may remember what happened years ago, yet not even remember a loved one’s visit the day before.

It pays to be prepared even for events that may never happen. A good starting place is to seek legal advice about having enduring powers of attorney (EPA) set up. An EPA is a legal document giving someone the power to act on your behalf if you become mentally incapacitated, either through dementia or some other form of illness such as stroke.

The reason it is important to do this is that, once you are assessed by a health practitioner as being unable to make decisions yourself, no-one else including your partner of children can deal with your affairs without an order from the Family Court. Going to court is an expensive, time-consuming and stressful process which is best avoided. It can cause a lot of mental anguish for your loved ones who want to act in your best interests.

There are two types of EPAs. One is for your money and property and one for your personal welfare. Your appointed attorneys can do things such as pay your bills, look after your bank account, sell your property on your behalf, approve medical treatment or make the arrangements to move you to a rest home.

These are important decisions that may need to be made, so it goes without saying that the person or people you appoint in the role of attorney need to be worthy of your trust. An extra safeguard for a money and property EPA is to appoint two people who must act together on your behalf.

Under an EPA, an attorney can only act on your behalf once you have been assessed as being mentally incapacitated. To set up EPA’s you will need to take independent legal advice. It is best to get them in place while you are still relatively young. If someone has already lost their mental capacity it is too late.

We always advise our clients to make sure that their estate planning is up to date. This includes Wills, EPA’s, and family trusts where appropriate. It is an area where professional legal advice should be sought.

Disclaimer

Steven Barton (FSP 32663) and Susan Pascoe Barton (FSP 32382) are Certified Financial Planners and Authorised Financial Advisers.  Their initial disclosure statements are available free of charge by contacting them on (07) 3060080 or they can be downloaded from www.pascoebarton.co.nz. This column is general in nature and should not be regarded as personalised investment advice.