The rule in Saunders v Vautier (1841) 41 ER 482 provides a mechanism by which beneficiaries can terminate an unwanted trust by giving a suitable notice to their trustee. That case laid down the rule of equity which provides that, if all of the beneficiaries in the trust are of adult age (sui juris) and are under no disability, the beneficiaries may require the trustee to transfer the legal estate to them and terminate the trust. The rule has been affirmed repeatedly in common law jurisdictions. The trust is thereby terminated, notwithstanding any directions to the contrary, in the trust instrument.
Probably the most common instance of a restriction imposed on a vested interest is a direction to accumulate the income until the beneficiary attains an age greater than twenty-one years. It is not uncommon for testamentary trusts to provide that beneficiaries named in a Will are not to take their testamentary legacy until attaining the age of twenty-five years.
The rule in Saunders v Vautier allows such beneficiaries to require the testamentary trustee to pay the capital sum, together with any undistributed income, when the beneficiary turns eighteen years of age.
As a consequence of the requirement that the beneficiaries must be adults of full capacity, a right of termination of the trust cannot be exercised, under the general law, if any beneficiary lacks legal capacity.
Many jurisdictions have introduced general statutory reforms to deal with problems of incapacity. Individuals, while they still have full capacity, are now able to execute Enduring Powers of Attorney which authorise an agent to act upon their behalf, regardless of any later loss of capacity. Courts or Tribunals may also appoint a guardian or administrator to act on behalf of the person suffering from the capacity.
The question arises, however, whether either of these two categories of authorised person can validly terminate a trust, on behalf of an incapacitated beneficiary, under the rule in Saunders v Vautier.
In the recent Queensland decision of Re Tracey [2016] QCA 194, a divided Court of Appeal provided a framework within which questions of this kind may be resolved. Those proceedings were instituted by the Public Trustee of Queensland, to seek judicial guidance about the extent of its statutory power to act on behalf of various incapacitated adults. The extent of the statutory power vested in the Public Trustee was to do anything in relation to a financial matter that the adult could have done if the adult had capacity for the matter when the power was exercised.
By a majority, the Court of Appeal held that this statutory power was sufficient to authorise the Public Trustee to exercise, in the place of an incapacitated adult, the power to terminate a trust established under the general law or under various statutes. However, the Public Trustee was found to have no power to terminate trusts established by Court order, because the rule in Saunders v Vautier simply did not apply to trusts of that kind. While there was some discussion in the judgments of the analogous position of an agent acting under an Enduring Power of Attorney, the majority did not seek to resolve that question.
The decision in Re Tracey has been followed in subsequent Supreme Court of Queensland cases: Nicotra v State of Queensland [2017] QSC 303, and Re Narumon Pty Ltd [2018] QSC 185. There have been no similar decisions in New South Wales, nor the Australian Capital Territory.
A recent NSW Court of Appeal decision – Beck v Henley [2014] NSWCA 201 – provides an interesting discussion and application of the rule in Saunders v Vautier. If the conditions for the application of the rule apply, the beneficiaries of a trust are, collectively, able to terminate the trust, irrespective of the terms of the trust, and the purposes of the trust. This is a right vested in the beneficiaries and the trustee is under a duty to wind up the trust.
The main precondition for the rule to apply is that the beneficiaries have an absolute and indefeasible interest in the trust property. This case demonstrates that the rule in Saunders v Vautier will still apply where not all beneficiaries wish to terminate the trust, so long as the trust property is divisible, and the allocation of the trust property will not prejudice those beneficiaries. This is because the trust’s operating expenses will be spread over fewer assets and it will not constitute prejudice sufficient to preclude a partial winding-up.
The rule in Saunders v Vautier applies to fixed trusts. For example, in a limited recourse borrowing arrangement, where the acquired asset is held by a custodian, on holding trust for the trustee of the superannuation fund, the trustee, as the only beneficiary and the trustee of the superannuation fund, has an absolute and indefeasible interest in the acquired asset. Consequently, the trustee of the superannuation fund can terminate the holding trust (irrespective of the terms of the holding trust’s deed) at any time.
Similarly, the rule in Saunders v Vautier can apply to discretionary trusts, if all the potential beneficiaries are adults, they all agree, and they are collectively entitled to absolute and indefeasible interests in the trust property.
If someone asked you what was meant by the term ‘money’, what would you say? Would you define it as simply the cash you currently have in your wallet, in the bank, your shares? What about debts owed to you?
Will drafting may be considered by some to be a somewhat simplistic area of the law. However there is great danger if a will is drafted badly and as most succession lawyers can attest, one’s testamentary wishes may not be honoured because of drafting issues.
In Perrin v Morgan [1943] AC 399, the UK House of Lords heard on appeal a decision originally handed down by the UK Court of Appeal in 1942. Defining the term ‘money’ was precisely the question to be considered.
The Testator died, leaving a home-made will. This will directed that ‘all moneys of which I die possessed shall be shared by nephews and nieces now living’. The main issue in contention was whether the Testator meant for the term ‘all moneys’ to encapsulate her whole personal estate. The Testator’s personal estate was mainly comprised of investments (stocks, shares, debentures etc.) and it was questioned whether this phrase ‘all moneys’ was to include these investments.
The traditional view of the courts was to define the term ‘money’ quite narrowly. ‘Money’ was defined to include actual cash, cash held at the bank, dividends due and similar choses in action. The Court of Appeal originally upheld this narrow definition on the basis that ‘they could find no context in the will enlarging the meaning to be given to the word [money]’.
The House of Lords reversed the Court of Appeal’s decision on the basis that it was necessary to consider the context in which the will was drafted and to look beyond the words of the will. The House of Lords was concerned with avoiding a construction of the will which would give the term ‘money’ a specific legal meaning that was markedly different from the ordinary use of the term ‘money’ in the English language.
The House of Lords construed the phrase ‘all moneys’ to include the Testator’s investments based mainly on the fact that it was a home-made will (and it was commonplace for a lay person to define the term ‘money’ as to include their personal estate) and that to construe the term ‘all moneys’ narrowly would cause an unnecessary partial intestacy which arguably the Testator wanted to avoid by drafting a will in the first place.
The effect of Perrin v Morgan has been to accept the need to look beyond the wording of a will and rather to look at the intentions of the will-maker and the circumstances surrounding the drafting of the will.
So for those of you who are considering drafting your own wills, always consider the implications of every word you add (or omit) in your documents. Although the rule in Perrin v Morgan allows for the context surrounding a will to be considered (in certain circumstances), it is prudent to consider carefully your choice of words.
Christmas is a time that we reflect on the year gone by and celebrate with our family members. For some this can mean a get together at home or travelling overseas or interstate to spend time with family members. Everyone should have an estate planning strategy in place and the lead up to the Christmas season is the perfect time to consider your situation. Enjoy your holiday in the knowledge that, if the worst does happen, you have a plan which protects your assets, keeps your businesses and trusts running smoothly in the right hands and provides for your family in the long term.
A well drafted Will with Discretionary Testamentary Trust can achieve your estate planning goals in a manner that offers your beneficiaries maximum asset protection and minimum income and capital gains tax liability.
Where your beneficiary has reached the age of 25 (or another age that you choose, called the ‘preservation age’) they can choose to take their inheritance outright (as a gift) or they can choose to take it through a trust. Where your beneficiary is under the preservation age, their share of your estate is automatically held in a testamentary trust until they attain the preservation age with directions that the capital be preserved for the beneficiary’s education, reasonable maintenance and welfare and medical and dental treatment.
A testamentary trust provides a greater level of asset protection than an outright gift. This is because the trustee, and not the beneficiary, is the legal owner of the asset. A trust therefore allows you to protect your family assets from various threats, including a beneficiary’s wasteful habits or addictions, claims by creditors in bankruptcy proceedings or claims by spouses in a marital breakdown.
One of the most significant and arguably most underappreciated benefits of a discretionary testamentary trust is its tax effectiveness. A discretionary testamentary trust allows a beneficiary to split and stream income and capital to the potential beneficiaries of the trust. The tax effectiveness of testamentary trusts arises out of the fact that rather than paying marginal rates of tax on the income generated by their inheritance (as would be the case under a simple Will), when assets of a testamentary trust are sold, or where income is generated from trust
assets, the trustee has the ability to strategically pass out such taxable income to those beneficiaries who will pay the least tax (the income being assessable in the hands of the recipient beneficiary). This becomes particularly tax effective where the beneficiary has a spouse that does not work (or is on a lower tax rate) or where they have minor children (a testamentary trust treats distributions to minors as if they were adults).
Example:
Mary dies with a simple Will leaving an investment property and cash to her son John. In that income year, John’s inheritance generates $40,000 in income. John works as an accountant and is on the top marginal rate. He will pay $18,600 in income tax for that income year and for each year thereafter (assuming that the income remains constant).
Let’s assume Mary sought advice on her estate planning and had a Will with discretionary testamentary trusts prepared. Mary’s Will offers John the option of taking his inheritance outright or via a testamentary trust. John elects to take his inheritance in the trust. As John has two children, he is able to have trust income distributed equally between his children. John distributes $20,000 to each of his children and since they are able to receive $20,452 tax fee after applying the low income rebate, he is able to receive the entire $40,000 tax free. John has made a tax saving of $18,600 and that is only in year one.
As many people go travelling over the holiday break, it is also important to appoint someone who can act on your behalf in the event that you become incapacitated. If you do not do this then somebody (for example, your spouse) must apply to the ACT Civil and Administrative Tribunal for a guardianship order over you. There is no guarantee of success, and the process can be lengthy and stressful. Appointing an attorney before you lose capacity is a simple matter of filling in a form and specifying the matters (financial, medical and personal care)
over which you want your attorney to have power.
Make putting in place an estate planning strategy your new years resolution and ensure that should the unexpected happen, you will have provided for your family members in a tax and asset protective manner.
Vik Sundar is Managing Director and Advisory of Private Wealth & Tax at Chamberlains Law Firm.
To make an appointment with Vik
call 02 6215 9100 or
email chamberlains@chamberlains.com.au
When preparing a Will, it is important to consider what actually passes in accordance with your Will. It is not uncommon to see a Will where a testator has attempted to gift assets that they cannot legally gift in their Will.
What assets will pass in accordance with your Will is determined by the fundamental distinction between estate and non-estate assets. Importantly these different types of assets require different estate planning mechanisms to ensure that they pass in accordance with your wishes.
Estate assets are those assets that will pass in accordance with your Will. They are those assets held in your personal name or as tenants in common with another person. Examples of estate assets are property, shares or motor vehicles owned solely by you or as a tenant in common with another person.
Non-estate assets are those assets that you might exercise a degree of control over during your lifetime, but will not (or may not) pass in accordance with your Will. These include:
For assets that you hold with another person as joint tenants, where the other person survives you, the right of survivorship determines how that asset will pass when you die. If you predecease the joint owner, then your share will pass automatically to the surviving tenant. However, if the other joint tenant has predeceased you, no right of survivorship will take place and the asset will at this form part of your estate and therefore pass in accordance with your Will.
Superannuation is a non-estate asset and does not automatically pass in accordance with your Will. Passing of superannuation will either be determined by:
When executing a binding death benefit nomination you will need to consider whether you want your superannuation to pass directly to a beneficiary or to your legal personal representative (your estate). Where superannuation is paid to your legal personal representative (either through a binding death benefit nomination or as a result of the discretion of the trustee), it will at this time form part of your estate and will be distributed in accordance with your Will.
Although you may control a trust, family trusts are non-estate assets and do not automatically pass in accordance with your Will. Control passes by virtue of passing the powers of the Appointor. The Appointor is the person who decides who controls the trust and the terms of the family trust deed will usually provide that the Appointor may pass their powers either during their lifetime (by deed) or on death (by Will).
Understanding this distinction between estate and non-estate assets is fundamental to preparing and implementing an effective estate plan that will ensure that those you intend to benefit, actually do.
A central concern during succession planning in family businesses is whether adult children should be admitted into a self-managed super fund (SMSF). It is understandably a complex decision-making process, given that it impacts both personal and business succession planning. Moreover, it also plays a part in affecting family relationships and finances.
According to the Australian Taxation Office, there were 534,176 SMSFs in Australia as per the most recent count in June 2014. Clearly, many Australians are adopting this method of saving for their future. However, there are some important considerations SME owners should keep in mind before adding family members to an SMSF. Here are three key ones.
Is this a cost-effective method?
Because the fund’s fixed costs are shared over two generations of family members in the same SMSF, it can indeed minimise costs overall. However, financial woes can arise if the inter-generational SMSF has a portfolio including only one or two main assets to support the costs.
For instance, if the main high-value asset in the fund is the business property, it would need to either stay within the fund so that the adult children can continue to use the premises in the business or be sold in order to pay out the parent’s death benefits on their death. This can result in not only a funding issue but also further tax and stamp duty costs.
How will it impact family relationships?
Under Australian Law, there is a four-member limit for a SMSF. This can be problematic for families with more than three adult children. Another issue is if the members disagree on investment ideas or goals. It can also be difficult if the members have different risk tolerance levels. Combined, these factors could potentially cause family conflict.
How can legal advice help?
Since SMSF’s are so crucial for retirement savings and estate planning, expert legal advice can help manage the fund carefully. Each step of the legal process, from advice on the fund’s structure to ensuring that the SMSF is compliant with relevant legislation, can be eased with guidance from commercial lawyers.
Interested in learning more on Corporate & Commercial Law?
Click our recent articles below to find out more:
Principles To Remember When Interpreting Terms Of Commercial Contracts
What Do You Do if You Lose a Trust Deed?
Selling Your Business? Make it a “going concern” please.
Christmas is a time that we reflect on the year gone by and celebrate with our family members. For some this can mean a get together at home or travelling overseas or interstate to spend time with family members. Everyone should have an estate planning strategy in place and the lead up to the Christmas season is the perfect time to consider your situation. Enjoy your holiday in the knowledge that, if the worst does happen, you have a plan which protects your assets, keeps your businesses and trusts running smoothly in the right hands and provides for your family in the long term.
A well drafted Will with Discretionary Testamentary Trust can achieve your estate planning goals in a manner that offers your beneficiaries maximum asset protection and minimum income and capital gains tax liability.
Where your beneficiary has reached the age of 25 (or another age that you choose, called the ‘preservation age’) they can choose to take their inheritance outright (as a gift) or they can choose to take it through a trust. Where your beneficiary is under the preservation age, their share of your estate is automatically held in a testamentary trust until they attain the preservation age with directions that the capital be preserved for the beneficiary’s education, reasonable maintenance and welfare and medical and dental treatment.
A testamentary trust provides a greater level of asset protection than an outright gift. This is because the trustee, and not the beneficiary, is the legal owner of the asset. A trust therefore allows you to protect your family assets from various threats, including a beneficiary’s wasteful habits or addictions, claims by creditors in bankruptcy proceedings or claims by spouses in a marital breakdown.
One of the most significant and arguably most underappreciated benefits of a discretionary testamentary trust is its tax effectiveness. A discretionary testamentary trust allows a beneficiary to split and stream income and capital to the potential beneficiaries of the trust. The tax effectiveness of testamentary trusts arises out of the fact that rather than paying marginal rates of tax on the income generated by their inheritance (as would be the case under a simple Will), when assets of a testamentary trust are sold, or where income is generated from trust
assets, the trustee has the ability to strategically pass out such taxable income to those beneficiaries who will pay the least tax (the income being assessable in the hands of the recipient beneficiary). This becomes particularly tax effective where the beneficiary has a spouse that does not work (or is on a lower tax rate) or where they have minor children (a testamentary trust treats distributions to minors as if they were adults).
Example:
Mary dies with a simple Will leaving an investment property and cash to her son John. In that income year, John’s inheritance generates $40,000 in income. John works as an accountant and is on the top marginal rate. He will pay $18,600 in income tax for that income year and for each year thereafter (assuming that the income remains constant).
Let’s assume Mary sought advice on her estate planning and had a Will with discretionary testamentary trusts prepared. Mary’s Will offers John the option of taking his inheritance outright or via a testamentary trust. John elects to take his inheritance in the trust. As John has two children, he is able to have trust income distributed equally between his children. John distributes $20,000 to each of his children and since they are able to receive $20,452 tax fee after applying the low income rebate, he is able to receive the entire $40,000 tax free. John has made a tax saving of $18,600 and that is only in year one.
As many people go travelling over the holiday break, it is also important to appoint someone who can act on your behalf in the event that you become incapacitated. If you do not do this then somebody (for example, your spouse) must apply to the ACT Civil and Administrative Tribunal for a guardianship order over you. There is no guarantee of success, and the process can be lengthy and stressful. Appointing an attorney before you lose capacity is a simple matter of filling in a form and specifying the matters (financial, medical and personal care)
over which you want your attorney to have power.
Make putting in place an estate planning strategy your new years resolution and ensure that should the unexpected happen, you will have provided for your family members in a tax and asset protective manner.
Vik SundarPractice Manager – Private Wealth Chamberlains Law Firm.
Vik advises accountants, financial planners, private business owners and private wealth clients on taxation, estate planning and business restructuring issues.
Self Managed Super Funds (SMSF) are an increasingly popular form of retirement fund, and one of the fastest growing sectors. They offer a high level of flexibility and allow members a wider range of investment possibilities and a greater level of control over their retirement benefits.
However, as with any family arrangement, a SMSF can give rise to uncertainty in how benefits will be paid and create disputes between family members if appropriate care is not taken.
Superannuation benefits usually pass as follows:
A recent decision handed down by the Supreme Court of Western Australia emphasises the importance of ensuring that you have a current binding death benefit nomination in place.
Ioppolo & Hesford v Conti [2013] WASC 389 concerned a dispute regarding the distribution of a deceased member’s interest in her SMSF. Mrs Conti and her husband, the first defendant, had created a SMSF by deed in 2002. The couple were the only trustees and members of the SMSF. Mrs Conti then made a Will in 2005 in which she directed that her children receive her entitlements under the SMSF. She specifically stated that she did not want her husband to receive those funds.
When Mrs Conti died in 2010, she did not have a current binding death benefit nomination. Her husband became the only trustee and member of the SMSF. By deed of appointment in 2011 a company, the second defendant, was appointed trustee of the SMSF. The second defendant disregarded the direction in Mrs Conti’s Will and determined that her entitlements should be paid to her husband, a determination that her children, the plaintiffs, then challenged. Their relevant arguments were, firstly, that the first defendant was obliged to appoint one of the executors of Mrs Conti’s estate as trustee of the SMSF; secondly, that the second defendant did not exercise its discretion in good faith; and thirdly, that the trustee’s determination should be reviewed and overturned
In finding against the plaintiffs, the court held that:
This decision serves as another reminder that superannuation is a non-estate asset that does not automatically pass in accordance with the Will of a member. Therefore a current and valid binding death benefit nomination is crucial to ensure that your benefits pass to your intended beneficiaries.
The case is not ground-breaking; in 2005, the Supreme Court of New South Wales made a similar decision in Katz v Grossman, finding against a plaintiff who alleged an improper exercise of power by the trustee of a SMSF. This case involved a contest between two siblings in relation to the control of a SMSF established by their late father, Mr Katz. Mr Katz had made a non-binding death benefit nomination indicating that he wanted his benefits to be split equally between his two children. When he died, his daughter (Mrs Grossman) became sole trustee and quickly appointed her husband as additional trustee. As trustees of the SMSF they disregarded the non-binding nomination and paid 100% of Mr Katz’s benefits to Mrs Grossman. Although Mr Katz’s son challenged this exercise of discretion, Mrs Grossman and her husband had acted properly as trustees and were entitled to disregard the non-binding nomination.
Chamberlains Private Wealth provides the following checklist for SMSF trustees and members to ensure that their benefits pass to their intended beneficiaries:
Your will is the full stop at the end of your life. It’s the document that expresses your wishes, acknowledges key relationships and can demonstrate a life of purpose and commitment to important causes.
Having a Will and an Enduring Power of Attorney in place is essential for everyone, however particular issues should be taken into consideration at the following key stages in one’s life:
While your twenties are probably more about partying than planning, as soon as you start acquiring assets, whether it is property or your first car, you should have a Will to ensure that your assets pass to your intended beneficiaries.
Death seems like an unlikely event when you are young and healthy, but young people are over-represented in injury statistics. In NSW alone unintentional injury accounts for more than 150 deaths of young people each year .
Even if you don’t have substantial assets, if you work full time and have superannuation, you are likely to have a considerable sized insurance policy as part of your super. If you’re living with a de-facto spouse and don’t have a Will, under intestacy law (the law which determines how assets pass if you don’t have a Will), your girlfriend or boyfriend may automatically receive benefits from your estate and this may not be your intention.
Your thirties can be a bit like the children’s verse – ‘first comes love, then comes marriage, then comes baby in the baby carriage’. Your Will needs to be updated to reflect your changing family circumstances.
Even if you did a Will in your twenties, what most people don’t realise is that marriage actually revokes a Will. Marriage can also bring more than two people together. Where partners have children from previous marriages, whole families are combined and it’s important to decide whether you will favour your biological children in your Will or whether all children will be treated equally.
If you have children, you should also consider who will look after them and act as their guardian should something happen to you. You need to ensure that you leave your estate in a manner that will protect vulnerable children from third parties and from themselves. This may mean ensuring that 18 year-old children do not have unfettered access to their inheritance, but instead, their inheritance can be used for productive purposes and managed on their behalf until they reach a particular age. A testamentary trust can achieve this.
You should also consider what would happen if the bread winner in the family died. Would the surviving parent have to work? Could they stay at home and continue to look after the children? What are the existing debts and would there be sufficient assets and funds to cover these? If you have young children, a testamentary trust can offer your children both tax effectiveness and asset protection benefits.
This is the time in your life where you start accumulating substantial assets (including super). It’s important to update your Will when there are any significant changes to the value of your estate.
Unfortunately, according to the Australian Bureau of Statistics, your forties are also more likely to be the age at which you divorce . Divorce is another important event to review your estate planning. Divorce invalidates any gift to your ex-spouse which, depending on your circumstances may or may not align with your intentions. For example if you had young children that were going to live with your ex-spouse, you may intend to maintain provision for them in your Will.
You also need to consider any particular issues relating to your beneficiaries that need to be taken into consideration such as children with disabilities or the care for elderly parents. What about your own circumstances, do you have adequate funds to pay down debt if your partner died?
The ‘sandwich generation’ refers to people who care for their ageing parents while supporting their own children. Have you spoken to your parents about what would happen if they died or became incapacitated? Do they have a Will and have you discussed their wishes around health care; where they live; who should make financial and legal decisions for them and what kind of life-saving measures they desire – these are all topics that should be gently raised.
While your children may be grown, you may still be supporting them financially (university, weddings, first homes). You may also be taking on more care of elderly parents. Estate planning becomes very important at this stage as you manage your current responsibilities but also prepare for the future.
Your Will also needs to be updated if the executor named in your Will has become ill, died or can no longer handle the responsibility.
You may need to update your Will if there’s been a death of a family member or beneficiary. You also need to ensure that you have left your estate to your children in a manner that will provide them with ongoing tax benefits as well as protect their inheritance from relationship breakdown and bankruptcy. Have you adequately provided for grandchildren?
Is your Will up to date and appropriate for the circumstances of your beneficiaries? Have your children remarried, divorced or do they have blended families? Legacies also change over time and some may have devalued, you may have bought or sold assets. Are the details in your estate still up-to-date?
Do you have a valid Enduring Power of Attorney to cover you if you lost capacity? Have you reviewed your superannuation arrangements and determined how much tax would be levied on your super if you died and it passed to your adult children. 16.5% in death benefit taxes are levied on the taxable component of superannuation passing to adult children. There are strategies that can be implemented after the age of sixty to reduce these.
Have you considered who should make decisions on your behalf if you lost capacity? Do you want to be kept alive on life support or authorise someone to refuse medical treatment or turn off life support?
You should review your Will regularly, every five years or whenever there are significant changes to your circumstances.
Sandwiched between the needs of elderly parents and dependent children, there’s a growing demographic facing a time when their parents and children will need them simultaneously.
The combination of an ageing population, delayed parenting and grown children staying at home longer has practical, financial and emotional consequences for those caught in the middle.
While there isn’t a one size fits all approach, there are three conversations that every family should have to help them deal with changes and avoid feeling overwhelmed.
The first conversation to have is all about ‘what ifs’ and it’s much easier to have this conversation before there’s a problem and there’s time to plan. It’s important to be clear about what you think and feel before initiating the conversation. Hidden fears and concerns can derail the conversation quickly if you’re not aware of them. The overarching principle of ‘treat others as you wish to be treated’ should be applied in every family conversation. As parents become infirm there may be a tendency to make decisions for them rather than with them. Scenarios around health care; their wishes around where they live; who should make financial and legal decisions for them and what kind of life-saving measures they desire – these are all topics that should be gently raised.
It’s important to make sure that all legal documents are up to date – do they have an up-to-date Will and appropriate Power of Attorney? People don’t always file things in easy-to-find places, so do you know where to find copies of these documents as well as other important information about their financial affairs such as bank accounts and tax information? Does the Power of Attorney deal with the person’s wishes when it comes to life-sustaining measures? During periods of high stress being clear about an elderly parent’s wishes can provide guidance for the whole family especially when a number of siblings are involved.
Just like in the case of an airline emergency, you are useless to your children and your parents if you don’t take care of yourself first. So, make sure your own house is in order. Are your own documents up-to-date should anything happen to you? Do you have a savings buffer in case you need to take time off work to care for elderly parents? How can you preserve your own assets for as long as possible and save towards your own retirement?