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Dementia and Head Traumas are becoming a more common part of Australian life

So what happens if you lose the mental capacity to make your own medical decisions? 

Who is legally empowered to make those on your behalf, and what happens if you haven't got the required legal documents in place should that occur?

Thankfully there is a process where you can decide ahead of time who you want to make significant medical decisions for you, should that ever need to occur.

But like all important decisions, you need to make them well before you need them.

Read in this article

What happens if you lose your mental capacity to make your own decisions?

Losing the legal capacity to make informed decisions about your own medical future is described as a ‘loss of capacity’ and is a growing fear for over a million Australians living with a dementia-related illness.

Common causes that can lead to loss of mental capacity

It’s estimated almost half a million Australians are living with Dementia and these numbers are expected to continue to rise. But aside from Dementia, there are many other reasons why you may lose the capacity to make decisions for yourself.

  • Stroke, seizures, head traumas and traumatic brain injury (sometimes called acquired brain injury, or “ABI) can all unexpectantly leave a person unable to make their own decisions. 
  • Add to this list, car accidents, workplace injuries, and even unexpected sporting injuries, and the chances of someone needing to rely on another is higher than many people like to think.

Pro Tip: Did you know Crisis & Medical Trauma Insurance can cover Advanced Dementia as an insurable condition?

Acquired Brain Injury

Brain injury in Australia is common and according to the ABS, with over 700,000 Australians have a brain injury, with daily “activity limitations” and “participation restrictions”. 

  • Three in every four of these people are aged 65 or under.
  • As many as two out of every three acquired their brain injury before the age of 25.
  • Three-quarters of people with a brain injury are men.

Traumatic brain injury can have wide-ranging physical and psychological effects. Some signs or symptoms may appear immediately after the traumatic event, while others may appear days or weeks later. Either way, losing the capacity to make key medical decisions yourself will have serious ongoing implications we can all take steps to be better prepared for.

How to choose Who decides for You, if you no longer can

If you want to choose who makes decisions for you regarding your finances, property, lifestyle, and medical treatment, you will need to have the necessary legal documents in place, signed and safely stored) ahead of time.

While this is usually part of Modern Estate Planning, these documents can be created separately and are called:

If you don't have these documents in place ahead of time, the government’s Trustee and Guardianship Board will have a plan for you — and you probably will not like that plan. The Guardianship Division directs the decisions about adults ​who are incapable of making their own decisions, and who may now require a legally appointed substitute decision-maker.

What happens if you have a Power of Attorney and Appointment of an Enduring Guardian/Medical Treatment Decision Maker in place:

  • You decide who makes decisions about your money and lifestyle and you choose the people who care about you and respect your values.
  • You decide how your chosen attorneys and guardians act and when their powers come into effect. You can also provide directions about how they should act in end-of-life care decisions too.
  • You preserve your wealth. The government's Public Trustee and Guardian Service require payment for their services from your assets and erode any inheritance you may wish to leave to those you love.

When you choose your own attorney and guardian (unless you choose to appoint a professional attorney) you do not generally pay for acting. Taking positive action to put your estate planning affairs in order means that you get to decide who makes decisions over your life, rather than having it decided for you.

If dementia is part of your family history or you have concerns about protecting your ability to make informed medical decisions in the future, a Power of Enduring Guardianship document, as part of your estate planning, can provide significant peace of mind for you and the legal authority for a person of your choice to make decisions for you, if you no longer can?

Estate Planning Documents & Conversations with Parents | Diego's Story

Diego's case study - Estate Planning and Elderly Parents

Diego is the only son of Maria and Carlo, two fiercely (some might say, stubborn) elderly parents who live on their own and are having to face the reality of their own declining health and old age. Last Christmas, Diego's partner had a terrible time when her own father suffered a fall last, needed to move into full-time care but there were no estate planning documents in place to help with that transition.

As a result, she had to apply to the government's Guardianship Board for permission to make care-related decisions for her father. The time, cost, and interruptions took a serious emotional toll on all her family relationships.

Diego is determined not to let that same mistake happen, but he doesn't know how to raise the topic of Power of Attorney and Enduring Guardianships documents, with his parents.

Diego is a client of Sapience Financial who takes the public position of, ‘when a person turns 30 years of age they should have their own estate planning document put in place’.

  • Every ten years afterward (or as needed) they then review their planning documents and their wishes with their financial adviser.
  • This process 'normalises' the ongoing conversation about Estate Planning and the processes to get these key documents sorted.

Because Diego got his own estate planning in place first, this naturally triggered a range of non-threatening conversations with his parents about their own estate planning needs and wishes. Diego explained to his parents how estate planning is similar to creating a patchwork of interconnected people and legal documents, just in case, for the future.

  • Creating his Will made him consider the needs of his parents too, just in case.
  • Creating his Power of Attorney meant he had to consider who he wanted to make decisions for him if he was unavailable due to travel, work or health reasons.
  • Creating his Power of Enduring Guardianship meant he had to decide who he wanted to make key life and care decisions for him.

Creating his Will and naming his parents as part beneficiaries of his life Insurance policy meant there were many family discussions about what was needed, for Diego.

With the help of his Financial Advisor, Diego was able to normalise the conversations with his parents which eventually meant his mother saw the importance of protecting her family too and decided 'now was a good time' for her to get her estate planning in the place as well, too.
While Diego's father is still being ‘independent’, family conversations are now less strained and the important conversations are being had by the people now who will need to make decisions in the future.

If you have elderly parents who don't yet have their own estate planning in place, make sure you get your own backup plan in place first, so you can lead by example and understand the processes of what's needed for everyone.

Sapience has a streamlined process that provides full estate planning services and legal documentation so all our clients can get their backup plans sorted with our assistance.


author pic drew browneDrew Browne is a specialty Financial Risk Advisor working with Small Business Owners & their Families, Dual Income Professional Couples, and diverse families. He's an award-winning writer, speaker, financial adviser and business strategy mentor. His business Sapience Financial Group is committed to using business solutions for good in the community. In 2015 he was certified as a B Corp., and in 2017 was recognised in the inaugural Australian National Businesses of Tomorrow Awards. Today he advises Small Business Owners and their families, on how to protect themselves, from their businesses.  He writes for successful Small Business Owners and Industry publications. You can read his Modern Small Business Leadership Blog here. You can connect with him on LinkedIn Any information provided is general advice only and we have not considered your personal circumstances. Before making any decision on the basis of this advice you should consider if the advice is appropriate for you based on your particular circumstance.

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