Disability, Enduring Documents, Wills and Estates

Last updated 15 February 2019

A person with a disability, like anyone else in the community, can make an enduring document or a will as long as they have the capacity to do so.

Enduring powers of attorney and advance health directives

Enduring documents appoint decision-making authority to others when a person has been deemed to lack capacity or, at other times, for financial matters dependent on the content of the document. Decision makers are to ‘stand in the shoes’ of the person and make decisions the person would have made for themselves if they had capacity.

Enduring documents cease to have any standing at the death of the person.

Enduring documents provide direction or appoint decision makers to deal with a person’s personal matters and their property, to ensure the person’s views and wishes remain paramount to decision makers, and health and service providers, and to try and avoid the need to engage with the Queensland Civil and Administrative Tribunal (QCAT).

Capacity to make an enduring document

To make an enduring document, a person must be 18 years of age and must have the requisite capacity at the time of completing the document to understand the nature and effect of the document and the power it provides to the attorney(s). The person must make the document freely and voluntarily. A disability or diagnosis, including cognitive impairment, does not automatically preclude a person from having capacity to complete enduring documents.

If a person does not have the requisite capacity to complete an enduring document, but there is a need for a formal decision maker, any interested party can commence an application to QCAT. The tribunal may appoint any willing adult(s), provided they have made the relevant application, or statutory decision maker(s) they believe appropriate and necessary.

Choosing Attorneys

A person should appoint attorneys whom they can trust to carry out their wishes regarding their personal and financial matters. Attorneys under an enduring document have fiduciary obligations and must always put the person’s interests ahead of their own.

It is common to appoint more than one attorney, and people should consider structuring the document to provide them a safety net. For example, a person may choose to appoint their adult children as attorneys, who will also be beneficiaries under the person’s will. This may lead to a conflict of interest in decision making and should be considered. The person may then consider appointing a willing combination of family, friends and professionals such as accountants and solicitors. Importantly it should be a small group that can cooperate.

Hierarchy of enduring documents

There are three enduring documents in Queensland:

Advance Health Directive (AHD)—only relates to health care (not including accommodation, finances or other personal decisions). Provides consent and refusal for healthcare and may also appoint attorneys for health decisions
Advance Health Directive – Mental Health (AHD MH)—only relates to health care and specifically addresses mental health care and treatment options. Provides consent and refusal for treatments and may also appoint attorneys for health decisions
Enduring Power of Attorney (EPA) – may relate to all personal and financial matters. The person can specify relevant areas and place restrictions on decisions and decision makers.

Given the complexity, specific content and thought required, legislation deems the AHD as the highest ranked document for health care decisions, regardless of dates of completion. Where the person has a mental health history and has completed an AHD MH, this document is seen as the highest rank for their mental health care and can provide consent for treatment in accordance with the Mental Health Act 2016 (Qld).

Validity of enduring documents

When witnessing an enduring document, it is recommended to follow the Witnessing Guidelines provided on the Office of the Public Guardian. These involve:

asking open questions
interviewing the person alone
taking detailed notes
considering a health professional’s view of capacity
querying the timeliness of the document.

If there is concern about the person’s capacity to have completed the document, or the actions of any attorneys, an application can be brought to QCAT, by any interested party, to seek determination. If QCAT finds the person did not have capacity and requires decision makers, they may appoint financial administrators or guardians for any relevant matters.

For more information see Guardianship and Administration Act 2000 (Qld) and Powers of Attorney Act 1997 (Qld).

Capacity to make a will

To make a will, a person must be of sound mind, memory and understanding. They cannot be delusional in a way that impacts decisions about disposing of the estate. This is described as having testamentary capacity and means that they must understand:

that a will is a document saying what is going to happen to their property when they die
the amount and type of property they have
who has a reasonable claim on their property.

If a person with a disability has this level of understanding, they are entitled to make a will.

Precautions when making a will

If there is any likelihood a person’s capacity to make a will may be challenged after their death, it is wise to take precautions to protect the validity of the will. For example it may be advantageous:

to use a witness who can attest to the person’s capacity. The witness could be a doctor, psychologist or psychiatrist who could sign a statement that they were satisfied that the testator had testamentary capacity, and knew and approved of the contents of the will
to draft the will in plain, clear language so that the testator understands it; however, they do not need to understand all of the legal terms
to use a solicitor experienced in will making and working with people with disabilities. The solicitor should keep detailed notes of the circumstances and state of mind of the testator at the time of making the will.

Knowing and approving a will

A person making the will must know and approve its contents.

Persons without testamentary capacity

A person can apply to the Supreme Court for an order that provides the authority to draft, amend or revoke a will on behalf of a person who does not have testamentary capacity (see ss 21–28 Succession Act 1981 (Qld)). The court may only make the order if:

the person in relation to whom the order is sought lacks testamentary capacity
the person is alive when the order is made
the court has approved the proposed will, alteration or revocation (s 21).

Providing for a person with a disability in a will

When a parent fails to provide adequately for their child in their will, that child is able to make a family provisions application (see the chapter on Wills and Estates). When providing for a person with a disability in a will, it is important to consider the age of that person, their future needs and their ability to manage finances.

An intended beneficiary who is over the age of 18 and capable of managing property can be left property outright in a will—this is described as a direct gift.

If a direct gift is left to a person who lacks capacity to manage it, the executor may encounter difficulties when trying to administer the estate. If an intended beneficiary is not able to manage property due to their disability or their age, it may be left to them in a trust. The trust can be established in the will. This type of trust is described as a testamentary trust.

It is not wise to leave the share of the estate intended for the person with a disability to another family member on the understanding that they will provide for the person with a disability. It immediately places the family member in a position that may give rise to a conflict of interest.

What is a trust?

A trust is a concept by which property is transferred and managed by a person for the benefit of another person (called a beneficiary). Two main types of trusts are generally used—fixed trusts and discretionary trusts.

Fixed trusts

Fixed trusts clearly state the dollar amount or share of the property to be distributed to the beneficiary. For example, the trustee may be required to distribute $10 000 annually to the beneficiary. A fixed trust does not allow the trustee to use their discretion to respond to changing circumstances and needs of the beneficiary.

Discretionary trusts

The discretionary trust is a flexible way of making provisions for a person with a disability. A discretionary trust allows the trustee to respond to needs of the beneficiary as they arise. For example, under a discretionary trust, the trustee may be directed to invest the capital and then to use the income from investing for the benefit of the person with a disability. Alternatively, the trustee may have an absolute discretion to use both the income and the capital in the interests of the beneficiary.

A disadvantage of the discretionary trust is that it may be more difficult to hold the trustee accountable for the way in which they use the money generated from the trust.

It is important to note that assets and money held in a trust for the benefit of a person with a disability are considered to be assets for the purpose of determining a person’s entitlement to the disability support pension and public housing. If a person with a disability will be relying on the disability support pension and/or public housing, and they will receive a benefit from a will, it is important to get legal and accounting advice to ensure that these entitlements are managed.

One option is to consider establishing a Special Disability Trust. These are special trusts that have been designed to enable people with ‘severe disability’ (the characteristics outlined in s 1209M of the Social Security Act 1991 (Cth)) to benefit from funds that are not taken into consideration when determining that person’s entitlement to the pension and/or housing. More information about special disability trusts is available from the Australian Government Department of Social Services.

The duties and powers of trustees

In addition to the duties and powers stipulated in a will, a trustee also has certain powers and duties laid down by law (for further information see the chapter on Wills and Estates).

Restrictions upon trustees

One method of placing some restrictions upon the way a trustee exercises their discretion is to require the trustee to administer the trust fund in accordance with certain stated principles. If the trustee fails to exercise their discretion in accordance with the expressed principles of the trust, the beneficiary may seek to have the trustee’s acts and decisions reviewed by the Supreme Court under the Trusts Act 1973 (Qld).

It can also be useful to include a memorandum of wishes in a trust deed. The memorandum of wishes is not binding on the trustee, but is a way for a testator to spell out to the trustee their wishes for the management of the trust fund. This is like a personal brief to the trustee expressing the subjective aspects of the management of the trust fund that cannot be included in the trust deed itself.

Choosing a trustee

It is common to appoint more than one trustee and to appoint the same people appointed as executors in a will. A testator should appoint trustees whom they can trust to carry out their wishes regarding the child with a disability. At least one trustee should be skilled in financial and property management or able to seek appropriate professional advice.

Professional trustees

Parents of people with a disability can appoint private trustee companies, the Public Trustee (a government organisation providing trustee services) or private individuals as trustees.

Other children as trustees

Parents sometimes consider appointing one or more of their other children to act as trustee for the child with a disability. If those other children are residuary beneficiaries (i.e. they take the property that is left over when the person dies) there may be a conflict between their own interests and that of their sibling. Such potential conflict may be avoided by appointing more than one trustee (e.g. one trustee who is a child and one who is not), so that any conflict of interest one trustee may have can be guarded against by the co-trustee.

Providing for children with a disability under 18 years of age

When making provisions in a will for a child with a disability under the age of 18, two aspects of the child’s needs must be considered—guardianship (personal welfare) and financial provision.

Testamentary guardian

A testamentary guardian may be appointed by the parents in a will to take over the parents’ role as guardians of their children after they die. A testamentary guardian has all the powers, rights and responsibilities for making decisions about the long-term care, welfare and development of the child that are ordinarily vested in a guardian such as education or religion. The testamentary guardian’s powers only apply until the child reaches the age of 18 (pt 5A Succession Act 1981 (Qld)). It is important that consideration is given to making an appointment that is in the best interest of the child to avoid disputes about the appointment.