Trusts

People establish Trusts for a variety of reasons, but with older people the more common reasons are to:

• Establish financial resources for family members, especially for those who cannot easily do so themselves, or for those with a disability
• To protect assets in the event of an older person requiring residential care
• Organise your personal financial affairs
• Provide a form of protection for various beneficiaries
• Protection of assets against creditors
• Establish a Trust for charitable purposes

In any event people should consult their solicitor or one of the Trustee companies (e.g. Public Trust, Perpetual Trustee,Trustees Executors etc.), to establish a Trust. One of the commonly asked questions, is how to protect assets in case a person is likely to face residential care, and be required to pay fees privately until the reach the asset level for Residential Subsidy.

In these cases, assets such as a house is gifted to a family Trust over a period of years. Usually the maximum gifted per year is $27,000, as gifts above this figure incur gift duty.When property is owned jointly, each owner could gift $27,000 per year, making a total of $54,000 each year. Bearing in mind that WINZ will only permit  gifting of $5,000 per person per year in the five years preceding qualification for residential subsidy, it follows that the bulk of gifting has to be achieved beforehand.

A Trust can be thought of as a separate legal entity, in the same way as an individual person or a company. Some Trusts are set up by way of stipulating the establishment of a Trust in a Will. In these cases the Trust does not come into being until the person dies and the estate is wound up. In all Trusts there needs to be a trustee who has responsibility for the Trust property.This will normally include such things as land,stocks and shares, etc.The beneficiary or beneficiaries need to be stipulated in the Trust Deed and the Trustee has the duty of ensuring that the beneficiaries benefit in the way prescribed in the Trust.

Charitable Trusts are created for a variety of reasons, to establish scholarships, to benefit individuals in special circumstances, to further the work of social agencies, etc.

Power of Attorney
(Not to be confused with EPA)

When someone may direct another person to act for them in getting money from the bank etc. (e.g. to be fully cognitively aware but not physically able to do the task).

Enduring Power of Attorney

An Enduring Power of Attorney (or EPA) is an authority given to a person to look after another person's affairs. An Enduring Power of Attorney will continue to be valid even if the person who made it loses their legal capacity to make decisions.

If someone has a serious stroke, develops dementia or has some other condition which prevents them from making decisions the EPA can take effect.

There are two sections to the Enduring Power of Attorney: the first deals with a person's property (e.g. money, investments, land and buildings, etc.) and the second covers personal care and welfare. In the first type a person can choose when the EPA can come into effect, e.g. before they become incapacitated, afterwards or both. (Note: this type of EPA can be invested in more than one person). With the second type (i.e.for personal care and welfare), the EPA only takes effect after the person becomes incapacitated. Only one person can have this type of EPA.

Making The Right Choice

People are at liberty to choose whoever they wish to be their Enduring Power of Attorney (or EPA), obviously then need to trust that person or persons implicitly and be satisfied that the decisions made would be in their best interests. In relation to the first type (property) the EPA could be given to a family members,friend, lawyer, trustee company etc. A combination of function is possible, but those concerned should have full knowledge of a person's assets (especially bank accounts, property, investments, insurance and superannuation policies,
jewellery etc.).

The EPA for personal care and welfare can be held by a person who also holds the property EPA but in may cases a separate person is appointed.This EPA only comes into effect when the person giving it becomes "legally incapable"of making decisions.
If people do not have enduring power of attorney, and become incapable of making decisions,the process of then appointing EPA is very expensive and time consuming. Applications need to be made to the Family Court under the"Protection of Personal and Property Rights Act (1988)"and if the court is satisfied that the criteria are met, can then appoint an Enduring Power of Attorney.

Trust companies such as Public Trust, Perpetual Trust,Trustees Executors etc. and all solicitor firms can draw up papers of EPA. Costs vary, in general the charges will be around $100, but can be less if the application is made in conjunction with other work.

In cases where elderly people can not easily get into town,Trustee officers or Solicitors may arrange for EPA papers to be signed in the home. Signatures need to be witnessed by an independent person, and the attorney's signature must also be witnessed.The attorney must be at least 20 years old.

For lastest information on EPAs click here.

Living Wills

A "Living Will" is a statement of how people wish to be cared for while they are still alive. Living Wills have no legal basis in this country, but can guide family members, carers and staff of Homes or Hospitals.

Ideally people should establish Enduring Power of Attorney and make their wishes known to the attorney/attorneys who have "personal care and welfare" responsibilities.

Living Wills usually contain directions for medical decisions and procedures, often they will contain reference to wishes for resuscitation in case of severe injury illness or disability and may contain instructions on care in the last days of life.

Living Wills need to be made while a person is still "legally capable" so a solicitor or trustee can verify a person's competency.
Some Rest Homes and long stay Hospitals will ask for a person's instructions when they become a resident.

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There are various ways to save electricity costs. Contact your local electricity provider for ways to save on your power bill.

Hot Water Cylinder Covers

Some older people still prefer to have a warm airing cupboard by having poorly lagged cylinders and pipes.This method is extremely expensive, as it would be considerably cheaper to use a clothes dryer. Hot water cylinder covers can significantly reduce electricity costs on some cases.They cost $88 approximately and can be easily installed. Contact your local plumbing supplier.

Heating in the Home

Heating costs will usually be the biggest part of an electricity account in winter time. Nitestore heaters are no longer as economical as they used to be.
Oil filled heaters are safe, but are not economical if left on for 24 hours, and often their electricity usage is not too dissimilar from other appliances.

A good fan heater or radiant heater often provides a good source of heat if used wisely.

Some tips for heating:

• Only heat the rooms that need to be heated
• Ensure all draughts from doors, windows etc. - are stopped up
• Insulate the ceiling areas
• Operate heaters from a thermostat mounted on the wall.

Yes - it is a sad fact of life that some local neighbourhood banks and post offices have closed, as many older people used these places as points of community contact.The good news is that modern banking methods allow people to undertake much of their banking from home, by simply using a normal touch tone phone, or by having regular accounts paid by automatic payments.There are however larger numbers of older people who still withdraw large amounts of cash from a teller, and then set off around town paying bills. Not only can this practise be risky - it is unnecessary.

All the major banks have phone banking systems that eliminate paying bills by cash. Regular accounts such as telephone, power, rates, rent, insurance can all be paid by automatic payments, and some companies offer a small discount if you do so!

Automatic Teller Machines (ATM's) are very common these days, although some older people are still apprehensive about using them. If people are concerned about using a machine in a very public place, there are some banks which have ATM's inside their premises.

Telebanking is one of the most common ways of banking these days. All the systems give you a Registration number and you choose a PIN (personal identification number).Once the number is called a voice prompt guides you through the various steps.These systems allow you to find out how much money is in various accounts, check out the last transactions, pay bills, or statements or cheque books, or transfer money between accounts.

A Customer Services Officer is available through the Banks Telephone Banking system. All systems offer friendly advice, and guide you through the various systems.

One of the concerns older people have, is actually getting out"cash".Of course with the prudent use of cheques, telebanking, as well as Eftpos cards, there is a reduced need for actual cash. Although there is a small charge associated with Eftpos transactions, they still offer a sensible method of paying for goods and services. Most larger retailers will offer additional cash when a purchase is made and this is a sensible idea as it reduces the number of transactions.

There are significant numbers of older people who do not have Eftpos cards.They believe that they cannot cope with the technology and would be put into an embarrassing situation in shops etc. However the experience is that the vast majority of older people can handle Eftpos transactions well. It is suggested that a relative or friend familiarise you with the actual steps. Once Eftpos transactions and ATM machines are used a few times they simply become "second nature"to use.

Paying for groceries and provisions can present a problem for older people who are not able to get out of the home. Many people use Home Support worker to accompany them to buy groceries etc. but payment presents an issue. Although the traditional corner store may still operate an "account" system, those shops are more expensive than supermarkets. Some supermarkets operate a customer care system which allows a relative or carer to sign a cheque for items. Once the system is set up with the supermarkets customer service officer they appear to operate well.

It is not a good idea to give an Eftpos card with the pin number to anyone. In cases where cash is given to a Home Support worker to purchase items - it is always good practise to keep a notebook and record the actual transactions.

Some Home Support agencies have specific policies like this one which need to be followed in all instances. Although many older people say they can totally trust their worker, such a system provides safeguards for both parties.

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