Advance Care Directives in practice

Mr A (“A”) was a patient admitted to the emergency department of a hospital, suffering from septic shock and respiratory failure. Although all appropriate treatment had been given to A, his condition deteriorated, he developed renal failure and was being kept alive by mechanical ventilation and kidney dialysis.

At this stage the hospital became aware that a year before his admission A, had a solicitor prepare an appointment of enduring guardianship directing his guardians to

“refuse consent for a TRANSFUSION of whole blood, red cells, white cells, platelets, or blood plasma to be given to me under any circumstances”

On a separate worksheet completed in his handwriting A indicated that he did not wish to have dialysis. A’s solicitor told the Court that when he prepared the document he explained the risks of refusing a blood transfusion to A but not the risk of refusing dialysis.

The hospital sought a Court declarations to the effect that the document was a valid “Advance Care Directive” and that it would be justified in complying with his wishes expressed in that directive. The Court considered that in making the decision to refuse dialysis A had legal capacity and it was clearly his own voluntary decision, therefore the hospital could not administer dialysis to A.

Mr A was unconscious and unable to give instructions as to his medical care therefore the hospital took steps to preserve his life whilst seeking the Court’s decision. The Court made orders recognising A’s right to refuse dialysis treatment as set out in the worksheet even though medical evidence suggested it would hasten A’s death.

If A had not completed the Advance Care Directive it would have been difficult for the hospital to follow A’s wishes. An Advance care directive is an important part of planning for your future and should be discussed with your loved ones at the time it is prepared.

Living WIlls – what are they?

An “Advance Care Directive” (also referred to as a Living Will) is a document stating the specific medical treatment that the patient does or does not wish to receive. In order to make an Advance Care Directive a person must have legal capacity, and the document must set out the medical treatment that they want to receive  in a clear and unambiguous way

All jurisdictions in Australia have enacted legislation enabling a person to register a refusal to accept medical treatment or appoint another person to carry out their wishes.

Advance Care Directives enable you to set out the medical care you wish to receive when medical technology might be required to keep you alive. Importantly as you may lack the capacity to make decisions about your medical treatment the person or persons you appoint as substitute decision-makers, family members and significant others must be informed of your medical wishes.

In the absence of an advance care directive consent for medical treatment must be considered on a case by case basis and may be given by:

the patient if they have legal capacity;

the patient’s guardian;

the spouse of the patient (if they have capacity),

by the patient’s carer;

or by a close friend or relative of the patient.

A persons capacity to make health care decisions, must be carefully considered as what appears to be valid consent given by a capable adult may be the result of undue influence, or of some other circumstance.

As consent for treatment is considered on a case-by-case basis if an unconscious patient presents at a hospital, and it is not practicable to obtain the consent of the next of Kin, or there is no record that the patient does not wish the treatment to be carried out they may be administered emergency medical treatment that is reasonably necessary.

In most circumstances it would be assault to administer medical treatment prohibited by the advance care directive.

In order to create an Advance Care Directive a person needs to carefully consider their wishes, and preferences for future health care, end of life, and the appointment one or more Substitute Decision-Makers to make these decisions if you are unable to do so yourself.

Khloe Kardashian, health care proxy for Lamar Odom?

In September 2009, Lamar Odom married Khloé Kardashian. As is usual with the Kardashian family their wedding was featured on Keeping Up with the Kardashians, a reality show featuring members of the Kardashian family. During the course of their marriage Odom also featured on the show and a spin off program. He became a household name to those unfamiliar with his basketball career.

In December 2012, Kardashian filed for divorce from Odom, both parties signed papers in July 2015 pending final approval from a judge. On October 13, 2015, Odom was hospitalized after being discovered unconscious. He was in a coma and placed on life support. It was reported that Kardashian was making the healthcare decisions on his behalf. In the aftermath of this accident, Odom and Kardashian have decided to call off their divorce.

In the US a wife is the most common person named as a health care proxy to make health care decisions for their spouse in the event that they can no longer make those decisions themselves. If Odom did not change his health care proxy, or the power was drafted so that it did not terminate at the time the divorce papers were filed Kardashian may retain the power, to make any decisions about his care whilst he is unconscious or lacks the capacity to make them himself.

In Australia each State and Territory has provision for people to create an Advance Care Directive (ACD) also referred to as a living will. An Advance Care Directive is a written document enabling a competent adult to nominate the equivalent of a health care proxy, to record preferences for future health and personal care, or both.

In Odoms case athough the divorce hadn’t been approved by the Courts it raises questions regarding an ex spouses right to their ex-spouses estate in the event of their death.

In California, once divorce proceedings are filed the parties are restrained from taking actions during the divorce proceeding altering the designation of beneficiaries and other specified actions therefore their estate passes according to their Will. If a party dies after the dissolution of the marriage transfers to the ex spouse are terminated but not life insurance. It was reported that Kardashian remains the beneficiary of a $10 million life insurance policy in Odom’s name even after their divorce is finalized.

In most jurisdictions in Australia, certain provisions contained in the Will  are revoked by the divorce or annulment of the marriage, and legislation treats the spouse as if they predeceased the Will maker. However in Tasmania and Western Australia the entire Will is revoked by divorce.

The best way to ensure your estate is directed the way that you wish it to be after a divorce is to make a new will. In the same way as marriage and the birth of a child, a relationship break down is a life event that calls for a new Will in order that your estate is directed the way that you wish in the event that you die.

Pride & Prejudice & Entailed land

An entail or “fee tail” operates like a will that sets up a primogeniture system for real estate. Entail restricts the sale or inheritance of an estate and prevents the property from being sold, or left by will, to anyone other than a pre-determined heir. The primogeniture system, meant the eldest son inherits the title, even if he had an older sister. Daughters couldn’t inherit their father’s title even if they had no brothers, and daughters’ sons and grandsons couldn’t inherit. The title had to pass to and through legitimate sons.  Although a work of fiction Pride and Prejudice illustrates the problems that can arise through the entailing of property if there is no male heir.

Entailing property was an attempt to maintain the high social status of a family. A lord or other landholder left his house and land to his son “and the male heirs of his body”, ensuring that a single male descendant received the family’s real estate. Where the family has a noble title, the entail follows the title, so the same man gets the real estate and the title.

In Pride and Prejudice Mr. Bennet, the father of protagonist Elizabeth Bennet, had only a life interest in Longbourn, the family’s home and principal source of income. As the property was entailed Mr Bennet had no power to sell it or gift it through his will as it was to be inherited by the next male heir.

If Mr. & Mrs Bennet had a son Longbourn would have passed to him, but it could not pass to any of his five daughters. Instead, Mr Bennet’s cousin Mr Collins as the next nearest male heir would inherit the property. Upon Mr Bennet’s death Mrs Bennet would get a life interest in the estate but the five Bennet daughters, would lose their home and income. In the novel Mrs Bennet is motivated by the desire to arrange a good marriage for each of her daughters to ensure their financial security.

Jane Austen’s brother Edward, had inherited entailed estates from Thomas and Catherine Knight, distant cousins of their father under the will of Elizabeth Knight, who died in 1737. When Thomas Knight died in 1794 he left the estate to his wife for her life, who subsequently moved away before her death and gave up the estates to Edward. Catherine Knight’s will stipulated that Edward change his legal name to Knight which he did in 1812.

In the UK fee tail was abolished in 1925, however some land could still be entailed if they were created under a Will made prior to this date, however as of 1996 no new fee tails can be created.

Kurt Cobain and the perils of Intestacy

When Kurt Cobain, front man of Nirvana, died following a shotgun blast to his head, at age 27, he left behind a Widow and small child but no Will.

A Will would have named an executor who could exercise control over his estate, however the laws of intestacy meant that Cobain’s widow, Courtney Love, with a well documented history of mental health problems and well publicized struggles with addiction, gained the right to manage his estate including rights to his image, publishing and licensing rights, and performance royalties.

It has been reported that Cobain contacted a lawyer before he died to draft a Will excluding Love as he was contemplating divorcing her, as a Will wasn’t drafted the distribution and management of his estate was exposed to difficulties.

In 1997, Love and former Nirvana members, Dave Grohl and Krist Novoselic, formed a company to manage all Nirvana-related projects.  Love later commenced proceedings to have the company wound up alleging that she had received bad advice when signing the deal. Grohl and Novoselic, sought Love’s removal from the Company on the grounds that she lacked the capacity to run it properly, and sought a court ordered psychiatric examination of her. The matter was finally settled in 2002.

This didn’t stop Love from bringing further lawsuits alleging that the managers of Cobain‘s estate had stolen $30 million in cash and $500 million in real estate holdings. When the lawsuit fizzled out she accused her lawyer of being bought off by those who she alleged committed the fraud.

In 2009, Cobain’s daughter Frances went to court for a restraining order against her mother.  Love lost custody of her daughter as well as control of a trust fund that had been set up through Kurt Cobain’s estate for Frances’ benefit. Frances reportedly inherited 37% of her father’s estate when she turned 18, and is still estranged from Love.

Love says the legal action cost her $27 million, and she ended up selling her 25% share of Nirvana’s publishing rights in 2006, for $50 million, and control of Cobain’s image and licensing rights, in exchange for a further loan in 2009.  The Estate is worth has an estimated $450 million with Cobain’s image, publicity rights, and songs producing valuable income stream for Love and Frances Cobain.

The important lesson from this unfortunate series of events is that in not having a Will Kurt Cobain was unable to protect his family and legacy. Although we have discussed some high profile intestacies, your legacy and estate are important to your loved ones so in order to reduce the difficulty your family members will face when you die it’s important to plan for your financial future and make and regularly update a Will.

Going to the Dogs? – Animals as beneficiaries part II

Some people don’t like the expression “crazy cat lady” as there is not an equivalent masculine epithet but as was previously discussed there are people who are very attached to their animal companions, and as with many things if people wish to leave money to their pets the richer they are, the more outlandish it seems.

“Gunther IV the Alsatian” has been referred to as the richest dog in the world with a net worth of over $ 370 million. It appears that the he inherited this fortune from his father Gunther III , who was the favourite pet, and sole beneficiary, of German countess and multi-millionaire Karlotta Liebenstein.

Gunther IV has expensive tastes; he eats steak and caviar, has a personal maid and butler, a chauffeur driven limousine and frequently relaxes beside a customized swimming pool at one of his homes.

The reality is that Gunther IV’s wealth is controlled by a trust. Establishing a trust enables individuals to direct money for the care of their animals (or other things) after they die. A trustee controls the money and makes decisions as to what is to be paid for; a caretaker looks after the pet and asks the trustee to pay for the bills and related expenses; the Court makes sure that the trustee and caretaker are acting in the interests of the beneficiary and not using the funds for their own benefit.

A trust usually details what should happen once a pet dies, usually whatever money left over is distributed to named individuals or a charity, or if beneficiaries are not named absorbed back into the estate.

One disadvantage of a trust could be  an unscrupulous caretaker, who has devoted themselves to taking care of a pet, (and has no other source of income once the animal passes away) acting to obtain an animal that looks similar to the one that has died so the trust is frittered away on the care of a line of imposter animals.

However if a trust was not established for the benefit of Gunther III and his progeny, the wishes of Countess Libenstein may not have been carried out – therefore if you want to make sure your wishes are known and followed after your death make a Will.

Retirement planning, Superannuation and Singles

As we have discussed before, today is always the right time to start planning for your future. It is often said that young singles are least likely to consider life insurance, income protection and totally and permanently incapacitated cover (TPD). Although income protection may be of limited value to young singles, life insurance and TPD should be considered, in order to provide a financial safety net if you are unable to work due to accident or illness. Taking out life insurance and fixing premium payments when you are younger could be cost effective in the long run.

Young singles often have high disposable incomes; however being single in retirement can be a financial challenge especially for women who have lower average superannuation balances than men. Currently the average super balance for people aged 60 to 65, is about $94,000 for women and $114,000 for men. The Australian Financial Security Authority Retirement Standard, states that singles who own their own home need retirement income of $42,433 a year to live comfortably.

If you take action early – even making voluntary contributions to your superannuation fund over the course of your working life can make a big difference in the amount of superannuation you could have when you retire.

As with many things the only certainty in life is change, currently savings held as superannuation attract favourable tax concessions, this might not always be the case, and so it is important that your financial plan takes this into account. Similarly you may currently be married or in a long term relationship but should consider what could happen if your relationship was to break down or your partner was to die.

Your pet as a beneficiary, not as strange as you might think.

As we often explain you can do with your estate what ever you wish however if you do not make a valid will your wishes may not be complied with.

When Maria Assunta, the widow of a property tycoon who had no children or living relatives died at the age of 94, she left her entire estate worth approximately $13million, to Tommaso, a 4-year-old former stray cat from Rome, to be distributed via her former nurse, Stefania.

When drafting her will Assunta searched for an animal welfare association to care for Tommaso, but none met her strict set of standards. So instead, she settled on Stefania to be the cat’s provider. Assunta’s concern was that Tommaso should be “loved and cuddled.”

Tommaso now lives with Stefania and another cat in a house outside of Rome. Assunta had become very fond of Stefania and was convinced that she was the right person to carry out her wishes.

Interestingly Tommaso is the third most wealthy animal on the planet preceded by Kalu the chimp, who was left $80 million and Gunther IV, who inherited $372 million from his “dogfather” Gunther III— yes, a dog — who was the companion of an animal loving German countess.

So if you are a person who is concerned about the welfare of your animals it is important to discuss this when making a will so that there is adequate provision for your pets after you die

Single, and think you don’t need a will..better rethink that.

It has been reported that the largest type of family unit in Australia is a single person living alone.

If you don’t have children or obvious heirs, documenting your wishes and making them accessible will help ensure those wishes are fulfilled should something happen to you.In some circumstances people without children need to plan more carefully as their will can easily be overlooked.

Regardless of what you intend to do with your estate be it leaving money to charity, a pet, or friends and relatives means you should prepare a Will, as a minimum. It is never too early to prepare documents such as; a health care directive (often referred to as a living will); organ donation authority; or to arrange insurance cover for loss of income or permanent disability.

It is important that you discuss your wishes with someone in order that they are able to act on your behalf in the event of an emergency. This requires you to identify the person in your life that you can trust to make medical decisions for you in the event that you lack the mental or physical capacity. (Remember that person may not seem the most obvious to be making decisions in the event of an emergency.)

Importantly regardless of what you wish to do with your estate it is important to formulate a plan and communicate it to those closest to you  in order that your wishes are met.

The Future is a lot like today – so plan for it now

Everyday when you go to work, meet a friend, or go to the shops you create a plan.

It could be rudimentary or require managing a number of interconnecting bus routes or several different road routes depending upon the traffic conditions.

I know that we don’t like thinking about it but you will die some day so it is important to take some time to plan about what happens to your assets when that happens and to formalise this by making a Will.

Unfortunately people seem not to plan for certainties like retirement or death as it often seems that they occur some time in the distant future. So we tend to meander through our days in in an oblivious haze.

Remember the future for good or ill happens whether we want it to or not.

We insure our physical assets such as a car or house but think little about protecting our future income through superannuation and insurance.

In Australia superannuation is compulsory however most of us are only vaguely aware about how it operates even though it will provide a large portion of our retirement income. In fact currently your superannuation death benefit could be the largest asset that you have.

Currently employers are required to pay a proportion on top of an employee’s salaries and wages into a superannuation fund, however you can further supplement this amount through voluntary contributions to your superannuation. You can also direct your superannuation to a fund that invests in products and services that reflect your values.

Similarly if you were to get sick how would you pay the monthly bills? These are some of the things to ask yourself when planning for your future.Income Protection usually provides up to 75% of your gross income if you are unable to work due to illness or injury. Income protection premiums are usually tax deductible.Life insurance pays a designated beneficiary a sum of money upon the death of the insured person.

Protecting your salary through income protection insurance and taking out life insurance to provide for your family in the event of sickness or death are important things to discuss as when planning for your future. So stop meandering through your days in  an oblivious haze and get planning.