'Til death - or an EPA - us do part

Notwithstanding that we live in a world of no fault divorce, most take the "for better for worse; for richer for poorer; in sickness and in health; as long as we both shall live" marriage vows seriously – and especially older people.

And, few contemplate that anyone else should has the power to "put asunder" i.e. overrule our inviolable commitment - and divorce us against our will!?! Indeed, how many have already unwittingly delegated that power to children – or somebody else's children.

For those who consider marriage sacrosanct, a recent High Court Appeal case is cause for concern. So too should be recent amendments to the Inheritance Act, which extend the definition of natural heirs to step-children and other aspiring beneficiaries.

In the days before the Family Court, blended families, superannuation, increased life expectancy and the 'me' generation, few people made it to retirement, and those that did, lived but a few years. Homes were modest, and funerals routinely wiped out meagre life savings. Hence, most natural (or unnatural) heirs inherited nothing.

Nowadays, a person approaching retirement is generally much wealthier and healthier than in the past, and they can expect to spend as many (or more) years out of the paid workforce as in it. Moreover, they are expected to self-fund their own retirement with superannuation - and to be the backbone of the volunteer workforce.

Because of the convoluted nature of 'privatised' free enterprise superannuation, most rely on professional advisers. And, as has been witnessed in recent years, it is not until the nest egg 'disappears' that victims discover they have been fleeced (compliments of a woefully under regulated industry). Additionally, those in second time around marriages will have much less squirrelled away – compliments of earlier Family Court property settlements - while those of means will have optimised the transfer of family assets to their 'natural' heirs, through the establishment of Family Trusts and the like.

Also in years gone by, very few made it to the grand old age of senility, which requiring them to have their affairs looked after by an impartial – and government funded – Public Trustee. Nowadays, our politicians have outsourced such tasks to informal (unpaid) administrators and guardians. And, with medical advances having controlled the primary killers of retirees (heart disease and cancer), many more will succumb to dementia.

Integral to retirement planning, most legal and financial advisers have strongly encouraged retirees "before losing it" to assign an informal administrator and guardian – via an Enduring Power of Attorney, Enduring Power of Guardianship and an Advanced Health Directive (if not set up a Family Trust to prevent the taxman or nursing home pillaging the estate). And, retirees are routinely discouraged from nominating their partner as attorney or guardian because (usually of a similar age) the partner is just as likely to develop dementia themselves.

Hence, those informal appointees of EPAs, EPGs and AHDs are – more often than not - junior relatives i.e. unqualified and 'unremunerated', but with a vested interest in their inheritance. Although retirees are advised to carefully consider who they will entrust to do the task (because their activities will not be scrutinised), nominators don't get to realise who can't be trusted until after their trust has been betrayed. And, it is often not the 'natural' relative who is the Judas; the instigator is often the in-law partner of the son/daughter - or nephew/niece of an affluent PANK (Professional Aunt with No Kids).

Retirees are not just at greater risk of developing dementia, but - as mentioned - may have been in more than one relationship, resulting in the once rare step-family being more commonplace. And, as anybody who has ever been in (or witnessed) such blendings, there is elevated sibling and spousal rivalry, jealousy and envy. Not only can there be rivalry among children who may have to consider sharing their perceived inheritance with someone else's kids, but also animosity toward a new step-parent who has the potential to put them all further down the inheritance pecking order. Introduce the likelihood that a new wife may be decades younger than her new partner, and all of a sudden that inheritance isn't likely to be inherited for decades – if ever.

In that regard, WA has only recently decided to change its Inheritance Act to 'bring itself into line' with other states, and to give the same legal status to step-children as to biological children. But, it's a bit ironical that WA step-children are to be treated the same as biological children when, in a recent case in the Family Court in Queensland, the Magistrate made a ruling that step children were not to call their step parents "mum" or "dad" - purportedly "to protect and recognise the unique positions of the mother and father, positions that cannot be filled by step-parents."

Surely, if it is inequitable to treat step-parents the same as biological parents (under the Family Court Act) then it is inequitable to treat step-children the same as biological children (under the Inheritance Act) - especially in a country that boasts equality of opportunity and egalitarianism?

In today's supposedly egalitarian society, unless we are disabled, we all have the capacity to make a sufficient livelihood for ourselves, so there is no justification for competent and independent adult children having any greater entitlement to inherit their parents' estates than anybody else. We allow a person who has not borne any children (such as our PM) to distribute their estate as they choose – except when they marry someone who has borne and reared (likely independent adult) children. Are we not reinforcing privilege and further entrenching disadvantage – if not discriminating against people who have had children?

Having legislated to reinforce a sense of entitlement, are we not also increasing the potential for elder abuse by natural children and step-children – which brings me back to the recent High Court Appeal.

That case – referred to as Strickland and Strickland - concerned a frail elderly couple in their 80s who had been married forty years. It was a second time round marriage for both of them, and both had adult children from prior marriages. They both owned homes until the wife moved out of her home and moved in with him.

She then sold her home and distributed the proceeds to her adult children i.e. they got an early inheritance, but his kids got nothing and would get nothing until he departed the mortal coil – assuming anything was left. His adult children had to rely on his Will naming his biological children as beneficiaries of his estate and - having made provision for his new wife to have life time tenancy of his home - they would need to wait until both departed the mortal coil.

Doubtless, had the couple chosen to separate, the Family Court could have taken into consideration the wife's non-financial contributions to the marital home – and may have ignored their informal financial undertaking made decades before the Family Court came into being. But, in this 'til death us do part' marriage, they remained together until the wife had a massive stroke and her frail husband was unable to care for her at home. She was then placed in a high care nursing home, and the husband continued to visit her and care for her to the best of his ability – including providing for all her financial needs. So what was the problem? The problem was the green eyed monster.

Some years beforehand, and doubtless based on the urgings of children (if not doctors and lawyers), the husband had given Power of Attorney to his biological son, and the wife had given Power of Attorney to her biological daughter.

After the stroke, the mother was deemed as lacking mental capacity to make decisions, and her daughter assumed the role of her legal guardian. It was the daughter who then made application to the Family Court for the marriage between her mentally incompetent mother and her competent step-father to be deemed as ended, and the daughter sought a property settlement to be made giving the daughter funds equating to half the value of her step-father's estate. Notwithstanding that her mother was being well cared for, and that the outcome sought would have forced her stepfather to sell his home (and effectively render him homeless - the Magistrate 'agreed' with the step-daughter, and made property orders to that effect.

The husband appealed and, before the Appeal was finalised, his wife died. The Appeal Court then handed down its orders 'as if the wife had not died' and 'agreed' that the elements of a marriage were essentially severed, and that it was equitable to make property orders, but determined that it was not necessary to enforce those orders 'at that time' i.e. the settlement could wait until after the frail step-father died.

His lawyers then appealed to the High Court and, before final orders were made, he also died. Although the High Court upheld the step-father's appeal, and dismissed the daughter's application for property orders, the reason for the dismissal was that the husband had made adequate provisions for his wife's care, and so it was not deemed necessary to make a property order – and especially not one that would be unjust to either party.

However, the High Court 'agreed' that the elements of a marriage were severed, and not simply because the wife was living apart from her husband, but because - by virtue of her significant cognitive impairment - she lacked the capacity to voluntarily consent to marry, or to remain in, or to end a marriage.

So, where does that leave the thousands of couples, where one party has moderate to severe dementia and has been deemed as lacking capacity to understand the nature or consequences of decisions? That question is especially pertinent, because demented (or deemed incompetent) people can still have (at least some) mental capacity, and can still express their wishes - or even change their mind!

What happens when they change their mind about that "Do not resuscitate" message on their Advanced Health Directive - but their legal Guardian doesn't want them hanging around any longer (spending any more of their inheritance), and insists that mum or dad doesn't know their own mind? The donor is not allowed to protest their case, and no lawyer will act for them, because they have signed away that power to a third party.

Is it now a case that the old need to fear the young - and especially their own?