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Make like a Boy Scout and Be Prepared…

December 13, 2010

Blogging on family law issues has taken a back seat in the last few weeks while I attended to some family issues of my own. A close family member has been seriously ill in hospital for several weeks which has provided a number of challenges on many different fronts. It did get me thinking though of the importance of taking a bit of time while you are in good health to ensure that if you end up ill or injured, your financial affairs will be looked after.

Here are some tips (some practical, some legal) I learned or was reminded of during my experience over the last few weeks:

• Have your main bill payments set up to be paid by an automatic payment or direct debit – that way, you won’t have to worry about how the phone or power bill will be paid while you are recuperating.

• If your rates aren’t on an automatic payment, make sure the Council is notified of your hospitalization as soon as possible – you will likely find they won’t charge any penalties on rates due at that time.

• Make sure someone reliable will clear your mail or if you are able to arrange it, have the Post Office hold your mail for you or redirect it to a friend or family member’s address. This means something important isn’t likely to be missed and it avoids a pile of backlogged mail building in your letterbox, telling your local burglars you are away.

• If you live alone and are likely to be in hospital or away from home for some time, consider having your hot water switched off or power switched off at the mains and your phone or internet connections suspended. This will save you money for utilities you won’t be using while you are away.

• Consider having a trusted family member or friend named on your main power, phone and other utilities accounts as being someone who can act on your account. This will help with the tip above.

• If you are able to plan ahead for a hospital stay, check your mobile phone plan. Chances are you may end up using your mobile phone in hospital a lot more than you usually would so look into whether your plan is going to be the most economical – you don’t want a nasty shock when you open your phone bill after getting home again.

• If you have a partner or spouse, make sure you each know where to find your main financial documents (including your Wills) and information. It is worthwhile to draw up a list of all your accounts, credit facilities, insurances and investments with key account numbers, balances and key contact people and contact numbers. Make sure you both know where to find this list and be sure to update it regularly. Even if you are single, such a list is likely to still be useful in case you need to quickly provide such information to a friend or family member if you ever need help while you are ill or incapacitated.

• Those are some practical tips and here is one big legal tip: Organise an Enduring Power of Attorney (“POA”). This document gives someone else the legal power to act for you in situations where you are unable to do so for yourself.

There are two types of POA – one dealing with decisions about your personal care and welfare and the other dealing with decisions about your money and property matters. You don’t have to appoint the same people for both roles and there are often good reasons to appoint different people given the attributes required for each role are different.

The Attorney for your personal care and welfare will only be able to start making decisions about your welfare if you are deemed unable to care for yourself.

The Attorney for your financial affairs can be appointed straight away and act on your instructions. This is particularly useful in situations where you are able to make decisions about managing your financial affairs but are physically unable to carry out those decisions (such as if you are in hospital recuperating). That attorney can begin to act without your instruction if you are deemed unable to make decisions about your financial affairs yourself.

Any decision as to your mental fitness to make decisions about your welfare or financial matters is carried out by a health professional. Obviously it is important to appoint people to these roles who are well trusted. Your attorney for personal care and welfare matters must be one person and cannot be a Trustee company. However, your attorney for financial matters can be more than one person and can be an organization such as Public Trust.

You can name people in your POA that the attorney must consult with or provide information to. This provides you with a measure of protection and minimizes the risk of an Attorney misusing their powers.

The key to all of this, of course, is to DO IT NOW while you are healthy and able to do so. Hopefully, the precautions you put in place will never need to be used but making like a boy scout and being prepared will ensure you are not worrying about your financial matters while you should be focussing all your energies on your health.

If you want  help with a family law issue, go to www.familylawresults.co.nz.

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