Enduring guardian - legal capacity
An enduring guardian is a person appointed as a substitute decision maker to exercise a person’s legal authority to make health and lifestyle decisions if they should lose legal capacity to act for themselves.
An enduring guardianship gives the appointed person power to make health and lifestyle decisions on behalf of the appointor once they lose mental capacity.
In NSW the appointment is made by written instrument in the form required and operates pursuant to Part 2 of the Guardianship Act 1987 (NSW). A person must have legal capacity to make the appointment at the time it is made.
The appointment must be accepted and only has effect during such periods as the appointor has lost legal capacity and requires a guardian.
An enduring guardian has similar authority in relation to health and lifestyle decisions that an enduring power of attorney has in relation to financial and property matters. It is often completed at the same time as an enduring power of attorney is appointed.
Some general principles about legal capacity are set out in the Field of Expertise page “Legal capacity - Introduction and overview” should be read with this page.
The principles specifically relevant to the related issues of legal capacity to appoint a power of attorney or to make, amend or revoke a will are set out at the Field of Expertise pages “Legal capacity - power of attorney” and “Legal capacity - testamentary capacity”.
Extent of authority
The enduring guardian may be given significant the power to make medical, health and lifestyle decisions on behalf of a person once they lose capacity.
The appointment can be limited to specific functions and can be subject to limitations and directives. The common items considered are: place of residence and may include a directive concerning where the person is to live if they are no longer safe to continue in their own home; health care to be received; consent to or the with holding of consent to medical or dental treatment; personal services to be received; and access or contact with others. There may be specific directions given about who is to be consulted in the decision making.
It may be an individual, or two or more people jointly or severally, and can include a nominated substitute to act in the event the original appointee cannot or will not continue. As with an appointee under a power of attorney or enduring power of attorney a high level of trust is required of the individual.
The principles applicable to the assessment of capacity to appoint an enduring guardian are similar to those articulated for the appointment of a power of attorney.
In summary, in addition to not being impaired in their decision making in a way that interferes with their capacity to understand the concept of an enduring guardianship, the person must in fact understand the specific provisions of the particular enduring guardianship appointment they are proposing to execute.
Risks to solicitors, trustees and their clients
“The demographic reality of an aging population means that the likelihood of challenges to wills on the ground of testamentary capacity is increasing.” Ryan v Dalton at . The identical risks apply to the execution of enduring guardianships and for similar reasons. As noted in that case:
“the effort involved in paying attention to questions of capacity at the time instructions for a will are taken and the will is executed (including, where necessary, obtaining an assessment of the client where it is thought one is called for) pales into insignificance with the expense, delay and anxiety caused by litigation after the testator’s death”.
In addition to a client’s intentions being defeated, a solicitor acting for a person later found to have not had legal capacity faces both civil actions and sanction for unsatisfactory professional conduct.
At the bottom of this profile are brief details of a number of the experts that Expert Experts represents. Call our office to discuss your requirements and to obtain a recommendation that suits your needs and budget.
Expertise in Action
When should an independent assessment be conducted?
The principles set out in Ryan v Dalton regarding testamentary capacity would appear to apply equally here. His Honour noted that care should be taken with “anyone:
- over 70;
- being cared for by someone;
- who resides in a nursing home or similar facility; or
- about whom for any other reason the solicitor might have concern about capacity.”
Actual and constructive notice
Three main scenarios arise:
1. Constructive notice: When there are circumstances giving rise to constructive notice. In Ryan v Dalton these were identified at  as: “anyone: (a) over 70; (b) being cared for by someone; (c) who resides in a nursing home or similar facility; or (d) about whom for any other reason the solicitor might have concern about capacity.”
It is anticipated that this will become an accepted minimum standard of constructive notice.
The other situation of constructive notice is a significant change of a will which benefits a person who may be in a position to unduly influence the testator.
2. Actual notice: When a person presents with a diagnosis of dementia or similar, when a family member or other person raises capacity as an issue, or when it appears clear to the person taking instructions that there is or may be reduced capacity.
3. Notice of a likely challenge: When familial or other circumstances including the nature of the transaction make it more likely that a transaction will eventually be challenged. This may include complex family structures, multiple partners and children, strained family relations, or the preferencing of some family members through gifts or as beneficiaries when it is anticipated this will upset other family members. Other circumstances may include large estates and complex trust structures where there is a high perceived potential reward for successfully challenging the transaction.
Qualifying an appropriate expert
The main difficulty in finding a suitable expert to assess legal capacity is in finding an expert who has both the expertise required to assess mental capacity and an understanding of the above principles.
Expert Experts has addressed this by developing products, processes and training programs to enable appropriately qualified experts to understand the legal issues involved so that they may address all of the issues required to conduct these assessments.
We also work with clients to ensure the briefing process adequately instructs the expert about the particular transaction, so that an assessment can be conducted and an admissible expert report produced in accordance with the expert witness code of conduct which addresses all relevant issues.
Different assessment types
The expert selected and assessment conducted will depend upon the condition of the examinee, the complexity and nature of the transactions being entered into, and where the examination takes place.
For some fields of expertise we have some sample sections of de-identified reports. Please contact our office if you are interested in a sample.
The overall cost of expert opinion depends on the services required. Some of the key factors that affect the cost of advice include:
- The need for a view or inspection of a location
- The quantity of documentary material to be reviewed
- Whether there are reports of other experts to be reviewed and commented on in detail
- Whether there is a need for conferences with the expert either in person or by telephone/Skype