Its no secret that Covid-19 remains front and centre of our lives and likely will remain there until the whole globe is vaccinated.
That said, West Australians in particular seemed particularly adept at just getting on with business and doing their best – we have been particularly lucky with the remarkably low levels of infection and community spread, helped by several snap lockdowns over the last year and half.
During the lockdowns any of us came to sudden realisations that we may in fact be mortal after all. Watching the devastating numbers of infection and death around the globe brought that home with visceral force.
The upshot from an estate planning point of view is that we have seen increased numbers of clients who have bitten the bullet and dived into the estate planning experience with us for the first time as well as many who have returned for a ‘tune up’ to refresh their Will and other documents as they recognise their lives have altered.
Notwithstanding this, the numbers of Australians who die without a Will in place hovers around 59%, a number that is altogether far too high and usually results in brutal litigation that tears families apart and costs vast sums in legal fees.
Covid-19 also exposed many elderly people’s vulnerability. The steady and predictable daily routines of many elderly were suddenly disrupted – and the disruption laid bare how many of them were hiding Alzheimer’s symptoms and loss of mental capacity which meant they were unable to deal with the necessary changes to their lives.
This lead to a marked increase in the need for enduring Powers of Attorney and Enduring Powers of Guardianship along with fresh Wills, to make sure the vulnerable had the right control mechanisms in place for their assets and lifestyles.
The same exposure of the vulnerable elderly also resulted in an increased amount of claims against existing Powers of Attorney, where families discovered through the suddenly shattered routine lives of their elderly parents that one of their number had in fact not been treating the parent, or their assets, with the proper respect. The last year has seen us mount many more challenges to existing Powers of Attorney for elder abuse- financial abuse in particular- at the State Administrative Tribunal. We do not predict these claims will diminish any time soon, as we are pleased to see a much greater focus on the needs of the elderly in our society. We, as an aging population, are more at risk of this sort of abuse as we live longer and longer.
The last lesson learnt from Covid-19 is that many of us are living with financial stress hanging over us. In our practice, that meant an increase in claims by adult children against the estates of their deceased parents. The majority of these claims had their genesis in nothing more than poor estate planning by their parents – always saddening to see claims arise when we could have so easily crafted estate planning that would have either made proper provision for the claimant or crated estate planning to make the challenge not viable in the first place.
With more beneficiaries living with financial stress, the need for greater provision from an estate naturally follows, and Covid-19 saw many people who once were doing just fine financially suddenly unemployed and in greater need.
This also results in claims against smaller estates, as the needs for provision matter more. For example, for many beneficiaries who have good jobs and have accumulated their own assets, receiving an extra $100k from their deceased parent may not ultimately make that much difference to their financial portfolio. But for those who have lost jobs or businesses due to Covid-19, an extra $100k may be the difference between keeping the family home or being out on the streets.
As always, good and proactive estate planning is the key.