IMPORTANT NOTE: These articles are subject to the disclaimer set out on our legal page.
ElderLaw Articles
RESIDENTIAL CARE SUBSIDIES
Residential Care Subsidies are processed through Work and Income (WINZ) at Whangarei and applications are assigned a case manager. Our experience is that case managers are without exception courteous and helpful; however the financial means assessment forms can prove complicated and time-consuming to complete. Financial information provided with the form must be complete and comprehensive. Family Trusts are carefully scrutinised.
If you have a Family Trust, you need to have completed your gifting programme five years prior to lodging your application to avoid the partial claw-back of gifting as part of your personal assets in assessing your eligibility for a subsidy.
Many people requiring rest home care are unable to complete the forms themselves. Both the applicant and his or her spouse or partner must detail all assets, income and debts. We can assist in advising on eligibility for a subsidy and then completing the financial means assessment forms. We also have a dedicated gifting co-ordinator to ensure that annual gifting to your Trust is not overlooked.
If you would like assistance, please contact:
Lesley Grant on 04 570 4180 or lagrant@gywlaw.co.nz
or Joanne Davies on 04 570 4175 or jpdavies@gywlaw.co.nz
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DYING INTESTATE (WITHOUT A WILL)
If a person has died without leaving a Will that person’s estate will be distributed in accordance with the order of priority as recorded in the Administration Act 1969, and may not be in accordance with the deceased’s wishes.
You should also be aware that any Will you have made becomes invalid on marriage. You can make a Will in contemplation of marriage, stating that the Will will not be revoked upon marriage. If you have not made a will in contemplation of marriage or a new will after marriage then you will die intestate.
Similarly, you should also make a new Will if you separate from your spouse. Your existing Will will remain valid until your marriage is formally dissolved which can take several years. During that post-separation and pre-dissolution phase, your existing Will remains valid which may mean that your ex-spouse may inherit everything you have under your Will, which is unlikely to reflect your current wishes.
Another crucial point to note is where a couple (married, de facto or civil union) has separated, if no formal Separation Agreement has been entered into, and one party dies leaving no Will, then the deceased’s exspouse/partner may be entitled to apply to the High Court to obtain Letters of Administration and may also be entitled
to a beneficial interest in the deceased’s estate.
It is usually more expensive to administer an estate when someone dies intestate.
We recommend that every person over the age of 18 years makes a Will and reviews it every few years.
If you would like a Will prepared for you contact Joanne Davies on 04 570 4175 or jpdavies@gywlaw.co.nz
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ENDURING POWERS OF ATTORNEY
There are two types of Enduring Powers of Attorney. One is for personal care and welfare and the other is for property (your possessions and assets).
Personal Care and Welfare
An Enduring Power of Attorney for personal care and welfare can only come into effect if you become mentally incapable. Mentally incapable means the inability to understand the effect of any decisions which may be made relating to a person’s personal care and welfare. An example of this is where a decision is required for a person with Alzheimer’s disease who needs to be placed in care.
Property
An Enduring Power of Attorney for Property can take effect immediately, at some time in the future, or if the person giving the Power of Attorney becomes mentally incapable.
When preparing Enduring Powers of Attorney, there are various alternatives and optional provisions which must be considered. These need to be discussed with the lawyer who certifies that he or she has explained the documents to you.
Enduring Powers of Attorney can be cancelled or changed at any time provided the person giving the Power of Attorney understands what he or she is doing and notifies the existing attorneys.
If a person becomes sick or is incapacitated as a result of an accident then unless an Enduring Powers of attorney is in place, the family and other close relatives cannot make important decisions. Without Enduring Powers of Attorney it would be necessary to make applications to the Court for a manager to be appointed to make decisions on financial matters and for a welfare guardian on personal matters. Such applications can be expensive, stressful and take time.
An Enduring Power of Attorney only operates while the person giving it is alive. This is to be contrasted with a Will which only takes effect upon death.
If you require Enduring Powers of Attorney contact either:
Lesley Grant on 04 570 4180 or lagrant@gywlaw.co.nz
Jeremy Hucker on 04 570 4185 or jihuker@gywlaw.co.nz
or Joanne Davies on 04 570 4175 or jpdavies@gywlaw.co.nz
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BENEFITS AVAILABLE FROM THE GOVERNMENT TO THE ELDERLY:
New Zealand Superannuation
To qualify for New Zealand Superannuation a person must be:
- 65 years of age or over; and
- a New Zealand resident residing in New Zealand on the date of claiming Superannuation.
To meet the test of “residing in New Zealand” a person’s normal place of residence must be in New Zealand and generally the person must have resided in New Zealand continuously for a period of 10 years since turning the age of 20 and 5 of those years must have been since the person turned 50. New Zealand also has reciprocal agreements with some countries and if the person comes from a country that has a reciprocal social security agreement with New Zealand, the rules relating to being a qualifying resident in New Zealand, more particularly meeting the requirement regarding time spent in New Zealand, may be different.
Living Alone Payment
If you are 65 years of age and living alone you may qualify for a Living Alone Payment in recognition of the additional expenses that you face as a single person.
To be regarded as living alone you must be living alone in your principal place of residence which must be a house, flat, boat or craft moored within New Zealand territory, a hotel room, a motel unit, a room in a licensed boarding house or a unit of accommodation in a caravan park.
The New Zealand Superannuation and Retirement and Income Act 2001 stipulates that you are not considered to be living alone if you share your residence with any person aged 18 years or over unless that person is a dependent child or a visitor who stays less than 13 weeks in any 26 week period.
You can however still be regarded as living alone if you are married, in a civil union or de facto relationship if your partner is:
- a long term patient in a public hospital;
- in residential care and is receiving a Residential Care Subsidy;
- in a rest home or private hospital and is entitled to receive the single rate of New Zealand superannuation;
- in prison, when WINZ has decided to regard the partner as a single person.
Funeral Grant
The Government can assist you with the funeral costs of someone close to you who has died. To qualify you must be a partner, child, parent or guardian of the deceased person, or you must be arranging the funeral of someone with no partner or child. The person who died must have normally lived in New Zealand.
How much you receive depends on the assets owned by the deceased person however WINZ will also take into account your income and assets if you are the partner, parent or guardian of the person who has died. Your principal place of residence, furniture, motor vehicles, caravans and any undivided interest in common in Maori land is determined as non-assessable assets for the purposes of the funeral grant.
The most you can obtain is $1855.75.
You will not be eligible to receive a grant if you have already received an ex-service person’s funeral grant, a Payment on Death Allowance or accident insurance payments to help with funeral costs.
The Supergold Card
This card will provide those who are 65 years and over, and those who are under 65 years receiving New Zealand Superannuation or the Veteran’s Pension, with a discount and concession card which will give to its holders access to a wide range of business discounts. The card, amongst other things, will enable its holders to have free public transport within New Zealand. The card further facilitates easy access to government and local council services, entitlements and concessions.
Community Care
This service has been instigated to support older people so that they may remain in their own homes for as long as possible. Services are provided to enable the elderly to receive care and support in the community and the purpose is designed to prevent or delay admission into residential care.
The first point of contact is either your local doctor or a Needs Assessment Service Coordination (NASC) Agency. The NASC agency can arrange for a needs assessment to be undertaken which will identify the type of support the person requires. No public funding can be provided until such an assessment has been completed. Available support can include housework, shopping, personal care, meals, assistance with getting in and out of bed etc.
Residential Care Loan
If you are entering into rest home care you may find that you are required to pay for your rest home care due to the assets you own being worth more than the threshold set by WINZ. If you only have limited cash available to pay for your care until your house is sold, you may apply to WINZ for a loan which is interest free and will assist for payment of your care. The loan is repayable upon the sale of your home or six months after your death.
For assistance in assessing your eligibility entitlement and in completing all necessary documentation for the transition and residential care, contact any of our Elder Law team:
Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz for professional, friendly assistance.
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DEALING WITH EXPECTATIONS OF INHERITANCE.
It is an unfortunate fact of life that there are a minority of children and relatives that believe they have an entitlement to inherit from their parents, grandparents, uncles and aunts.
In law there is a very limited entitlement to have testamentary provision made for you. You are under no legal obligation to preserve your estate for your children or relatives.
The Testamentary Promises (Law Reform) Act enables anyone who has provided services in return for promise of testamentary provision to bring a claim against an estate to have that promise honoured. You may not accept that you have made a promise of testamentary provision in return for services provided.
The Family Protection Act enables children, spouses and limited other classes to challenge wills where the deceased has not discharged his or her moral duty. There is a body of case law and established principles which determine the extent of a claimant's entitlement. Often people will not wish their estate to be determined in accordance with those statutory entitlements. Quite apart from the cost to the estate, the outcomes may not be what the deceased wished to happen.
All of that law is only applicable to estates. It does not constrain dealing with assets during your lifetime. You have no legal obligation to provide your children and relatives with an inheritance and they have no legal entitlement to expect you to do so. Mechanisms are available for removing assets from your estate prior to death so that any statutory entitlements have no application to them and estate litigation is avoided.
Another area where problems can and do arise is where people get older, become less able to control their own affairs and become more reliant on their children, relatives or close friends. Opportunities arise for people in a position of trust and influence to abuse that position through denial of access to the benefit of assets, "looting" of family heirlooms and helping themselves to cash and other property. Often actions taken by those with influence and control, whether for the benefit of the elderly or the opposite, can become the source of family disputes. Appropriation of assets to personal use, intermingling of parents assets and personal assets (for example in granny flat situations) and often merely applying parents' money for their benefit can all give rise to family issues.
What are often described as blended families are a common source of conflicting inheritance expectations and family disputes. The unseemly court battle between Sir Edmund Hillary's second wife and his children from his first marriage over his watch collection is illustrative. In many cases there is little affinity between the first and second families and both may have expectations that they will they will be dealt with more favourably than eventuates. There may not be very much you can do make the two families get on better, but what you can do during your lifetime is use a combination of legal structures and documents to ensure that your desired outcomes are achieved and put beyond challenge. To do nothing is to provide the opportunity for what can be acrimonious and costly disputes.
All of these various situations can be complex. They need to be dealt with with care at both a family and at an experienced and specialist legal level. Prevention is better than cure. You should take the time to structure your affairs in such a way that you will not be reliant on the continued goodwill of those who will be looking after you. You can head off disputes between family members. Trusts, independent trustees who you can rely on to put your interests first and other legal mechanisms can be put in place while you are still in control.
If you or a sibling are looking after an elderly parent formal arrangements can be put in place in a transparent and legal manner that protect the caregiver and the parent and avoid disputes. In cases of abuse of position there are legal remedies that are available to right the ship where a caregiver is abusing a position of trust.
If any of the situations referred to or there are other issues of a similar nature that exist or are a possibility you should get legal advice at the earliest opportunity. Contact any of our Elder Law team: Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz for professional, friendly assistance.
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RETIREMENT VILLAGES ACT 2003
If you are residing in or considering moving into a retirement village, the Retirement Villages Act 2003 will have application. That Act records the rights and obligations both residents and village operators have. The Act also has a Code of Residents' Rights and a Code of Practice together with procedures for complaints and dispute resolution.
Retirement Villages are a lifestyle choice. Each Village offers a different range of services including security, maintenance of accommodation. Some have shared facilities such as pools, bowling greens, communal lounges and outings. Some Retirement Villages provide hospital and rest home care. Against the benefits to be received, you may lose some privacy and independence, the potential for capital gain on your investment and in some cases the assurance of a loss on sale or death.
The Department of Building and Housing administers the Act and provides information to intending residents, residents and Village operators. There is a statutory Retirement Commissioner who deals with disputes.
The Act requires all intending residents to obtain independent legal advice before entering a retirement village. Contact any of our Elder Law team: Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz for professional, friendly assistance.
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LICENCES TO OCCUPY
A common form of occupancy document for retirement villages in New Zealand is a Licence to Occupy. It gives the licensee the right to live in the accommodation but does not provide ownership. As a result, finance is not generally available to acquire a Licence to Occupy.
Some villages base accommodation on a legal title structure (known as a Unit Title), which does confer ownership of the unit. Regardless of the basis of occupancy, residents usually have limited or no control over the sale of the unit when they vacate the unit. That right is normally reserved to the village operator. The Retirement Villages Act 2003 (see our other feature article above) does however, allow residents to be more involved in the sale process if the unit remains unsold for a period of time.
The documentation for retirement village occupation will also include a formal agreement covering your various rights, entitlements and obligations. They vary between retirement villages and you will want to be aware of the particular constraints on occupancy that are applicable. Often you will be considering a choice of retirement villages. The occupancy arrangements and related costs can vary significantly.
We can help you understand why acquiring occupancy rights in a retirement village is different from buying other residential property. We will explain to you the type of occupancy that you are considering and any ongoing costs that may be associated with the retirement village. We can also explain the effect of the documents the village operator must give you before you purchase and provide you with independent legal advice before you sign, which is a requirement of the Act.
Contact any of our Elder Law team: Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz for professional, friendly
assistance.
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PREPAID FUNERALS
Prepaid funerals are now a common feature as part of estate planning. At a time of stress and upset it can be reassuring for next of kin not to have the financial worry of funeral costs.
We are happy to assist our clients with arranging a prepaid funeral plan.
The Funeral Directors Association of New Zealand estimates the average cost of a funeral to be $8,800.00. That money is often required quickly so that the appropriate arrangements can be put in place. Often, however, family members are called upon to cover those costs until funds from the deceased's estate are available.
It is general bank policy to freeze a deceased's accounts once the bank learns of the death. A grant of probate is then often required, which is an application to the High Court to essentially confirm the administration of the estate. That process can take several weeks or longer if issues arise.
With a prepaid funeral plan, funds will be available to a nominated family member immediately.
Contact any of our Elder Law team: Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz for professional, friendly assistance.
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SOCIAL SECURITY ACT 1964
The purpose of this Act is to provide financial and other support to help people who are unemployed, sick, injured, disabled, have caring responsibilities or are suffering hardship. Where appropriate, people are required to use resources available to them before seeking financial support under the Act.
Elderly people in our community may benefit in a variety of ways from the support available to them under the provisions of the Act.
In particular those requiring long-term residential care in a hospital or rest home may be eligible for a residential care subsidy. Eligibility is based on a means assessment of assets and income. Applications for means assessment are processed by Work and Income.
Section 147A of the Act prevents a person who is applying for a means assessment from depriving themselves of assets or income in order to qualify for a subsidy. With the abolition of gift duty in October 2011, this section is likely to be applied more stringently. For example, people who set up a trust later in life may still not qualify for a means assessment because of the application of this section. It is best therefore to review asset planning strategies sooner rather than later in life.
For further advice contact any of our Elder Law team Jeremy Hucker jlhucker@gywlaw.co.nz, Lesley Grant lagrant@gywlaw.co.nz and Joanne Davies jpdavies@gywlaw.co.nz.
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Elderlaw Vibrant Hutt Article
‘One stop’ future-proofing for baby boomers
Forget your high maintenance, entitled and technologically sophisticated Generation Y, Lower Hutt law firm Gillespie Young Watson has launched a new specialist division all about the Baby Boomer.
Like HomeLegal, its specialist home conveyancing division, ElderLaw is designed to lift the bar of client services to a whole new level. While others take a piecemeal approach to matters like Enduring Powers of Attorney or setting up of Trusts, ElderLaw takes a proactive, holistic approach offering clients a total package deal - and one not just limited to legal issues.
Lesley Grant, one of the three specialists making up the ElderLaw Team, says the new division provides people at or nearing retirement age with a “very focused” full review of their affairs to ensure they have the appropriate asset planning strategies in place so they can continue to live comfortably and optimise and protect their assets.
“People of this generation often have more money than their parents had at the same time of life and possibly another 20 to 30 years to survive without earning any income,” she says. “However, it is also important for people to realise asset planning is not just for the wealthy or the well off. Everyone needs to be aware of the legal and other mechanisms available to them to ensure they make the most of what they do have.”
The ElderLaw review process takes clients through a 24 point checklist which covers everything from Trusts, residential care support entitlement through to pre-paid funerals.
“Trusts are a very effective asset protection and estate planning tool,” Lesley Grant says. “We review the client’s circumstances and then advise them on the best Trust structure for them. Trusts used to be very inflexible but this is no longer the case with a Trustee now able to retain much more control over what happens.”
Lesley Grant says ElderLaw can also recommend effective asset planning techniques, which can be incorporated into a Will. The team can also help with putting a client in touch with other professionals to arrange, for example, a pre-paid funeral.
‘One stop’ future-proofing for baby boomers Forget your high maintenance, entitled and technologically sophisticated Generation Y, Lower Hutt law firm Gillespie Young Watson has launched a new specialist division all about the Baby Boomer.
Lesley Grant says Enduring Powers of Attorney need to be put in place before people lose the capacity to manage their own affairs.
“If this is not done an application needs to be made to the Family Court pursuant to the Protection of Personal and Property Rights Act 1988 to appoint someone who can act for the person. Such applications are usually urgent and our Team appreciates the circumstances surrounding the need for an application are often stressful and are happy to help with the application and hopefully limit the stress.”
Enduring Powers of Attorney are a necessity when entering most rest homes.
The ElderLaw Team has specialist knowledge and experience in dealing with WINZ and can help with an application for a rest home care subsidy. It also has expertise in dealing with the various documents associated with rest home care such as occupation arrangements.
Lesley Grant urges baby boomers to take advantage of the “one stop” ElderLaw service. “I know people don’t like to think of their mortality, believing they will go on forever. But there are very real consequences if they do not take the opportunity at or near retirement to sort out their affairs.
If people do not put things in place they will leave behind a lot of angst, trauma and problems which could have been avoided. This sorting out of affairs fairly is particularly important given the increase in blended families.
“You could say ElderLaw specialises in providing peace of mind and the knowledge you have done the best you can for your family before getting on with enjoying the rest of your life,” Lesley Grant says.
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