CW
[2020] WASAT 132
•28 OCTOBER 2020
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: GUARDIANSHIP AND ADMINISTRATION ACT 1990 (WA)
CITATION: CW [2020] WASAT 132
MEMBER: MR J MANSVELD, MEMBER
HEARD: 14 SEPTEMBER 2020
DELIVERED : 23 OCTOBER 2020
PUBLISHED : 28 OCTOBER 2020
FILE NO/S: GAA 2246 of 2020
KW
Applicant
CW
Represented Person
Catchwords:
Guardianship and administration - Administration - Estate planning - Proposed severance of joint tenancy - Administrator's application for directions - Best interests of represented person - Liberal view of best interests - Conserving the property and financial resources of represented person - Directions declined
Legislation:
Guardianship and Administration Act 1990 (WA), s 4(2), s 70, s 71(5), s 74(1), s 111A
Trustees Act 1962 (WA), s 92
Wills Act 1970 (WA), s 40
Result:
Directions declined
Category: B
Representation:
Counsel:
| Applicant | : | Mr N Lloyd |
| Represented Person | : | N/A |
Solicitors:
| Applicant | : | George Lawyers |
| Represented Person | : | N/A |
Case(s) referred to in decision(s):
Charlton v Barber [2003] NSWSC 745
Public Trustee v Blackwood [1998] 8 Tas SR 256
Re The Full Board of the Guardianship and Administration Board [2003] WASCA 268
Re The Palermo Unit Trust; Ex Parte Philip Milton Rundell (As Trustee for Various Trusts) [2014] WASC 69
REASONS FOR DECISION OF THE TRIBUNAL:
The decision in this matter was delivered on 23 October 2020. The following reasons have been edited from the transcript to anonymise the names of the parties and to correct minor errors and omissions.
Introduction
CW is 68 years of age. She has an established diagnosis of dementia likely Alzheimer's disease. That diagnosis was made some years ago.
CW has a spouse, KW. They have been married for 48 years.
CW and KW have one surviving child, a son. Their daughter died in 2017.
CW recently became a resident of a nursing home.
In September 2019, KW made an application for the appointment of an administrator of CW's estate pursuant to the Guardianship and Administration Act 1990 (WA) (GA Act).
On 19 November 2019, KW was appointed plenary administrator of CW's estate with an authority to gift up to $500 a year from CW's funds (administration order). An enduring power of attorney that CW had executed on 18 March 2016 was revoked.
In June 2020, KW made an application under s 74(1) of the GA Act for directions on how to use the powers vested in him under the administration order.
By way of orders made on 6 August 2020, KW was required to file a submission setting out in detail the directions he was seeking and how directions sought would be in the best interests of CW (submission).
The application was heard on 14 September 2020 and the decision reserved.
The hearing was attended by KW and his legal representative.
CW's estate
In information filed with the Public Trustee, KW in his role as administrator sets out CW's estate as follows:
•joint tenant (with KW) in the family home (property)
•joint bank account (with KW) $25,733 (bank funds)
•superannuation $225,000 (superannuation)
•income from the age pension $975 per month and selffunded pension $966 per month
In a statement from the superannuation fund manager filed with the Tribunal, relevantly the client name is shown as KW and the balance of the superannuation account at 30 July 2020 is $381,588.23.
In a bank statement filed with the Tribunal, bank funds as at 7 August 2020 are shown as $46,771.49.
In KW's submission at para 16 the superannuation is described as 'joint superannuation with Macquarie'.
A liability of CW is the Refundable Accommodation Deposit (RAD) charged by the nursing home and amounting to $220,000. KW has paid $49,500 towards the RAD, it would appear from the superannuation.
In extracts from the nursing home's Permanent Resident Agreement the RAD of $220,000 is stated and an agreed deposit of $50,000. CW is to pay $19.10 per day on the unpaid RAD; $52.25 per day for the Basic Daily Fee and $1.54 per day for a Means Tested Care Fee. A service the nursing home describes as Aegis Advantage has been purchased on behalf of CW and costs $20 per day. The total daily charge is set at $92.89.
The application
In the middle of 2019 KW sought advice from a financial advisor (financial advice). The report of the financial advisor dated 25 July 2019 is before the Tribunal.
The context of the financial advice was the likely need for CW to enter into residential aged care in the future and for KW to plan for the costs of that care and his own retirement income.
The goals of the financial advice were to maximise CW's age pension, to minimise her Means Tested Care Fee and to ensure her income needs were maintained indefinitely in the event KW predeceased her. The further goals were to ensure that upon the death of CW and KW, the son would have the property and the deceased daughter's two children receive the balance of the estate.
The financial advice was relevantly (on the assumption that KW predeceased CW) that KW become the sole owner of the property, that CW be the nominated death beneficiary of the superannuation to enable the RAD debt to be paid and to keep a cash buffer for CW.
In this way if KW were to predecease CW, her RAD debt would be paid and she would have sufficient pension income to meet her nursing home fees given that the fees would not be as high as if the property remained in a joint tenancy ownership (for the purposes of the assets test in the calculation of the Means Tested Care Fee).
The proposal KW has put to the Tribunal for which he is seeking directions modifies the financial advice in the following ways.
The joint tenancy of the property would still be severed but the interests of KW and CW would be represented as tenants in common in equal shares.
The ultimate aim is to bequeath the property to the son and the deceased daughter's two children equally. KW would amend his will to reflect this outcome as to his share of the property and he would apply to the Supreme Court for an amendment to CW's will to achieve the same result (s 40 of the Wills Act 1970 (WA)). Currently both the wills of CW and KW are mutual wills.
KW would nominate CW as the beneficiary of the superannuation which because she is a tax dependant, would not attract a tax liability. On the other hand if the property remained as a joint tenancy and KW nominated the son and the daughter's two children as the beneficiaries of the superannuation, the latter would be subject to a 15% charge on the taxable component.
Following the financial advice, KW has withdrawn $49,500 from the superannuation and paid that amount towards the RAD.
The essence of KW's application is encapsulated in para 19 of his submission in which he states:
[KW] believes that the [financial] advice supports his application in that it confirms that it is in [CW's] best interests to sever the tenancy of the [property] and requests that the Tribunal support his application.
Disposition
The essence of the application before the Tribunal is that of estate planning by KW. He has taken financial advice concerning the best way to structure his affairs in the most financially advantageous way in the event he predeceases CW and in the context of his wish to bequeath his and CW's estates in a particular way (proposed restructure).
The complicating factor is that his estate is tied to that of CW as is typically the case in a long marriage and where CW is not in a position to decide if and how her estate should be restructured during her lifetime. CW's will currently bequeaths her estate to KW.
It is also the case that KW might not predecease CW.
On its face the proposed restructure is one which a married couple might consider as they age and as they look more closely at their financial needs into the future and what they would like to happen with their estates upon their deaths.
In the present circumstances there is no way of knowing with certainty what CW would have wanted and agreed to.
That being the case any decision of KW as the administrator of CW's estate must be made in her best interests (s 4(2) and s 70 of the GA Act).
KW is seeking the direction of the Tribunal as to what that might be.
The concept of best interests in a protective jurisdiction is on its face individualistic in its scope. It expresses a paramount concern for the overall interests of the person to whom protection is directed (Public Trustee v Blackwood [1998] 8 Tas SR 256) and is concerned with the person's separate and independent welfare (Charlton v Barber [2003] NSWSC 745 at [52]).
As Hennan J said in Re The Full Board of the Guardianship and Administration Board [2003] WASCA 268 at [43][44] (Re The Full Board)
… From this, and an examination of the entire Act [GA Act], it is obvious that the legislation is designed for the protection of adult persons whose faculties may be impaired, for any reason, and who are therefore in need of protection and assistance so as to ensure that their financial affairs and other welfare is not jeopardised by improvident, or ill-considered personal decisions or action, or by unscrupulous or ill-advised influence of relatives, friends and others who may deliberately or inadvertently exploit the vulnerability of the person in need of assistance and protection.
… The emphasis is on conserving the property and financial resources of the disabled person to ensure that they are available for his or her own needs, welfare and enjoyment and are not dissipated. These seem to be the primary objectives of the legislation and all the provisions of the Act can be seen to have meaning and effect as leading towards the achievement of those purposes. In the main, these will be accomplished by conserving the resources and property of the person under administration for use to his or her own advantage or, in cases where expenditure or imminent disposition of property are necessary or advantageous, by scrutinising the transaction to see that it is justifiable or provident having regard to all the circumstances, bearing always in mind the continuing and future needs of the person whose estate is under administration.
This position is moderated to an extent by the application of s 71(5) of the GA Act which permits the Tribunal to take a liberal view of the best interests of the protected person when considering estate matters.
The future financial requirements of CW must be directed to the need to maintain the security of her nursing home accommodation for the rest of her life. To achieve this her nursing home fees must continue to be paid and provision made for payment of the RAD liability. Currently she is being charged a daily rate on the unpaid RAD.
As already mentioned the proposed restructure is designed for the possibility that KW predeceases CW attendant with the wish of KW in those circumstances that the property be bequeathed to his and CW's son and the children of their deceased daughter.
In considering the submissions of KW in the overall context of CW's needs I am not minded to make the directions proposed by KW for the following reasons:
Notwithstanding the Tribunal's discretion to take a liberal view of CW's best interests, any advice given should be conservative given the overall protective nature of the jurisdiction articulated by Hennan J in Re The Full Board.
This position is supported for example by the way advice is given by Courts to trustees seeking directions under s 92 of the Trustees Act 1962 (WA). Re The Palermo Unit Trust; Ex Parte Philip Milton Rundell (As Trustee for Various Trusts) [2014] WASC 69 at [29].
CW has the benefit of a joint tenancy in the property. As it stands, should KW predecease her, she will have the use of the whole of that asset to meet her financial needs. Although I have no reason to doubt the bona fides of KW, by retaining joint ownership CW will not need to rely upon the generosity of others.
Other than what is currently in her estate CW is not in a position to add to her financial position by her own actions. She is entirely dependent on others.
The laws relating to aged care have changed over time and will no doubt continue to do so. CW's estate needs to be able to cope with any changes in the cost of aged care that might arise.
It is not the concern of the Tribunal as to the distribution of CW's estate upon her death. It is her financial needs during her lifetime to which the Tribunal must direct its attention. As CW's plenary administrator KW is permitted make an application to the Supreme Court of Western Australia to seek to amend CW's will (s 111A of the GA Act).
For these reasons I decline to make the directions sought.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MR J MANSVELD, (MEMBER)
28 OCTOBER 2020
0
3
3