That’s according to Australian Unity Trustee’s national manager of estate planning, Anna Hacker. Speaking to Nest Egg, she said “millions and millions” of Australians will develop dementia over the coming years, and as such there’s a need for estate planning that protects against, or accommodates for that situation.
Dementia is a collection of symptoms which impact brain function and which often accompany old age. Dementia may be in the form of Alzheimer’s disease or Parkinson’s disease, among others.
“It's very common that even if that person doesn't actually physically die of dementia, it will be on the death certificate but we see it in the majority of the death certificates for the estates that we see as well,” Ms Hacker said.
When it comes to dementia and loss of mental function, Ms Hacker explained that one of the main issues she sees as an estate planner is families who “don’t realise” that they can establish a statutory will in the case that their loved one had not formed a will prior to developing the disease.
A statutory will functions the same as a personal will, however is proposed by someone else, she explained.
“I think it's certainly an important thing for people to remember. A lot of people don't realise you can do it [propose a statutory will], and they think: ‘oh no, well, mum's got dementia, so there's no way we can do a will now’.
“[However] the reality is you can and it can mean that the court can look at it in a much more objective way and really think about what that person wanted whereas after someone passes away there's more litigation.”
She said that, to her, “it makes a lot more sense” to propose a statutory will before the parent or family member passes away, especially if “you know it’s going to be a fight”.
Pointing to a recent case where a young child had severe physical disabilities due to problems at birth, Ms Hacker said statutory wills don’t just apply to the elderly.
She explained that this child had received $3.2 million in damages against the hospital which had been used to produce an income and buy a house for him, his siblings and his mother. His father had had little to do with him and his mother was the primary carer.
“The child was about to undergo serious surgery and an application was made for a statutory will to be made on his behalf, as he had never had capacity to create his own will.
“The court eventually approved a will that left the majority of the estate to the mother and siblings, with a small portion allocated to the father.
“Without the statutory will, the father would have been able to claim part of the family home and the funds, which would have seriously affected the other children and their mother.”
Ms Hacker added that while statutory wills are often considered as a last resort, there can be a greater role for them in estate planning.
“If a person has lost capacity, or indeed, never had capacity, it is entirely appropriate to look at whether a statutory will can be made.
“Often, statutory will applications are accepted by all parties and can allow for inclusion of strategies such as discretionary testamentary trusts,” she continued.
Bill Gates recently made headlines for pledging to invest US$50 million into the Dementia Discovery Fund, a private fund which works to “diversify the clinical pipeline and identify new targets for treatment”.
“This is a frontier where we can dramatically improve human life,” he said, explaining his decision to invest.
"It’s a miracle that people are living so much longer, but longer life expectancies alone are not enough. People should be able to enjoy their later years — and we need a breakthrough in Alzheimer’s to fulfil that.”