As Australia’s population ages, families are increasingly facing complex situations where family law, aged care and capacity issues overlap. Family Law and Wills & Estates Partner Hayley Condon explains the emerging legal challenges, who may have authority to make important decisions about an ageing parent’s finances and living arrangements, and what families need to understand before they find themselves caught in the middle.
Family law isn’t just for younger couples
Most people associate family law with separation, parenting arrangements and property settlements involving younger or middle-aged couples.
But it also affects older Australians, particularly where one spouse has dementia or declining health, needs high-level care or must move into residential aged care.
These circumstances can place enormous emotional, practical and financial pressure on a relationship.
In our practice, we are seeing an increasing number of adult children, often in blended families, seeking legal advice where an ageing parent has lost capacity or there are serious concerns about their ability to make informed decisions about their finances, living arrangements or care.
These concerns can become particularly difficult to navigate where the parent is in a later in life marriage or relationship, and the spouse or partner is controlling access, delaying aged care decisions, excluding the children from important discussions or dealing with assets in a way that raises concerns about whether the parent will have sufficient resources for their ongoing care.
Do adult children have the authority to step in?
This is often where families come into difficulty. Being someone’s child does not, on its own, give you the legal authority to act for them. If the parent has lost capacity, an adult child will only have legal authority to act if they have been appointed as the parent’s attorney under an enduring power of attorney. Where there is no valid appointment, they need to apply to the Queensland Civil and Administrative Tribunal (QCAT) or the equivalent tribunal in their state, to be appointed as an administrator for financial decisions or as a guardian for personal and health decisions.
If the parent still has capacity, or their capacity is uncertain or fluctuating, legal authority remains with the parent.
In that situation, the adult child’s focus should be on working with the parent to take appropriate steps in their best interests, while the parent is still able to understand and participate in those decisions.
Issues that can arise often sit at the intersection of family law, elder law, capacity issues, substitute decision-making and aged care, which is what makes them so complex.
Can dementia change the course of a long-term relationship?
Dementia can change a relationship emotionally, practically, and financially. A couple may have been together for decades, but once one person develops dementia, the relationship can begin to change in ways neither of them expected.
As the condition progresses, the spouse with dementia may experience changes in memory, mood, judgement, personality, and behaviour that place enormous pressure on the relationship. The other spouse may gradually move from being a partner to being a carer, and that shift can be exhausting and distressing.
From a legal perspective, the key issue is capacity. A person is presumed to have capacity unless shown otherwise, and capacity is decision-specific. Someone might be unable to manage complex finances but still be able to express where they want to live, or who they want to spend time with.
Can ageing parents with dementia legally separate or divorce?
A dementia diagnosis does not automatically prevent a person from separating or divorcing. The question is whether they can understand the nature and consequences of the decision.
Separation is the breakdown of the relationship. It requires at least one party to form an intention to separate and communicate that decision. A person with early-stage dementia may still have sufficient capacity to do that, and to commence property settlement proceedings.
In Australia, divorce is no-fault, which means the marriage must have broken down irretrievably, shown by 12 months’ separation with no reasonable likelihood of the couple getting back together. A person with early-stage dementia may still have sufficient capacity to apply for divorce and commence property settlement proceedings on that basis too.
The position becomes more complicated once a person has already lost capacity.
If separation occurred before capacity was lost, any court proceedings, such as a divorce application or property settlement proceedings, will need to be conducted on the person’s behalf by a case guardian appointed by the court. This may be the person’s financial attorney under an enduring power of attorney, an administrator appointed by QCAT or other state equivalent, or another suitable person appointed by the court.
If separation has not yet occurred and the dementia is advanced, the person may not have capacity to make that decision themselves, if they cannot understand and weigh up what separation actually means.
That does not, however, stop the other spouse or partner from choosing to separate.
Protecting a parent’s assets in second marriages and blended families
Many families worry that if they do not step in, a parent’s assets may ultimately end up somewhere they were never intended to go. Second marriages and later-in-life relationships can create significant estate planning challenges, particularly in blended families, because each person often comes into the relationship with their own children, their own assets, and their own expectations about what will happen to those assets when they die.
Without proper planning, those expectations may not match the outcome. Two common traps illustrate why:
- The family home. If it is owned as joint tenants, the house will usually pass automatically to the surviving spouse, regardless of what the Will says.
- Superannuation. This may be paid at the discretion of the super fund trustee, including to a spouse, if there is no valid and effective binding death benefit nomination in place.
A Will may also be outdated or may not adequately deal with the competing interests that often arise in blended family situations.
Adult children often become concerned when a parent loses capacity before updating their Will, enduring power of attorney, and superannuation nomination, and with good reason.
It is why these conversations are best had early, particularly following an early-stage dementia diagnosis, while the parent is still able to understand their circumstances, give instructions, and ensure their estate and aged care planning reflects their actual wishes.
The biggest mistake families make
The biggest mistake families make is waiting too long. Families often avoid these conversations because they are uncomfortable. They hope things will settle down, or they assume it will be worked out later. Unfortunately, later can often be too late. Once capacity is lost, the legal options narrow considerably.
The best time to address these issues is early, while the parent still has capacity and can express their wishes clearly. That allows for proper planning around family law issues, aged care, estate planning, and substitute decision-making, while still respecting the parent’s autonomy and dignity.
Not sure whether it’s time to step in?
A few signs it may be time to seek legal advice for an ageing parent or loved one include:
- Your parent is in a difficult, unhealthy, or unsafe relationship but no longer has full decision-making capacity.
- One parent needs to move into aged care, but the other refuses to cooperate or sell assets needed to fund their care.
- A spouse, partner, or attorney is controlling finances in a way that seems unfair or causes concern.
- There is no Enduring Power of Attorney in place, or the person appointed is not acting in your parent’s best interests.
- You are concerned that your parent’s assets or financial security may be at risk.
If any of these feel familiar to your situation, early legal advice can prevent conflict, financial loss, and emotional strain.
Attwood Marshall Lawyers – guidance when family law and aged care intersect
Family law does not only affect younger couples. Where dementia, declining capacity, or a later-in-life relationship is placing pressure on a family, early advice can make a significant difference to the options available.
Our Family Law team works alongside our dedicated Aged Care and Wills & Estates teams to help families understand their options and act while there is still time to plan properly.
If your family is facing questions about an ageing parent’s capacity, relationship, or estate planning, contact our Family Law and Wills & Estates Department Manager Donna Tolley for a confidential conversation on direct line 07 5506 8241 or email dtolley@attwoodmarshall.com.au.
