Do You Need a Financial Management Lawyer?

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Financial management orders are an important tool used in NSW when dealing with a case where a person is unable to manage his or her own finances, and a financial management lawyer could assist significantly.

 

The Guardianship Act 1987 (NSW), which governs financial management orders, dictates that management of a person’s property is a last resort, and as such, it is generally only granted in limited circumstances. A financial management order can be made by the NSW Supreme Court or NCAT.

When you’re an adult with a disability, it can be difficult to make decisions about your finances. A financial management order (FMO) is a legal order that gives someone the right to manage your money and assets and appoints them as your financial manager if you can’t manage your own affairs.

There are various circumstances where a financial management lawyer is useful, as although the Tribunal process is relatively informal, and legal representation is discouraged, there are matters where a lawyer for one or more of the parties can be helpful to both the parties and the Tribunal.

This article will explain what financial management orders are, how they work and why you should consider enlisting the services of a financial management order lawyer for a Sydney NCAT application and hearing before the Tribunal.

What is a Financial Management Order in NSW?

A financial management order (FMO) is an order made by NCAT Guardianship Division (the Tribunal) that gives someone the right to manage the finances of another person who does not have the capacity to do so. Someone with a mental illness or a physical disability might not have the capacity to manage their own finances. This might be due to a disability or it might be due to old age. In such cases, you can seek legal help to have a financial management order made in favour of a family member or in the absence of a suitable person, the NSW Trustee & Guardian.

How Does a FMO Help in Protecting the Interests of an Individual with Limited Capacity?

A financial management order protects a person from his or her finances or assets being spent unwisely or being dissipated, particularly (but not only) when there are substantial or complex financial affairs which the person is no longer able to manage by themselves. This can arise when a person is ageing, when a person loses a spouse who had always handled the finances, or when a person with a longstanding disability receives compensation monies or an inheritance which is too large for them to manage themselves.

When is a FMO Lawyer Useful?

There are various circumstances where a financial management lawyer is useful, including:

• If you have someone willing and able to act as your financial manager but they don’t have a lawful right to do so and you need someone to be appointed as your permanent (or non-permanent in some cases) financial manager;
• You have a relative who does not realise (due to age or physical or mental impairment) that they are not capable of managing their own finances;
• You have a relative who is being manipulated or taken advantage of due to their age or disability, into spending or dissipating their finances or assets in a way which is against their interests;
• There is a current FMO in place, and you want to change the terms of it. You may be either seeking to revoke the order, or to have it amended, or to have the Financial Manager replaced by another.

A specialist lawyer can assist with challenging existing structures in place (or a lack of structure) and help set up new arrangements for a more suitable future.

There are various conditions that need to be met before an FMO can be granted. A lawyer experienced in appearing in the Tribunal can assist in determining whether the criteria is met in a particular case and assist in making the appropriate application to the court.

Who Can Apply for Financial Management Orders?

Anyone who has a concern about another person’s ability to manage their own finances effectively can apply for a financial management order.

Questions to Consider Before Deciding to Apply for a Financial Management Order:

1. Do you think the individual has the cognitive/mental capacity to make financial decisions?

2. Do you think the individual can make sound/sensible/reasoned decisions on how to manage their finances?

3. Is the individual able to provide financially for his or her own needs with the finances they have available?

4. Are there other factors that may affect the individual’s ability to make sound financial decisions?

5. What is the individual’s current financial situation?

6. Who is responsible for managing, or assisting with, the individual’s finances at the moment (let’s call him/her “X”)?

7. Is X acting in the interests of the individual?

8. Does X have any conflict of interest in relation to the individual (e,g, is there any mixing of their finances)

9. Is the individual vulnerable due to the relationship with X (or with anyone else – family, friend or stranger)

10. Is X (or anyone else) taking advantage of the individual’s vulnerability?

11. Is X a suitable person to assist the individual with, or manage, his/her finances (i.e. does X have experience in managing money – either his/her own or in other contexts?)

12. Who is the best person to manage the individual’s finances going forward?

What are the Consequences of a Financial Management Order Being Made?

Financial management orders can be granted for a specified period of time, after which they are reviewed, but the vast majority of orders made are permanent. The financial manager appointed will have authority to make decisions on the finances of the individual, including the ability to make or cancel payments, change banking arrangements, and make investment decisions. The financial manager will also be responsible for the record keeping, accounting, and the safeguarding of the individual’s assets. The financial manager is formally accountable to the NSW Trustee & Guardian, and must submit regular reports. If the financial manager is not meeting these requirements, the individual who applied for the order (or anyone else) can apply to the Tribunal for a variation of the order.

Step by Step Process for Applying for an FMO

a.      Prepare an Application for Financial Management Order. The form is available on the NCAT Guardianship Division website. You may wish to have a finanacial management lawyer prepare the application for you.

b.      Obtain a medical report to support your Application. There is a form available on the NCAT website which a doctor or other health practitioner can use if they wish. Alternatively, a report can simply be prepared by the doctor setting out the person’s condition and the doctor’s opinion.

c.      File the Application and the supporting medical report(s) in the Tribunal Registry.

d.      A Tribunal Officer will contact you if there is any other information needed.

e.      You will be advised of a hearing date (or in a complex case there may be a directions hearing set, which is a short preliminary hearing to determine what may be required to occur before the hearing.

f.      Attend at the hearing. You may wish to have a financial management lawyer appear for, or with, you. There is no right to have a legal representative appear for you in the Tribunal – permission needs to be given by the Tribunal for this to occur. On the other hand, a lawyer can be present with you in order to provide you with guidance during the hearing (but not actively participate).

Why You Should Retain an Experienced Financial Management Lawyer

When dealing with a financial management application, it is important to have appropriate legal advice and representation. A financial management lawyer will be able to guide you through the process and make an appropriate application on your behalf to NCAT. A financial management lawyer will have an in-depth understanding of the legislation surrounding financial management applications and be able to guide you through the application process. An experienced financial management lawyer will be able to provide expert advice on the appropriate type of financial management order to apply for in the individual circumstance.  

Finding a Financial Management Lawyer in NSW

Finding a financial management application lawyer is essential to ensure that you are receiving the correct advice and applying for the correct FMO. Financial management is a specialised area of the law, and few legal practitioners have much, or any, experience with it. 

There are a number of ways you can find a financial management order lawyer in NSW. If you are on a low income, you could contact your local Legal Aid office to find out if you would qualify for Legal Aid. You could also consult with people you know who may have used a financial management lawyer in the past. 

Brigitte Simeonides has extensive experience in this area of law – call her on (02) 9533 2269 – to discuss your financial management lawyer needs