Having exact identification is critical

A reader recently wrote to me about his mother, who is 93 and living independently in Australia, but was born in Poland. They needed to draw money from her account to pay for aged care, but the name on her bank account is different from the name on her legal documents. For privacy reasons, let's call her Magorzata, which is the Polish version of Margaret.

The savings account has been in the name of Margaret for years. But when the bank carried out the identity check that is now required, her documents did not match. She has no current photo ID: no passport, and no driver's licence. All she has is a Medicare card and a pension card, neither of which includes a photograph. After a somewhat robust discussion with the bank, it finally accepted a combination of her Medicare card, Centrelink card and electricity bill.

These problems crop up in many areas. In everyday life, many people with names that are unfamiliar to English-speakers, or simply long by English standards, keep their full legal surname but use a shortened version for convenience on bank accounts, email addresses and informal records. For example, a surname such as Chandrasekaran might simply be shortened to Chandra. That can cause problems later, when institutions require an exact match with legal documents.

That may sound like a minor administrative issue, but it becomes serious when money, health decisions or estates are involved. In those situations, exact identification is not just helpful, it is critical. Any inconsistency can cause delays, disputes and significant expense.

My legal friends tell me that they regularly see applications for probate held up because the deceased's name on the will does not match their name on the death certificate. We once knew someone who called herself Marie, but whose other names on her personal papers ranged across Marie Anne, Maree Anne and Marie Ann. And the wildcard here is potential for hyphens to make it even more complicated.

And there is another major issue that is often forgotten: access. Just recently, I heard about an old bloke who had made his enduring power of attorney, advance health directive, and will. He then very carefully locked them in a safe deposit box at his bank. Sadly, this meant they were inaccessible to anyone but him without getting some kind of court order, which involved time and money.

The lesson to take from this is to make sure your family know where these documents are and how to get them. This applies particularly to the document that sets out your wishes if you become seriously ill or incapacitated - called an advance health directive in Queensland, but going by various names in other states. To be of use, these must be readily accessible when you suffer an accident or acute illness.

Remember too that a major part of your estate planning should include an enduring power of attorney. This gives specified people, normally family members, the right to make financial decisions on your behalf if you are unavailable, in poor health or, as we see increasingly, losing decision-making capacity. Unfortunately, these are often signed and filed away with other estate documents until an unexpected event happens and the document is required urgently. But it's always a good idea to test the document long before you need it.

Recently, I heard of a widow who had given her son and daughter an enduring power of attorney. When they needed to withdraw $500,000 from a bank account to pay a residential aged care bond, they got a shock when the bank said the document was invalid. The widow had given her two children power to act for her, but because they had signed first, the bank held the document was invalid, as it's not legally possible to accept the power before it's given.

Legal advice was that it could be fixed by having the attorneys re-sign the paperwork. However, the bank would not accept that view, and a legal debate ensued. In the end, they had to go to court.

It's a reminder not to take estate planning for granted. Long before documents are needed, make sure they exist, can be found, will actually work when you need them, and that names are consistently spelt on all the relevant records.