When decision-making capacity is lost, what happens next?

For many people, the loss of decision-making capacity does not happen gradually or with warning. It can arrive in an instant through a stroke or accident, or slowly through dementia or other progressive illnesses. One week you are paying your bills, organising your affairs and making plans with confidence. The next, you are unable to manage even the simplest financial task.

When that shift happens, families are often left trying to piece things together under pressure. Regular expenses still need to be paid. Care arrangements may need to be made urgently. There may be questions about pensions, NDIS supports, superannuation, property, or selling the family home to fund aged care.

In Victoria, this is an increasingly common reality. Dementia Australia and the Australian Institute of Health and Welfare estimate that around 110,600 Victorians were living with dementia in 2025. That figure is expected to grow significantly as the population ages. Across Australia, about 433,000 people are living with dementia, alongside many others managing acquired brain injuries, mental health conditions, or chronic illnesses that affect decision-making capacity.

The emotional toll on families can be significant. At a time when loved ones are coming to terms with a diagnosis or sudden health event, financial matters can quickly become overwhelming. Missed payments, mounting debts and rushed asset sales can compound an already stressful situation.

When there is no plan in place

Without formal arrangements, families often have limited legal authority to step in. Even with the best intentions, informal arrangements can create conflict, uncertainty and personal risk.

In many cases, the only option is to apply to the Victorian Civil and Administrative Tribunal for a financial administration order. While designed to protect vulnerable people, the VCAT process can be complex and time consuming. It requires medical evidence, formal hearings and detailed assessments. Meanwhile, everyday expenses continue and financial decisions cannot be delayed indefinitely.

Where families are blended or relationships are strained, disagreements about money management can escalate. In the absence of clear instructions, misunderstandings or even financial exploitation may occur.

Planning ahead creates certainty

The uncertainty can often be avoided through early planning. Putting clear arrangements in place before capacity is lost provides reassurance for you and clarity for those around you.

State Trustees Victoria, a Victorian Government backed organisation with more than 85 years of service, supports individuals and families through these transitions. Since 1940, they have assisted hundreds of thousands of Victorians with estate planning, financial administration and related services.

A key safeguard is an Enduring Power of Attorney (Financial). This legal document allows you to appoint someone you trust, or a professional organisation such as State Trustees, to manage your financial and legal affairs if you lose capacity. You determine how and when the authority begins, whether immediately, at a nominated time, or only once medical evidence confirms incapacity. You also set the scope of powers, from paying routine bills to managing investments or selling property.

Appointing a professional can remove some of the emotional pressure that family members may face. State Trustees operates with government oversight and accountability, ensuring decisions are made impartially and in accordance with Victorian law.

With a team of approximately 600 professionals based in Footscray, Dandenong and Bendigo, and will writing services centralising in the Melbourne CBD from January 2026, State Trustees manages the practical details. This includes paying bills, preparing tax returns, securing entitlements through Services Australia, Centrelink, the Department of Veterans’ Affairs or NDIS, negotiating aged care fees and bonds, managing debts, and overseeing property maintenance or sales where required.

The aim is to protect assets while ensuring the person retains access to funds for personal needs, interests and everyday comforts.

Support when capacity is already lost

If a person has already lost capacity and no Enduring Power of Attorney exists, State Trustees can be appointed by VCAT as a financial administrator. In that role, they develop budgets, pay rent or residential aged care fees, collect income, manage legal matters such as TAC or WorkCover claims, and where possible, support a pathway back to financial independence.

Families often describe a sense of relief once structured support is in place. Financial decisions are documented, explained clearly and handled professionally, reducing the risk of conflict and easing the burden on carers.

State Trustees has no private shareholders. Its focus is on serving the Victorian community. Fees are transparent and outlined upfront, with government funding helping to maintain affordability. Operations are governed by legislation including the Guardianship and Administration Act 2019, reinforcing high standards of integrity and oversight.

Where personal or medical decisions are also required, State Trustees works alongside the Office of the Public Advocate to ensure coordinated and comprehensive support.

Navigating aged care finances

Moving into aged care can introduce another layer of financial complexity. Means tested care fees, accommodation payments, daily charges and ongoing assessments can strain family resources.

State Trustees assists by reviewing entitlements, negotiating arrangements, and ensuring payments are managed correctly and on time. This allows families to focus on maintaining relationships and supporting wellbeing, rather than navigating administrative processes.

Planning for the possibility of incapacity is not about expecting the worst. It is about maintaining control over your future and reducing uncertainty for those close to you.

If you are in your 50s, 60s or older, or supporting ageing parents, now is the time to consider what arrangements are in place. Waiting until a crisis occurs can limit options and increase stress.

Contact State Trustees today for a no obligation, no cost initial discussion

-Call 1300 138 672 or visit statetrustees.com.au to explore Enduring Powers of Attorney, financial administration, or related services.

A small step now can bring lasting peace of mind for you and those you love.