What exactly is a Power of Attorney?
A Power of Attorney is a legal document that you use to appoint someone (called your attorney) to act on your behalf and to be your decision maker in certain situations.
You can make it clear that you only want your attorney’s authority to start if, and when, you become incapable of making your own decisions. Until that happens, if it does, you do not lose any of your rights to make your own decisions about your property, money and personal affairs.
Who should I appoint as my attorney?
You should choose someone who is suitable and willing to take on this role. And who you trust to make decisions for you in your best interests. Your attorney does not have to be a solicitor or lawyer. It can also be a family member, close friend, or government provided attorney.
You can appoint more than one person as your attorney. They can act either together or separately.
There are Government provided trustees and guardians who can act as your attorney for set fees.
Obtaining legal advice is important
You should have a legal professional give you advice about any Power of Attorney you are considering making. To explain your options, the duties of attorneys, and the legal consequences. Legal requirements vary depending on which jurisdiction you live in, such as the form you should use. And rules about signing, witnessing, registration and other formalities.
You can cancel a Power of Attorney at any time, provided you have mental capacity. But you must take certain steps to ensure the cancellation is legally valid. Remember that a Power of Attorney only operates while you are alive. It loses effect when you die. And your Will then comes into operation.
More information on general legal requirements can be found here.
Who can make a power of attorney?
Anyone over 18 can make a Power of Attorney. However, they must understand what they are signing.
A person in the early stages of dementia may still have mental capacity to make a Power of Attorney. If there is any doubt, you can obtain an assessment from an appropriate health professional.
What types of Powers of Attorney are there?
Generally speaking there are 3 main types and their differences are important. They are: Limited, General or Enduring.
So how are they different?
1. A Limited Power of Attorney limits your attorney’s power to act on your behalf to a very limited or specific purpose. Such as paying certain kinds of bills or selling your house.
2. A General Power of Attorney is usually given for a specific period of time. For example, if you plan to travel overseas or are going to hospital.
You can decide how much power or authority to give your attorney. Your attorney can only make decisions for you in property and financial matters. Not in personal, medical or lifestyle matters. It stops operating if you lose the capacity to make your own decisions.
3. An Enduring Power of Attorney will continue even after you have lost capacity. This is the one you should use if you want to give someone power to make decisions once you can no longer do so. Preparing an Enduring Power of Attorney can be an important part of your end of life planning.
This document usually appoints a substitute decision maker (your enduring attorney or enduring guardian) to manage your legal and financial matters. The powers granted may also include making lifestyle and accommodation decisions for you. But each state and territory of Australia deals differently with the granting of powers to make personal and medical decisions. Some States require that these come under a completely separate legal document. So be sure to obtain legal advice in the State or Territory you reside in. Note that this document only comes into effect if, and when, you are no longer mentally or physically capable of making all these decisions yourself. Until then your enduring attorney only manages these matters in accordance with your instructions.
For more information and advice on end of life planning, visit Anticipate Life.
What happens if I lose capacity and don’t have an Enduring Power of Attorney?
Then nobody will have legal authority to make decisions about your property and finances.
It may be difficult for your loved ones to even access your bank account to pay your medical or other bills. Or to manage the sale of your home if these funds are needed. For example, to cover the cost of you moving into a care facility. Only someone with your Enduring Power of Attorney will be able to do these things.
A relative may need to make a legal application to have a financial manager appointed for you. But this may not be the person you would have chosen.
To have some say in the control of your financial and personal affairs decisions, consider appointing a Power of Attorney. And if you also wish to record your wishes for your end of life medical treatment? You can consider making a Living Will (also known as an Advance Health Care Directive or similar name).
For more information on Living Wills, you can read our blog post on the topic.