DO IT WHILE YOU STILL CAN
Life can throw all manner of things at us. Through either accident or illness we may become temporarily or permanently unable to make decisions for ourselves. We only need consider the effect of a stroke, mentally illness, or brain damage as a result of an accident.
These are not pleasant thoughts, but if it does happen to you, you need to have something in place so that someone else can legally make decisions for you – the world does not stop if something happens to you – bills keep coming and your super, investments and/or property still need managing.
An Enduring Power of Attorney allows you to give a person or persons of your choice the authority to make decisions on your behalf if you become incapable of conducting your affairs. This ability can be extended in other ways if you become unable to tend to your affairs if, for example, you suffer a physical disability limiting your mobility or simply because you are overseas or out of town. By granting an Enduring Power of Attorney, a representative can conduct your affairs on your behalf according to your wishes.
What does it cover?
An Enduring Power of Attorney generally covers financial and legal matters, including the power to sell property. Even though you appoint an Enduring Power of Attorney to cover these matters you have the power to put conditions or restrictions on what decisions can be made on your behalf.
An Enduring Power of Attorney is important as it can cover crucial decisions which need to be made on financial or legal matters when you are not able or interested to make those decisions yourself.
Who should you appoint as an Enduring Attorney?
The short answer to this question is – appoint someone you trust.
The person or persons you appoint is or are making decisions for you while you may be unable or not interested to do so, therefore it needs to be someone you trust. It can, but it does not have to be, a professional such as a lawyer or accountant. A relative or friend could also fulfil this role. In fact they can be the most logical choices when considering who would best know your interests.
You can appoint one or more people, i.e. You can appoint different people for different things.
If you appoint more than one attorney you need to consider whether you appoint them as Joint or Joint and Several Attorneys.
- If you appoint them as Joint Attorneys:
- they can only do things for you if both sign off on the thing to be done (for instance for bank transactions, the Bank would require both signatures); and
- if one dies or ceases to be capable of acting, then the other Attorney cannot act alone unless they apply to a Court or Tribunal for approval to do so. However, suitable wording can overcome this problem.
If you appoint them as Joint and Several Attorneys:
- either of them can act independently to do things for you; and
- if one dies or ceases to be capable of acting, then the other Attorney can continue to act alone.
You could also appoint an Alternate Attorney who could act if your appointed Attorney becomes incapable of making decisions or has died.
As they will make decisions for you, it is a good idea to discuss your wishes with your Attorney’s both generally and in specific situations so that they will know what your wishes are.
Who you appoint as an Attorney must:
- be at least 18 years old;
- be of sound mind, that is, they must also have the capacity to make decisions; and
- agree to be your Attorney.
When does it come into effect?
You generally have the ability to nominate whether you want the Enduring Power of Attorney to come into effect immediately or only when, or if, you are incapable of making decisions.
What are the formal requirements?
All states and territories require the person making the appointment and the person/s being appointed to have full legal capacity at the time of the appointment. This means all parties must be over 18 years of age and have the mental capacity to make decisions.
The person you appoint must accept the appointment as Attorney.
If you grant your Attorney power to sell property this will need to be registered with the relevant state or territory land titles office.
There are other formal requirements (both as to form and witnesses), but these vary between states and territories. You will need to check your own state or territorys requirements.
What must the appointed Attorney do?
Firstly, the person you want to appoint as your Attorney must agree to being appointed. If they agree, once they are appointed they have certain legal duties. They must:
- consider your interests when making decisions as your Attorney;
- take care of your property;
- avoid conflicts of interest; and
- if necessary, prove that they have been appointed as your Attorney.
Both the decision to act as an Attorney and the legal duties which come with it are significant. Your choice of person and their acceptance of this role needs to be considered carefully.
Does an Enduring Power of Attorney last forever?
You have the ability to revoke your appointment of an Enduring Power of Attorney at any time. It can be done in a number of ways including a Revocation. For further information, contact us.
It is also important to note that an Enduring Power of Attorney ceases upon the Appointers death. Once a person dies, the provisions made in their Will or, if the person dies without a Will, the intestacy provisions, will decide how the estate is distributed.
What do I do now if I want to set up an Enduring Power of Attorney?
Note that a Power of Attorney is only valid for the state in which you live. If you have assets in another state, a Power of Attorney effective for that state will be needed.
An Enduring Power of Attorney should be an important step in protecting your assets and finances against whatever life throws you in the future.
What do I do if my Enduring Power of Attorney does not cover medical or personal matters?
Generally, if decisions about medical matters are not allowed to be made under an Enduring Power of Attorney then they can usually be made under a Living Will or an Enduring Guardianship.
Living Wills (also known as Advance Health Directives, Medical Directives or Declarations) allow you to set out in advance decisions about future treatment that you will, or will not, accept if you lack the capacity at the time to consent to it.
An Enduring Guardian can be nominated by you in advance (or appointed by the Court or a Tribunal for times when you lack legal capacity to make decisions). Enduring Guardians, like Enduring Attorneys can be subject to restrictions on the power that you grant to them. Enduring Guardians can also be given the power to make decisions about other personal matters such as your long term living arrangements, and can also cover decisions about medical treatment and decisions about dental, medical or surgical procedures, appropriate long term care or whether and when a life support machine is switched off.
There are formal legal requirements which must be met for these documents. It is highly advisable to get sound legal advice if you intend to appoint an Enduring Guardian or make an Advance Health Directive so that you can be sure it will apply only in the circumstances you want it to.
Contact us for any further information or to set up an appointment on Newcastle (02) 4941 8999 or Central Coast (02) 4367 2600.