Putting aside what your children may assert, one day you may be asked this question and you’ll get the answer wrong – along with most other things. But it’s not just loss of mental capacity due to the ageing process that you need to consider and make plans to address. It’s more immediate than that.
Whether due to absence overseas, illness, accident or mental incapacity, one day you may need to have authorised a close friend, family member or trusted advisor to make decisions on your behalf about legal and financial matters or your medical care.
There are various types of powers of attorney you should consider. Some cover legal and financial matters; others cover welfare and health issues. The form and content varies from state to state, but one thing remains constant – you can only appoint an attorney when you have the mental capacity to do so. Accident, disease or the ageing process can rob us of capacity so it’s best to organise your powers of attorney now, before it’s too late.
What happens to my assets if I am unable to manage my financial affairs?
You are the only person who has the right to make decisions about your assets. This means that if you are ever unable (for whatever reason) to manage your own financial affairs, your assets will be effectively frozen unless:
- you have previously authorised another person to look after your finances on your behalf by signing a power of attorney, or
- another person applies to the relevant board, court or tribunal in your state for an order allowing him or her to handle your finances
What is a general power of attorney?
A general power of attorney allows your attorney to act on your behalf in relation to any financial transactions.
It can be useful during temporary absences such as overseas travel and ensures your financial affairs are looked after. However, if you become incapable of providing your attorney with clear instructions, this document will automatically cease to function.
What is an enduring power of attorney?
An enduring power of attorney continues to apply even when you are no longer capable of making decisions or providing your attorney with instructions.
This can be useful to cover potential future permanent problems such as mental or physical incapacity. In that event, your attorney will become your financial ‘guardian’ and conduct your financial and legal affairs on your behalf.
It is important to remember that an enduring power of attorney is legally effective from the moment that you sign it, unless restricted by you.
This means that the signature of your attorney is accepted by all organisations such as banks, on presentation of the power of attorney – even if you are still capable of managing your own affairs and you do not wish your attorney to act on your behalf.
You should therefore think very carefully about whom you wish to appoint as your attorney, as unscrupulous persons can act fraudulently and it may be very difficult to recover assets misappropriated by your attorney.
What do medical powers of attorney cover?
In a medical emergency, doctors do not need to get consent for your treatment. However, in a non-emergency situation, doctors will often ask for your consent prior to treating you.
An ‘enduring power of attorney (medical treatment)’ will allow you to appoint someone to make medical decisions when you are no longer capable of making such decisions personally. You may appoint anyone you like. Slater & Gordon can help. Its wills, probate and estate litigation practice can work with you to help you choose the appropriate person to make these decisions for you and to choose the types of treatment you may wish to refuse or accept.
It is important to note that an enduring power of attorney (medical treatment) does not permit your attorney to refuse you reasonable medical procedures for the relief of pain, suffering and discomfort or the reasonable provision of food and water. Although your attorney can refuse other forms of treatment.
You should also know that the decision of your attorney may be overridden by the relevant guardianship tribunal or board under certain circumstances.
When a person is mentally incompetent or incapacitated, they may need an administrator to manage their financial affairs or a guardian to make decisions about their welfare, particularly if that person does not have a valid power of attorney.
If you wish to be appointed administrator or guardian for a close friend or family member who is in the unfortunate situation of being unable to cope with their affairs, to ensure that decisions are made carefully and sensitively, and that the needs of your loved one are properly met.
Slater & Gordon has extensive experience resolving disputes including varying or revoking existing orders. For example, somebody inappropriate has been appointed a guardian or administrator or in the event of a change of circumstances which mean a person becomes able to manage his or her affairs after a period of time.
What is an enduring power of guardianship?
Enduring powers of guardianship authorise another person to make lifestyle decisions on your behalf if you become incapable of making reasonable judgements about your personal circumstances.
Enduring powers of guardianship are essentially the same powers a parent has over his or her child and include:
- deciding where and with whom you live
- deciding whether or not you are permitted to work
- restricting access by visitors if the guardian believes that they would have an adverse effect on you
You may limit your guardian’s authority and you may also specify any considerations that you wish your guardian to take account of when exercising his or her powers.
Advanced Health Care Directive (living will or end of life decisions)
Everyone has a right to accept or refuse medical treatment. An advanced health care directive is a document that sets out your preferences for medical treatment.
Commonly, an advanced health care directive will
- set out limitations on treatment you wish to have or indicate that you wish to have full measures to prolong life
- stipulate medical treatment preferences, including those influenced by religious or other values and beliefs
- identify circumstances unacceptable to you arising from applying life-sustaining treatment
- identify how far treatment should go when your condition is ‘terminal’, ‘incurable’ or ‘irreversible’ (depending on terminology used in specific forms)
- nominate a ‘person responsible’ who consults with treating doctors concerning your wishes when you can’t
- include other non-medical aspects of care that are important to you during your care
NOTE: if you have appointed a guardian or medical attorney, they are generally bound by any directives contained in your health care directive
Talk to those who can help
If you would like more information about how Slater & Gordon can help you prepare an advanced health care directive, contact Slater & Gordon by calling 1800 555 777