If you would like someone such as your spouse, partner or a family member to act on your behalf and manage your affairs, then you can give a person these powers under a Power of Attorney (POA).
If you ever suffer a serious illness or accident and are unable to speak for yourself and you don't have an Enduring Power of Attorney in place, then a Court can appoint someone to manage your affairs. If this happens, you will have little say and no control over the process. An Enduring Power of Attorney allows you to choose the person that you want to handle your affairs, for a time in the future when you will be most vulnerable.
A Power of Attorney is a legal document that a person uses to appoint another person (called an 'Attorney') to manage their affairs, make decisions and sign documents on their behalf. Depending on the type of Power of Attorney, this may include the power to control your financial, legal, medical and personal affairs.
A person that appoints another person to make decisions on their behalf is called the 'Principal' (or in some states, the 'Donor'). The person that is appointed to act on another person's behalf is called an 'Attorney.' This is an expression and it does not mean that the person is a Solicitor or Lawyer.
In general, there are 2 main types of Powers of Attorney, a General and Enduring Power of Attorney.
A General Power of Attorney gives another person the power to manage your property, financial and legal matters for a limited time only. Things an Attorney can do under a General Power of Attorney include transferring property, signing documents and managing bank accounts.
A common use for a General Power of Attorney is giving a person the power to purchase land for you whilst you are overseas. If you want your Attorney to deal with land under a General Power of Attorney, then you must register the Power of Attorney with the land titles office in the state or territory where the land is held before the transaction.
A General Power of Attorney ceases to have effect if you become a person with impaired decision-making ability. A General Power of Attorney is known as a limited power because the power automatically ends once you are unable to make your own decisions.
Under a General Power of Attorney, you cannot appoint someone to manage your medical, health care or personal matters. Some examples of medical and health care matters include things like consenting or refusing particular medical treatment and legal matters relating to health care. Some examples of personal and lifestyle matters include things like deciding where a person lives, what they eat and what they wear.
An Enduring Power of Attorney (EPA) gives another person the power to manage your financial, legal, personal or medical matters and continues to operate if you become a person with impaired decision-making ability.
You can specify or limit the types of decisions you would like your Attorney to make under an Enduring Power of Attorney. For example, you can appoint a person to manage only your medical and personal matters and not financial or legal matters.
In some states, such as NSW, you cannot appoint a person to make medical or personal decisions under an EPA. You can appoint a person to make these types of decisions under an Enduring Guardianship. This person is then referred to as your 'Guardian' and not your Attorney.
An EPA can come into effect either immediately when you lose capacity, on a certain date or on the happening of an event.
You cannot make a Power of Attorney on behalf of another person. You can only make your own Power of Attorney. If you make a Power of Attorney for someone else (and you are not that person's Lawyer), it will not be valid. Appointing yourself as an Attorney under a POA is considered fraud and has very serious consequences, such as terms of imprisonment.
You must have capacity in order to make a valid Power of Attorney. This means that you are over 18 years of age and you know and understand what you are doing.
Capacity is a legal concept. A person is presumed to have capacity unless there is evidence to the contrary. If there is evidence to the contrary, then whether a person has capacity is a matter to be decided by a qualified person. The legal test that will be applied, is whether you:
know and understand what you are doing,
understand the decisions you are making and
understand the consequences of those decisions.
Capacity is also relevant in terms of when a power of attorney may begin and end. For example, an EPA will continue to operate if you become a person with impaired capacity, whereas a General Power of Attorney is automatically cancelled if this happens.
It is up to you to choose the person that you would like to appoint as your Attorney. You can appoint a friend, relative or other trusted advisor. Your Attorney must be:
Over 18 years of age
Someone that you trust
Able to understand what the appointment means
Capable of managing your affairs (i.e. be good with money)
Your Attorney must not be:
Bankrupt or insolvent
Your paid carer or healthcare provider
Your service provider at a residential retirement village.
MAKE YOUR POWER OF ATTORNEY NOW
This article contains information of a general nature only and is not specific to your circumstances. This is not legal advice and should not be relied upon without independent legal or financial advice.