Have you thought about what would happen if you lost capacity?
People are living longer these days, and incapacity is on the rise as a result. You need to think about how your affairs are dealt with if you lose capacity (due to accident or illness, for example). Who will be responsible for keeping your financial affairs in order? Who will be responsible for consenting to your medical care and treatment? And who will decide where you will live?
What documents do I need?
You need documents to delegate personal/health decisions and financial decisions to your chosen substitute decision makers. In a number of States, such as Queensland and Victoria, this is done in one document, called an Enduring Power of Attorney (EPOA). In New South Wales, the EPOA only covers the delegation of the financial power, and the Enduring Guardian document is additionally required to deal with personal and health matters. Each State has a different document so it is important that you have the right ones in place to cover both financial decisions and personal/health decisions in your State.
For financial decisions you can typically specify when the power is to commence (for example on your incapacity, or earlier to cater for say, an absence overseas). For personal and health decisions, your substitute decision maker can only make decisions on your behalf once you have become incapacitated.
These important legal documents must be carefully drafted, taking into account your particular circumstances and requirements, to protect you and your lifestyle in the event that you can no longer make decisions for yourself.
Are all Enduring Powers of Attorney created equal?
Not all Enduring Powers of Attorney are created equal. While you can download a template form from the Internet, it is the advice you receive about who you nominate and how you detail the powers to make decisions by your selected decision makers that will make a big difference to how protected you are if you ever lose capacity.
Examples include provisions regarding whether your selected decision makers are allowed to benefit from your assets, such as living in your home or using funds for their own benefit. The law does not allow substitute decision makers to benefit from your assets once you are incapacitated (except in certain circumstances) without special clauses included in the EPOA. You also need to consider whether you want to give your decision makers power to renew or create superannuation nominations, including nominating themselves and whether they can withdraw your super early, and so on.
Let us safeguard you
It is a good idea to have a thoughtful legal conversation on how you want your health and your financial affairs to be dealt with on your incapacity and what you are happy to allow or not allow your delegated decision makers to do.
At Estate First, we specialise in preparing Enduring Powers of Attorney for our clients which include these important additional provisions not included in the ‘shell’ form. These documents are increasingly relied on by doctors, banks and super funds when you are no longer able to make decisions for yourself. Please contact us to discuss how we can best draft this document for you.
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Frequently Asked Questions
What is an enduring power of attorney?
In QLD, an Enduring Power of Attorney (acronym EPA or EPOA) is a document which allows you to appoint people of your choosing to make financial and personal/health decisions on your behalf.
In NSW, you can prepare an Enduring Power of Attorney to appoint people to make financial decisions on your behalf and an Enduring Guardian to appoint people to make personal and health decisions on your behalf.
In VIC, you can prepare an Enduring Power of Attorney to appoint people to make personal and financial decisions on your behalf and an Enduring Power of Attorney (Medical) to appoint people to make health care decisions on your behalf.
In all Australian states, the Enduring Power of Attorney is most commonly used in the situation where you lose capacity to be able to make or communicate decisions for yourself, and you need other persons to be authorised to make those decisions for you.
Why do I need an enduring power of attorney?
Having a well drafted Enduring Power of Attorney (EPOA) document in place allows you to decide who you would like to handle your affairs if you were to lose capacity. In some states, such as QLD and VIC, the power of attorney covers both your personal/health and financial affairs. In other states, such as NSW, it only covers financial affairs and you will additionally need in that state an Enduring Guardian for your personal/health affairs.
Having a well drafted, well thought through EPOA provides you with the peace of mind knowing that the right people will be making decisions for you if required.
You cannot make an EPOA once you have lost capacity. You and your family will have to fall back on the legislation in your particular state or territory as to who will make decisions on your behalf and be subject to the rules and regulations it prescribes, which are often restrictive.
In Qld, if you do not have an EPOA in place and you lose capacity, certain family members are automatically recognised by law as ‘statutory attorneys’ and can, therefore, make health care decisions for you. You have no say in who those persons are and they may not be the persons you would have selected.
In terms of your financial affairs, if you lose capacity and do not have an EPOA in place, your family or friends may need to apply to the Queensland Civil and Administrative Tribunal to be appointed as your Administrator in order to handle your financial affairs (such as selling your home to fund your entry into a nursing home, for example).
Similarly, in New South Wales and Victoria, if you do not have a valid EPOA document in place, then your loved ones may need to apply to the relevant state Tribunal to be authorised to act on your behalf if required. Again, they may not be the persons you would have selected or want making decisions on your behalf.
What types of decisions can my attorney make on my behalf?
In Queensland, you can appoint an attorney to make financial decisions for you (such as selling your property and making investment decisions on your behalf) as well as personal decisions (such as where you will live and what services you will receive) and health decisions (such as consenting to operations and medical treatment).
In New South Wales, an attorney appointed under an Enduring Power of Attorney document can only make financial decisions for you, and they are not authorised to make personal or health decisions on your behalf. You will need to prepare an Enduring Guardian document to appoint a person as your guardian to make personal or health decisions for you if you lose capacity.
In Victoria, an attorney appointed under an Enduring Power of Attorney document can make financial and personal decisions on your behalf. They are not authorised to make medical decisions on your behalf unless they have been appointed as your medical treatment decision maker under a separate document.
What is a ‘Living Will’?
A ‘Living Will’ is not a legal term, and it can refer to a number of documents – but most commonly a ‘living Will’ refers to a document that contains your wishes regarding health/personal/financial matters if you are still living, but have lost capacity. The two main forms of document that contain such wishes are health/medical directives and power of attorney/enduring guardian.
In Queensland, these documents are an Advance Health Directive (for certain medical instructions about your future health care) and an Enduring Power of Attorney (appointing your choice of decision maker to handle your personal/health and financial affairs).
In New South Wales the relevant documents are Advance Care Directive (for future medical instructions – but not binding), an Enduring Guardian and an Enduring Power of Attorney (to select a decision maker for financial affairs).
In Victoria, the relevant documents are Advance Care Directive (for future medical instructions but not binding) and an Enduring Power of Attorney (to select decision maker/s for personal/health and financial affairs).
What are the benefits of having an Enduring Power of Attorney document professionally drafted?
An Enduring Power of Attorney (EPOA) is a critical legal document in your estate plan, that gives your selected decision makers (called ‘attorneys’) a great deal of power over your affairs. In many ways, it is just as important as your Will, if not more so, because the decisions made under the authority of the EPOA affect you while you are still living. It should, therefore, be carefully drafted, considering all of your circumstances, including family circumstances, how you want your assets to be handled, and dealing with any business interests (including any trusts and companies you are involved with).
Special financial terms may need to be included to ensure that your attorneys are able (or not able) to enter into certain transactions on your behalf, for example accessing your super, making binding death benefit nominations, etc. Your Enduring Power of Attorney should also be drafted in conjunction with a consideration of your Will, so that an attorney (whether inadvertently or otherwise) does not deal with your assets in a way that spoils the gifts in your Will (e.g. selling your house which was gifted to your children in your Will, etc.)
Estate First Lawyers can assist you with drawing up an effective and appropriate EPOA for a fixed fee that is tailored for your particular requirements.
What is the difference between an enduring power of attorney and an advance health directive in Queensland?
In Queensland, an Enduring Power of Attorney (EPOA) allows you to appoint people as your attorney to make financial and personal/health decisions on your behalf. An Advance Health Directive (AHD) is a legal document that allows you to pre-emptively outline what medical treatment or health care you do or do not wish to receive in certain circumstances (for instance in the terminal phase of an illness) if you are no longer capable of making these types of decisions for yourself.
The AHD does not cover personal decisions (such as where you will live, what services you will receive and routine day to day decisions) and financial decisions (such as investing your assets and selling your property). These types of decisions are covered under the Enduring Power of Attorney document.
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