Key Takeaways
- Power of Attorney (POA): A POA allows someone you trust to handle your financial and legal affairs on your behalf if you become unable to do so yourself. This ensures your bills are paid, your property is managed, and your legal matters are taken care of.
- Enduring Guardianship (EG): This legal document empowers someone you trust to make decisions regarding your health and personal care if you lose the capacity to do so yourself due to illness or injury. It covers everything from medical treatment to decisions about your living arrangements.
- Two Types of POA:
- General Power of Attorney: Appoints someone to act on your behalf, often for a specific purpose or time.
- Enduring Power of Attorney: Remains valid even if you lose mental capacity, making it essential for long-term care planning.
- Benefits of Having Both:
- Protects your finances and legal affairs: Avoids delays or complications in managing your affairs during emergencies.
- Ensures your healthcare needs are met: Appointing someone to oversee your health decisions ensures that your wishes are respected, and family conflicts are avoided.
- Peace of mind: Knowing that someone you trust is in charge of your affairs offers peace of mind for you and your family.
- How to Set Them Up: Both documents require proper legal formalities and must be signed in front of an authorised witness, such as a solicitor or public notary. Legal advice ensures these documents reflect your specific wishes.
When we think about our future, most of us imagine it being full of exciting plans, achievements, and dreams. However, there are also unexpected situations that can arise, such as an accident or illness which may leave us unable to make decisions for ourselves. In these moments, it’s important to have safeguards in place to ensure that our wishes are respected and that someone we trust is able to manage our affairs. This is where a Power of Attorney and an Appointment of Enduring Guardianship come into play.
These two legal documents are crucial for managing a person’s affairs during their lifetime if they become unable to make decisions on their own. The documents offer peace of mind, not only for the individual but also for their loved ones. Let’s break down what these documents are, why you need them, and how they can protect your future.
What Is a Power of Attorney?
A Power of Attorney (POA) is a legal document that allows someone (known as the “attorney”) to act on your behalf in relation to your financial or legal affairs. This means that if you’re unable to manage your affairs, for example transacting on property or going to the bank, the person you trust can make these decisions for you.
Types of Power of Attorney
There are two main types of Power of Attorney:
- General Power of Attorney – This is often used for a specific period or purpose. For example, if you’re going overseas for a few months, you may appoint someone to look after your financial affairs while you’re away.
- Enduring Power of Attorney – This type continues to operate even if you lose the mental capacity to make decisions. The ‘enduring’ power gives the attorney the authority to act on your behalf whilst you have capacity as well as if you become mentally incapable due to illness or injury. This is the most important type when it comes to long-term care and protection.
What Is Enduring Guardianship?
Enduring Guardianship is another important legal document that comes into effect during your lifetime and that allows someone you trust to make decisions on your behalf if you’re unable to make those decisions for yourself. These decisions are in relation to your lifestyle and health care decisions. This can include deciding on the medical treatment you may need to receive, your living arrangements, or your day-to-day care, such as whether or not you need help with basic tasks like bathing or dressing.
An Enduring Guardianship only comes into effect when you are no longer able to make decisions for yourself due to a loss of mental capacity such as through a serious injury, illness, or dementia. Medical evidence will need to be supplied to this effect in order for your appointed Guardian to act on your behalf.
Who Can Be Your Enduring Guardian?
In New South Wales, you can choose anyone you trust to act as your Enduring Guardian, provided they are over 18 years of age. This could be your spouse, a family member, a close friend, or someone else who understands your wishes and is capable of making tough decisions on your behalf.
You can nominate more than one person to be your Enduring Guardian, and they may act together or separately, depending on your preferences. You may also nominate alternative Guardians in case your first appointed Guardian is unable or unwilling to act in their capacity as your Guardian.
Why You Need a Power of Attorney and Enduring Guardianship
There are many reasons why having both a Power of Attorney and Enduring Guardianship is important. Let’s explore the most significant benefits.
- Protection of Your Finances and Legal Affairs
Without a Power of Attorney, there may be a delay or complication in appointing someone to help in case of an emergency. This could cause major problems, such as unpaid bills, difficulty accessing your bank accounts, or even legal disputes.
An Enduring Power of Attorney ensures that someone you trust can step in to manage these affairs on your behalf without delay if you become mentally incapable of managing your own financial or legal affairs.
This is especially crucial if you have a serious health condition such as dementia or Alzheimer’s disease. Having an Enduring Power of Attorney set up in advance means that your finances are protected, and your wishes are respected.
- Ensuring Your Health and Personal Care Needs Are Met
Having an Enduring Guardianship ensures that someone will be in charge of your health and personal care decisions if you are no longer able to make them yourself. This includes decisions such as which hospital or healthcare provider should care for you, the type of treatment you receive, and even decisions about whether to move you into an aged care facility or receive at-home care.
If you don’t have someone appointed to make these decisions, there may be confusion or even conflict among family members about what should be done, especially if there are different opinions about your care. Another risk is that the wishes you have in relation to your care won’t be followed.
Having an Enduring Guardian removes this uncertainty and ensures that the person you trust is in charge of making decisions according to your preferences and wishes.
- Giving You Peace of Mind for the Future
No one likes to think about the possibility of becoming unable to make their own decisions. But life can change unexpectedly, and it’s always better to be prepared. By setting up an Enduring Power of Attorney and Enduring Guardianship, you ensure that your affairs will be taken care of the way you want them to be, even if you can’t personally make decisions.
This preparation also offers peace of mind to your family members and loved ones, knowing that someone they trust is legally empowered to manage your affairs. This avoids the need for them to go through a lengthy legal process to take control, such as applying to the courts for Guardianship.
- Avoiding Family Conflicts
When a person is no longer able to make decisions for themselves, disagreements can arise among family members or friends about who should be responsible for their care. By choosing an Attorney and a Guardian ahead of time, you can avoid any confusion or dispute about who has the legal right to make decisions for you. This ensures smoother management of your affairs, both personally and financially.
- Helping with Complex Health Decisions
As we age or face medical conditions, we often need to make tough decisions, such as whether to undergo a particular medical treatment or whether we should move to an aged care facility. Having an Enduring Guardian means that someone you trust will be there to help make these tough decisions based on your preferences, even if you can no longer communicate them clearly.
How Do You Set Up a Power of Attorney and Enduring Guardianship?
Setting up both a Power of Attorney and an Enduring Guardianship is relatively simple, but it’s important to do it correctly to ensure the documents are legally valid.
Both documents will need to be signed in front of a witness who is authorised by law to witness such documents (e.g., a solicitor, a barrister, or a public notary).
It’s best to seek legal advice to ensure that the Power of Attorney and Enduring Guardian reflect your exact wishes and that they are drafted properly.
Conclusion
Having your Power of Attorney and Enduring Guardianship in place is one of the most important things you can do to protect yourself and your loved ones during your lifetime. They help you plan for the future, prevent family conflicts, and give you peace of mind, knowing that someone you trust will be there to manage your care and finances.
Don’t wait until it’s too late – make sure you have a Power of Attorney, and an Enduring Guardianship set up today. It’s one of the best ways to prepare for the unexpected and ensure that your wishes are respected, no matter what the future holds.
One of our experienced Estate Planning Solicitors can assist you with making sure your estate planning documents are drafted correctly and put in place to protect your and your family’s future. Please do not hesitate to contact our firm if you need assistance.
This blog was written by Solicitor,
Maxcine Taylor
Maxcine practices in the areas of Family Law, Wills & Estate Planning,
and Deceased Estates
