WHAT ARE THEY? HOW DO THEY WORK? AND DO I REALLY NEED ONE?
A Power of Attorney is a document that enables someone to make decisions for you whilst you are alive. There are two types of Powers of Attorney, an Enduring Power of Attorney and a General Power of Attorney.
The first type of attorney is a General Power of Attorney. A General Power of Attorney is able to make financial decisions for you when you still have capacity however their power ends when you lose capacity or at a particular time or event as nominated by you. This type of attorney is a great option for people who are traveling overseas and still need documents signed or executed in their absence.
A recent client of mine was traveling overseas while his business was undergoing a refinance and restructure. He had already discussed the matter in detail with his business partner and the only matter that needed to be attended to in his absence was the signing of the finance documents, which were not ready prior to his departure. The General Power of Attorney granted his business partner the ability to sign these documents on his behalf while he was overseas and ensured the refinance and restructure was not held up (and more importantly, that he didn’t have to try to locate a notary public and sign and post documents while traveling).
The second type of attorney is an Enduring Power of Attorney. An Enduring Power of Attorney is a document that allows you to appoint up to four people to act as attorneys for you should you lose capacity and be unable to make decisions for yourself. They can make both personal and health decisions for you (e.g. talk to your doctors, move you into a nursing home, leave you on life support) as well as financial decisions. A big advantage with an Enduring Attorney, is you can elect when their powers are to commence.
For personal and health matters, a doctor will not talk to your attorney while you have the ability to make the decisions for yourself. From a financial perspective, you have the election to appoint someone to act immediately or when a medical practitioner certifies you to not have the ability to make the decisions for yourself.
The advantages of selecting an attorney for financial matters immediately can mean if you are overseas, unable to sign a document due to work or time restrictions or you are too physical unwell or unable to attend a place/ premises to sign a document, your attorney can attend in your place and sign for you.
Of course, this also comes with risks. By providing a spouse, family members or a friend with power of attorney you effectively give them full power to “step into your shoes” and make decisions as if they were you.
When choosing an attorney, it is important to choose someone you trust and someone who will look out for your best interests. It is also important your attorney knows important information regarding your beliefs and views (e.g. do you want to be kept on life support, is there a particular nursing home you want to go into, is there a particular doctor/ hospital you want to be treated at).
If you do not elect someone to act as your attorney, should you be unable to make decisions for yourself, a family member, spouse or friend will have to apply to the Queensland Civil Administrative Tribunal (QCAT) to be appointed as attorney. This process can be expensive for your family, spouse or friend and is time consuming. There is also a risk that someone who you would not have elected to act as attorney will be appointed, that the process of who should apply could cause conflict amongst those nearest and dearest to you, or alternatively, that the Public Trustee will be appointed.
This process can also lead to your family members second guessing themselves, not knowing your wishes and becoming more stressed in a time of crisis.
My motto has always been “it’s better to have one and never need to use it, then to not have one and need it.”
I strongly recommend anyone that doesn’t have a power of attorney, or hasn’t updated theirs in some time to seek legal advice and assistance in preparing one/ reviewing and updating one. When thinking about your current attorney, please remember there are certain factors that automatically revoke a document such as a marriage, divorce, death or bankruptcy.
If you would like any further information on estate planning, please feel free to contact BTLawyers
