Many of us have heard the phrases “my Power of Attorney” or “my Guardian”. Perhaps you have even been advised to look into putting these documents in place. But do you know what they mean, and what’s the difference?
A Power of Attorney is someone (or multiple people) who can stand in your shoes and carry out your financial transactions on your behalf. Sometimes people who travel overseas frequently or those who are unable to get out of the house need to have such a stand-in to look after their property transactions or finances. More usually, provision is made for an Attorney as part of an estate planning exercise, often alongside a will, when a person is organising their affairs for retirement or old age. Such an appointment can take effect straight away or limited to only take effect if and when you are certified in writing by a registered medical practitioner to be unable to manage your own financial affairs.
It is often recommended at the same time that a Guardian be appointed. Your Guardian is someone who would be able to make health care, personal care and living arrangement decisions, and give consents to medical and dental treatment in the event that you are unable to or do not have the mental capacity to make these decisions for yourself.
Deciding who to appoint
Firstly, you can appoint one person or more than one person and you can direct whether they should act separately or jointly.
Secondly, it makes sense to appoint people younger than yourself as it is not helpful if your attorney and guardian has lost capacity before you! It is possible to appoint someone, for example your life partner, then specify that if that person is incapacitated, you can appoint another person or persons to act instead. These back up people are referred to as “alternates” or “substitutes.”
Thirdly, it is sometimes advisable to appoint different people as the Attorney and the Guardian: a person who has great financial skills may not be too good at making personal care decisions or vice versa.
Lastly, and most importantly, you should appoint people that you trust to make decisions in your best interests.
Simple verses ‘enduring’ Powers of Attorney
Powers of Attorney may be simple or ‘enduring’: the former has effect only until you lose the ability to properly make your own decisions whereas the latter endures or continues even though you have lost capacity.
Of course, most people are looking to cover a time when they might not be able to make their own decisions so want the latter type.
On the other hand, Appointments of Guardian are always enduring – that is, they take effect from, and continue when, you have lost capacity. There are additional safety measures in place to cover enduring appointments meaning that these have to be explained and witnessed by a lawyer or specified public officers to ensure that you understand what you are doing.
A Power of Attorney, Enduring Power of Attorney and an Appointment of Guardian all cease to operate in the event of your death. On death, the person appointed pursuant to your Will as executor has the power to deal with the assets of your Estate.
These appointments can only be made by a person who still has the mental capacity to act for themselves, so don’t leave it too late. Contact us on 9976 5222 to put in place these documents for your eventual old age and then go out and live your current life to the full!
This information and information published on our website and social media sites is general in nature and for information and entertainment purposes only. This information does not constitute legal advice and should not be relied upon as such. If you require legal advice which takes into account your personal circumstances, please contact us for an appointment.