Powers of Attorney
What is a Power of Attorney?
A Power of Attorney is a legal document which appoints one or more people to look after your financial affairs on your behalf while you are still alive.
Many people appoint their spouses or adult children to act as their Attorneys. Other people appoint sisters, brothers, parents or trusted friends. Often, more than one Attorney is appointed – for example, two Attorneys may be appointed to act jointly, or one Attorney may be appointed with another one as a backup.
Powers of Attorney come in two common types:
- Enduring Power of Attorney; and
- General and Enduring Power of Attorney
Enduring Power of Attorney
An Enduring Power of Attorney gives your Attorney(s) the power to look after your financial affairs only if you lose mental capacity – for example, if you suffer from Alzheimer’s disease and are no longer capable of making financial decisions.
In this situation, the appointed Attorney will usually have to obtain one or more medical reports to certify that you have lost mental capacity, before he or she will be able to assist with your financial affairs.
General and Enduring Power of Attorney
This is the most complete Power of Attorney. It means that the person Appointed has the power to act on your behalf at any time, whether or not you later lose mental capacity.
This can be an invaluable tool where a person is unwell, frail or mobility impaired, and needs help with going to the bank or doing their grocery shopping. For that reason, the General and Enduring Power of Attorney is our preferred option for most of our clients.
Role and Responsibilities
Your Attorney(s) must look after your personal and business financial affairs on your behalf. State Law imposes strict legal duties on your Attorney(s) to act in your best interests.
Attorneys are authorised to do many things on your behalf, including to:
- open and operate bank accounts;
- sign cheques, and execute deeds and other legal documents;
- purchase and sell shares, and invest moneys;
- grant leases and receive rent;
- borrow money and pay debts;
- purchase and sell land; and
- perform contracts and carry on business.
Why is a Power of Attorney important?
It is just as important to have a Power of Attorney as it is to have a Will.
If you become very sick or lose mental capacity but you don’t have a Power of Attorney, then no one has any power to deal with your finances until after a formal application is decided upon by the Guardianship Board or Supreme Court.
This will cause significant disruption and expense for you and your family. It may mean that many of your assets will become frozen, including assets owned by you in Self Managed Super Funds, Companies and other Trusts.
Advance Care Directive
What is an Advance Care Directive?
An Advance Care Directive is a document appointing a person to make medical and lifestyle decisions on your behalf. Advance Care Directives replaced the former “Powers of Guardianship” and “Medical Powers of Attorney” in South Australia as at 1 July 2014.
When you are too ill or in a serious accident and are unable to make your own decisions, a Substitute Decision-Maker will make those decisions on your behalf. Your Substitute Decision-Maker will be the person who is consulted to consent to medical treatment, or to decide whether or not to switch off a life support machine.
Your Substitute Decision-Maker will also make decisions about your lifestyle care (such as choosing a nursing home), if you have lost the mental capacity to make these decisions yourself.
It is highly desirable to appoint a person you trust, who knows you well and has known you for a long time, to act as your Substitute Decision-Maker.
Wishes and directives
In your Advance Care Directive document, you may choose to specify any wishes that you might have as to your lifestyle and medical treatment. For example, you can specify:
- that you do/ do not wish to be resuscitated or kept alive on life support, if you are in a persistent vegetative state;
- that you do/ do not wish to be an organ and tissue donor; and
- any cultural, religious or other lifestyle preferences you may have.
Why is an Advance Care Directive important?
Many nursing homes and residential care facilities will not accept a new resident who does not have an Advance Care Directive. However, Advance Care Directives are not just for the elderly.
If you don’t have an Advance Care Directive in place, you will risk a dispute between family members (e.g. your spouse and your parents) as to who should make decisions about your medical treatment and day-to-day care. It should be up to you to appoint the person who you want to make those decisions.
Without any directions or wishes set out in your Advance Care Directive document, your family may be unaware as to your wishes for medical treatment, which will make it much more difficult for them to make these critical decisions on your behalf.
The Advance Care Directive makes it easy for others to know what your wishes are when you are unable to make these decisions yourself. It also gives you peace of mind to know that your wishes are known and will be respected, if others need to make decisions for you.
Katrina Jacobs Estate Law can advise upon these documents and prepare them on your behalf along with your Will.