Power Of Attorney – What Is It And Do I Need One?
A Power of Attorney is a legal document that allows you to appoint someone to make important lifestyle, medical or financial decisions on your behalf. Any decision made by an attorney will have the same legally binding effect as if you had made that decision yourself.
These appointments come into effect either when you have lost legal decision-making capacity (due to illness or injury for example), or at a point in time you dictate, for example, you may wish for it to take effect on your 80th birthday.
A Power of Attorney can be either general or enduring.
A general attorney takes effect for a specified amount of time, for example, you may plan to spend 6 months overseas and would like someone to manage your financial affairs for you while you are away.
An enduring power of attorney continues indefinitely unless you renounce it.
A Power of Attorney document gives your attorney the ability to make significant legal decisions on your behalf and it is therefore wise to choose your Attorney carefully.
Why would I need a Power of Attorney?
There are several different types and they apply in different situations. The following are the most popular:
General Power of Attorney
As mentioned above, this appointment is for a specified period and usually for a specific purpose. For example, you may be selling a property and will be overseas at the time of the sale. A General Power of Attorney will allow your attorney to finalise the sale on your behalf. Importantly, the appointment will end as soon as the sale is finalised. Further, this appointment is subject to your mental capacity. If you lose capacity, any General Power of Attorney appointments you have made will cease to operate.
Enduring Power of Attorney
This allows your attorney to make financial and legal decisions on your behalf, such as sell your home, assist with your daily finances and pay your bills. This can take effect whenever you choose (but usually when you lose capacity) and only expires upon your death. The appointment is permanent once made, but you may revoke it at any time whilst you have capacity.
Appointment of Medical Treatment Decision Maker (previously called Enduring Power of Attorney (Medical Treatment))
This allows you to appoint someone to make medical decisions on your behalf when you become unable to do so. This includes decisions such as whether medication is given, and whether surgery or other procedures are undertaken or refused. This only takes effect when you lose legal decision-making capacity, either temporarily or permanently.
The title of the person you appoint is title “decision maker” rather than “attorney”.
When appointing a medical decision maker you should communicate to your decision maker what medical outcomes you consider unacceptable following an illness or injury. This provides you with an opportunity to reflect on what would be important to you when you are nearing death and allows you to discuss with your decision maker what religious or cultural matters are significant for you, and how you would like this addressed or respected should you lose legal decision-making capacity.
This allows you to appoint someone to assist you in making and carrying out important life decisions. The appointment is designed to encourage your autonomy and dignity and it does not take away from your rights or your choices. The document can also provide you with a support person who can then legally carry out your wishes on your behalf if you are unable to do so.
Who can be my Attorney?
It is crucial that your attorney is someone you trust, who understands what is important to you, and is willing and able to act on your wishes as much as they are able. In addition, they must have the capability to act in the role. We advise you consider their personal attributes closely, least they abscond to Spain and spend all your money!
One Medical Treatment decision maker can be appointed at a time, with an alternate selected in situations where the first is unable to act. You can appoint a family member or friend.
You may appoint multiple attorneys to act as your Enduring Power of Attorney at one time. If you choose more than one, we advise you consider the relationship between these individuals and whether they have the capacity to work together to avoid conflict in the future.
You may choose different people to act as medical decision maker and attorney for financial matters, as the actions required by the two attorney roles differ and certain friends or relatives may have strengths more suitable to just one of those roles and not necessarily both.
Does my Attorney have to accept their role as Attorney?
It is important to discuss with a potential attorney whether they would be willing to accept the role, as a Power of Attorney or Medical Decision Maker appointment is not valid until both you and your attorney(s) sign the document accepting the appointment/position.
It is sensible to plan ahead not just for things such as overseas holidays where you would like to appoint an attorney to keep an eye on your finances while you are away, but also for unexpected life events such as illness or injury.
If you are considering appointing an attorney, it is important that you understand both the effect of the appointment but also the responsibilities that come with that appointment. It is important to ensure the necessary forms are completed correctly to ensure the appointment is legally binding.
If you or someone you know is considering such an appointment or would like more information or advice, please call Grant Mackenzie on 03 9480 1155 to discuss the options or make an appointment.
Grant has been a partner at Phillips & Wilkins since 1990 having joined the firm in 1983. He is a member of the Law Institute of Victoria Elder Law Committee.