Last week, we briefly looked at Enduring Powers of Attorney. This week, I will answer the most commonly-asked questions regarding Powers of Attorney.
I’ve made a Will. Why do I need a Power of Attorney?
A Will is only operative after your death, whereas a Power of Attorney is operative during your lifetime. There’s no overlap, and they perform different functions.
I’m too young to make a Power of Attorney. That’s just for old people!
Incorrect. That’s like saying that you don’t need car insurance because you never intend to have an accident! We don’t know what is in store for us tomorrow, so it’s better to have everything in place today.
I have an Enduring Power of Attorney – how do I make sure my Attorneys do what I want?
The law requires that anyone acting as your Attorney must do so in your best interests. In addition, the Enduring Power of Attorney allows you to include your own restrictions and safeguards. For example, you might like to have two or more people act together, or limit your Attorney from being able to deal with only certain assets, or require them to take certain factors into account when making decisions.
There are severe penalties for anyone who fails to act properly as an Attorney.
My kids don’t get along. Who should I appoint?
There’s no restriction on who you can appoint. You can appoint a family member, a trusted professional, a trustee company, a friend, or some combination of these people.
What’s a General Power of Attorney?
This document allows someone to make decisions on your behalf, but only if you have the ability to understand the document – which is known as ‘having capacity’. It’s not as useful as an Enduring Power of Attorney.
My mum/dad/significant other is losing capacity, and needs an Enduring Power of Attorney. Can you draw it up?
I can – but I need to meet the person who is giving the Power of Attorney, because they need to give instructions, show that they understand the document, and sign it.
If that person has lost capacity, then they can’t sign their Power of Attorney, and you will need to apply to the Victorian Civil and Administrative Tribunal for an order to be made allowing you to act. It’s a more difficult process, and once you are appointed, there are onerous, and ongoing, reporting requirements.
What’s a Living Will?
Different states in Australia have different legislation for Powers of Attorney. In Victoria, we can prepare a set of instructions to someone acting as our Medical Treatment Power of Attorney (but these instructions aren’t binding). Other states are different, and allow people to prepare binding wishes in the form of a Living Will (Queensland) or an Advanced Care Directive (New South Wales).
Victoria may have binding Advanced Care Directives soon – a bill was recently introduced to parliament. Watch this space!