In the event you lose the capacity to make decisions for yourself, having a power of attorney and an enduring guardian can provide peace of mind for your family and friends. These documents allow another person (or various people) to make important decisions on your behalf if you are unable to make them for yourself.
What is a power of attorney?
A power of attorney is a legal document that allows you to appoint one or multiple people to make decisions about your financial affairs on your behalf. The person or persons you appoint as your attorney/s will have the power to manage your bank accounts, pay bills and make investment choices, among other things, on your behalf. When making a power of attorney, you can choose to grant power to your attorney/s for a specific period of time, or for an indefinite period of time. Alternatively, an ‘enduring power of attorney’ can be drafted, allowing your attorney/s to continue to act in the event you become mentally incapacitated.
What is an enduring guardian?
An enduring guardian is a legal document that allows you to appoint someone to make health care and lifestyle decisions on your behalf, should you be unable to make decisions for yourself. This can include decisions about where you live and what medical treatments you receive. Unlike a power of attorney, an enduring guardian can only act when you cannot make decisions for yourself, for example, if you have been in an accident that has left you mentally incapacitated.
Why should I prepare a power of attorney and an enduring guardian?
There are several reasons why you might want to consider preparing a power of attorney and an enduring guardian.
A power of attorney and an enduring guardian can provide peace of mind for you and your loved ones. By appointing someone you trust to make important decisions on your behalf, you can ensure that your wishes are respected and that your affairs are managed in the way that you would want in the event you are unable to make decisions for yourself.
Having a power of attorney and an enduring guardian in place can also help to avoid disputes among family members. If you become incapacitated and there is no one appointed to make decisions on your behalf, your loved ones may disagree about what is best for you. This can lead to arguments and legal disputes, which can be stressful and costly for everyone involved.
What happens if I do not have a power of attorney and enduring guardian and lose the capacity to make my own decisions?
If you do not prepare a power of attorney and enduring guardian before you lose capacity, the consequences can be significant. In this scenario, there exists a default decision-making process to determine who can make financial and healthcare decisions on your behalf.
For financial matters, the NSW Civil and Administrative Tribunal (NCAT) may appoint a financial manager to manage your affairs. The financial manager must act in your best interests, and their powers and duties are set out in the Guardianship Act 1987 (NSW). However, the appointment of a financial manager by NCAT can be a lengthy and expensive process, which can cause delays in accessing your funds and managing your affairs. More information on financial management orders can be found here.
For health care matters, the Guardianship Division of NCAT may appoint a guardian to make decisions about your medical treatment and other lifestyle matters. Like a financial manager, a guardian must act in your best interests, and their powers and duties are set out in the Guardianship Act 1987 (NSW). Unfortunately, the appointment of a guardian by NCAT can also be a drawn-out process, which can delay your access to healthcare and necessary medical treatment. More information on guardianship orders can be found here.
If you have no family members or close friends available to be appointed as your financial manager or guardian, the Public Guardian or Public Trustee may be appointed by NCAT. The Public Guardian and Public Trustee are government agencies that provide financial and guardianship services to people who are unable to make their own decisions.
Decisions made by NCAT may not necessarily align with your wishes or preferences. Therefore, it is important to prepare a power of attorney and enduring guardian while you still have the capacity, to ensure that your affairs are managed in the way that you would want. It is particularly important to consider preparing these documents if you are elderly or have a medical condition that could affect your decision-making abilities.
If you are considering preparing a power of attorney and an enduring guardian, the team at Eleven Legal can help; contact us today!
