Powers of Attorney
If you are going to be unable to conduct your affairs in your normal way, you may need to appoint someone else to do things for you. When you formally appoint someone else to act for you, you are giving them a "Power of Attorney".
A Power of Attorney is an important legal document and it is strongly recommended that you get legal advice before signing one. To quote from one solicitor "There are many pitfalls (with Powers of Attorney) that only become apparent with experience. But if you give your solicitor a chance to understand your unique situation, there is far more chance that potential traps will be identified and avoided."
- Types of Power of Attorney
- Medical treatment
- Differences between states
- Choosing someone to act as your Attorney
- What happens if you don't have a Power of Attorney?
- How do you create a legally valid Power of Attorney?
An ordinary or general Power of Attorney is used when, although you are capable of managing your own affairs, there is some specific reason why you won't be able to. This Power of Attorney allows someone to act on your behalf for property and financial matters only. It does not allow them to make other decisions (e.g. medical) for you. It is only valid as long as you could manage your own affairs and becomes invalid if you lose this ability.
A Power of Attorney starts immediately upon execution unless a date or occurrence of an event such as disability or incompetence is specified. Some States don't allow Powers of Attorney that start on the occurrence of an event.
An Enduring Power of Attorney is used to appoint someone to act for you after you lose the capacity to manage your property. It might only come into force when you lose this capacity, however you have to be capable at the time you appoint the Attorney. Losing capacity to manage property means that you can't understand information relevant to making a decision or can't appreciate the probable consequences of making (or not making) a decision. In most of Australia, except in the A.C.T. and Queensland, a simple Enduring Power of Attorney covers the same property and financial matters as an ordinary Power of Attorney and does not give someone the right to make decisions about your welfare or medical treatment. In some States this may be called an Enduring Power of Attorney (financial).
You cannot authorise your attorney to make any decision that would be contrary to law. Additionally, you cannot authorize an attorney for your Enduring Power of Attorney to do any of the following:
- make or revoke your will;
- make or revoke your Power of Attorney;
- exercise your right to vote in a Commonwealth, State, Territory, or local government election or referendum;
- consent to the adoption of your child under 18 years;
- consent to your marriage.
As long as you are mentally capable, you can revoke a Power of Attorney. You simply notify your Attorney (in writing) that the Power is revoked and destroy the original Power of Attorney. Otherwise, an Enduring Power of Attorney continues in effect indefinitely, unless the document specifies an end date. If you are deemed legally incompetent, you cannot revoke an Enduring Power of Attorney.
In any case, the Power of Attorney ceases when you die. At that point, your Will comes into force. See url reference
If there are questions as to whether you are 'legally capable' of giving someone a Power of Attorney, you would have to demonstrate that you knew and understood the nature of your land, property and financial assets and that you understood that you are giving your Attorney complete authority to deal with these in your interests. You might have to see a specialist to conduct a capacity assessment if there is any doubt.
If the Enduring Power of Attorney only comes into effect when you lose capacity, someone may be faced with a similar set of issues when applying to the appropriate authority to declare that the Enduring Power of Attorney is in force.
If you are concerned about possible medical treatment, depending on where you live, you might use a variation of an Enduring Power of Attorney called an Enduring Power of Attorney (medical treatment). This comes into force in the same way as the financial Enduring Power of Attorney i.e. only when you are unable to make decisions. It only applies to decisions about medical treatment and cannot be used to make financial, legal or guardianship decisions.
Alternatively or in addition, again depending on where you live, you might make an 'Anticipatory Direction' or 'Advance Health Directive' which specifies the types of treatment you do or don't want if you become unable to tell people yourself and you are either in the terminal phase of an illness or a persistent vegetative state. Anyone you appointed through a medical Power of Attorney plus your Doctors and your next of kin must follow these instructions.
When it comes to health decisions, the Attorney, Guardian or other decision maker normally gives consent if minor medical or dental treatment is required. However, if the decision maker is not available, the doctor or dentist can proceed with minor treatment without consent if they can see from your record that the treatment is necessary and that you aren't objecting. For major medical treatment, only the decision maker or possibly a Guardianship Tribunal can give consent. Consent cannot be given for treatments which are administered for the benefit of health carers, or health professionals. For example, a nursing home that is short of staff cannot ask a decision maker to consent to sedate you to make it easier to care for you.
There are some special health care matters that you cannot authorise your Attorney to make decisions about. These may include:
- removal of tissue from you while alive for donation to someone else;
- your sterilisation;
- terminating your pregnancy;
- allowing your participation in medical research or experimental health care;
- your treatment for mental illness including electroconvulsive therapy or psychiatric surgery.
Consent for special health care matters can be provided by the appropriate Guardianship Tribunal. If you are concerned about authorising or forbidding specific medical treatments, you should seek legal advice.
In a similar fashion to the Enduring Power of Attorney (medical), you might appoint someone to be your Guardian under an Enduring Power of Attorney (guardianship) or an Enduring Power of Guardianship (the exact form depends on the State). A Guardian can make personal and lifestyle decisions for you such as where you live. Again, depending on the State where you are a resident, you may need this for lifestyle decisions or a medical Enduring Power of Attorney might be able to take these decisions. In some instances, your Guardian can make medical decisions. If you have appointed both a Guardian and a medical Power of Attorney, your Attorney would take precedence.
There are differences between the rules in the various States and Territories in Australia. For example, in Queensland, you can use a short form to appoint the same person as your Attorney for financial matters and personal matters including health care or a long form and appoint separate people.
In some states, such as NSW, you can appoint someone through an Enduring Power of Guardianship who can then make medical and lifestyle decisions for you should you become incapable.
In other States, for guardianship issues, you might use an Enduring Power of Attorney (medical treatment) or perhaps you might use both forms.
See the following links for further information on state issues.
ACT - Power to Choose
NSW - Power of Attorney in NSW
QLD - Power of Attorney
TAS - Power of Attorney
VIC - Power of Attorney
WA - Powers of Attorney
You are going to be giving this person a lot of power over your affairs and so should have complete trust in them. They must be a 'capable adult' (over 18) and you should make sure that they have sufficient time and financial skills to handle your affairs properly. They do not have to be a lawyer and can be a relative of yours or a beneficiary of your will (they cannot be an undischarged bankrupt). They have to act in your best interest in good faith, avoiding any conflict of interests, keep accurate records of dealings/transaction undertaken on your behalf and keep your property and money separate from their own.
You can appoint two people either as 'joint' Attorneys where they have to act together and both sign documents or as 'joint and several' Attorneys where they can act together or individually. Be aware that they might not need to act under an Enduring Power of Attorney for many years and you should consider their ability to perform the role when the time comes. You can appoint the Public Trustee as your Attorney if necessary.
Depending on the kind of relationship you have with your Attorney, you should consider whether they should be paid for their services. You might stipulate that they only receive reimbursement of out-of-pocket expenses, specific amounts or you could authorise them to pay themselves reasonable amounts for the actions they take. Usually, you would only pay a trust company or other professional person/organisation acting as your Attorney. You can require your Attorney to prepare financial statements on a regular basis but this can be a good deal of work and most people don't require it of unpaid Attorneys. Regardless, Attorneys should keep records of their actions. If your Attorney is a family member, you may co-own assets and you should note this in the document to avoid any impression of improprieties on their behalf.
If all your bank accounts and property are in one State where you reside, then it is a good idea that your appointed Attorney(s) live there as well. There are provisions in most States that allow your Attorney to act validly in other States. However, if there are questions as to properties in multiple States, some Territories and States may require additional documentation or you may need to make separate Powers of Attorney for each state. (You could have separate people acting for you, if convenient, in the different States.) If you need to have action taken on your behalf overseas, then you should get specific legal advice as to the necessary steps to authenticate the Power of Attorney.
If you or your spouse lost decision making ability through illness, accident or trauma and an Enduring Power of Attorney has not been made, it might be necessary for a person to be appointed to make any necessary financial or medical decisions. In most States and Territories there is guardianship legislation in place which, if needed, appoints such a person as a decision maker.
For example, the Guardianship Act 1987 (NSW) sets out a list of people who might be appointed in these circumstances. They will appoint:
- an existing guardian or Enduring guardian; or
- if there is no guardian or Enduring guardian, the most recent spouse, de facto spouse or same sex partner with whom you have a close and continuing relationship; or
- if there is no spouse, de facto spouse or same sex partner, an unpaid carer who is now providing support to you or provided support before you entered residential care; or
- if there is no carer, a relative or friend who has a close personal relationship with you
If there is no one falling in any of these categories, a Guardianship Tribunal may act as a substitute decision maker.
If you do not have an Enduring Power of Attorney, you might have to go through a court procedure to get permission to conduct financial affairs. For example, if you and your spouse own your home as joint tenants, you might need to seek permission from a Tribunal to sell the home. This could lead to further complications with the court supervising your administration of your spouse's assets e.g. their half of the proceeds from the sale.
It is probably sensible to make cross provisions between spouses with Enduring Powers of Attorney for each other at the same time as you make a Will (see url)
In general terms, you complete and sign a Power of Attorney document (which may be a prescribed form) and have it witnessed by two people. You should initial each page of the document. The signing and the initialling of the pages must occur in the presence of your witnesses. Your witnesses must sign on the applicable page of the Power of Attorney and should also initial each page. This must occur in your presence.
Your witnesses must be at least 18 years old and cannot be your appointed Attorney or a person who is signing on your behalf. You should generally avoid having witnesses that have any financial relationship with you. You and your witnesses must have capacity and be mentally capable of managing property and making decisions. One witness must be someone authorised to witness statutory declarations and only one of your witnesses can be a relative.
Generally speaking, a Power of Attorney has to be registered with your land titles office/department if it could affect your land or other real estate or if your Attorney is going to deal with your shares. In Tasmania, you must register Powers of Attorney with the Recorder of Titles. In the Northern Territory, you must lodge Enduring Powers of Attorney at the Registrar-General’s Office.