Power of Attorney and Enduring Guardianship documents – What are they and when should I get one?

Power of Attorney and Enduring Guardianship

Co-written by Vivian Hondrogianis (Paralegal)

KEY TAKE OUTS

  • A Power of Attorney document allows someone to make legal and financial decisions on your behalf.
  • A Power of Attorney can be used whilst you are alive and have capacity and also after you lose capacity.
  • An Enduring Guardianship document allows someone to make medical and lifestyle decisions on your behalf.
  • An Enduring Guardianship document can only be used whilst you are alive but only one and if you have lost capacity.

Power of Attorney and Enduring Guardianship documents are Estate Planning documents which are utilised during the lifetime of a person. The difference between these documents to a Last Will and Testament is that once the Principal passes away, there documents become invalid and the Attorney/Guardian is unauthorised to use these documents any longer. There is no right time to get these documents prepared as every personal and family circumstances differ immensely. However, in order to determine whether these documents are appropriate for your needs, one must understand the nature and effect of these documents to allow them to make a fully informed decision.

Power of Attorney

Nature and type of documents

A Power of Attorney is a legal document which allows the Attorney to make legal and financial decisions on your behalf.

There are three (3) types of Power of Attorney documents which include:

  1. General Power of Attorney – this allows the Attorney to act on your behalf whilst you are alive and have capacity but is terminated once you lose capacity;
  2. Enduring Power of Attorney – this allows the Attorney to act on your behalf whilst you are alive and have capacity as well as after you lose capacity; and
  3. Corporate Power of Attorney – this is a legal document made by a company that authorises the Attorney to act on the company’s behalf.

Appointing an Attorney

Choosing an Attorney is a very important decision and you may wish to appoint more than one (1) person to act on your behalf. If you choose to appoint more than one (1) Attorney, they may act in one of the following ways:

  1. Jointly – where the decision is agreed on by majority or unanimously;
  2. Severally – where any one of them can act on their own; or
  3. As an alternative – where they become Attorney when the first appointed Attorney dies, resigns or becomes incapacitated.

When appointing an Attorney, it is important to note the following considerations:

  1. The age of the person as they must be over the age of 18 years;
  2. If the person has the mental capacity to make the necessary legal and financial decisions on your behalf;
  3. If the person is someone you trust to act in your best interests; and
  4. If choosing more than one Attorney, are all chosen persons able to cooperate with each other.

Powers & Limitations

The Powers of Attorney Act 2003 provides for additional powers to be given to the Attorney by the Principal at the time of drafting the documents. There are three (3) additional gifts provided by the legislation which are optional and are as follows:

  1. The authority to give gifts – where the Attorney is able to use your money to provide reasonable gifts to a close friend or relative for a specific purpose such as a birthday.
  2. The authority for the Attorney to confer benefits – where the Attorney would be allowed to use your money for their own housing, food, education, transportation and medical expenses.
  3. The authority for the Attorney to confer benefits on another person – where you would specify the names of persons who you wish the Attorney to use your money for in relation to housing, food, education, transportation and medical expenses.

You also may elect to impose some conditions and limitations on the authority of your Attorney. Some examples of conditions and limitations include:

  1. You must consult with my Daughter Sarah Jones in relation to any matters to detail with my real property.
  2. I do not want my property situated at 1 Daisy Place, Narellan NSW 2567 to be sold.
  3. I only want this Power of Attorney to be utilised for the purposes of withdrawing money from my St George Bank account #001100102001.

Registration requirements

A Power of Attorney document is required to be registered with NSW Land Registry Services pursuant to the Powers of Attorney Act 2003 if the Attorney wishes to engage in transactions relating to land. The current land registry costs for the registration of this document is $143.50 including GST, but may fluctuate each financial year as the land registry sees fit.

Enduring Guardianship

Nature of the document

An Enduring Guardianship document is a legal document which allows the appointed Guardian to make medical and lifestyle decisions on your behalf only if and once you have lost capacity.

Appointing a Guardian

Choosing a Guardian is a very important decision and you may wish to appoint more than one (1) person to act on your behalf. If you choose to appoint more than one (1) Guardian, they may act in one of the following ways:

  1. Jointly – where the decision is agreed on by majority or unanimously;
  2. Severally – where any one of them can act on their own; or
  3. As an alternative – where they become Guardian when the first appointed Guardian dies, resigns or becomes incapacitated.

When appointing an Attorney, it is important to note the following considerations:

  1. The age of the person as they must be over the age of 18 years;
  2. If the person has the mental capacity to make the necessary medical and lifestyle decisions on your behalf;
  3. If the person is someone you trust to act in your best interests; and
  4. If choosing more than one Attorney, are all chosen persons able to cooperate with each other.

Functions, Limitations & Directions

The Guardianship Act 1987 lists the specific functions of the appointed Guardian which include making decisions regarding:

  1. Where you would live;
  2. What health care you would receive;
  3. What other personal services you are to receive such as hairdressing appointments or a cleaner; and
  4. What medical and dental treatment you would receive.

Aside from these functions, you may wish to place limits on the authority of your Guardian. Some examples of limitations include:

  1. That I do not be placed in a nursing home.
  2. That my Guardian takes me to my usual hairdresser, being Utopia Hair Design, once a week.
  3. That my Guardian takes me to my usual medical centre, being My Family Health at Gregory Hills, when necessary.

As this document is valid but only comes into effect once you lose capacity, you may hold some express wishes in relation to your medical treatment when there is no likelihood of recovery. In some instances, some people feel the need to express their desire for the medical practitioners to exercise all reasonable means in order to keep you alive, however some hold the view that they wish to be kept comfortable and that no extraordinary measures are taken. Some people wish to include a direction like this in their Enduring Guardianship document for many reasons but particularity so that their wishes are respected. However, if you have not had a chance to think about such a direction, you may wish to exclude this from your Enduring Guardianship document.


ABOUT KAISHA GAMBELL:

Kaisha Gambell

Kaisha is a Senior Associate at Coutts Lawyers & Conveyancers and heads our Wills and Estate planning team. She has been a successful and established lawyer in the Macarthur Region in excess of 5 years, where she has drafted and acted for many individuals and families with a net worth between $350,000 to 10,000,000.


For further information please don’t hesitate to contact:

Kaisha Gambell
Senior Associate
kaisha@couttslegal.com.au
02 4647 7447

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This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.