Enduring Power of Attorney and Enduring Guardianship – Why Every Adult Should Have Both
Wills and Estates
An enduring power of attorney and an enduring guardian are two vital instruments that allow one or more people you nominate to act on your behalf to manage your money and property (enduring power of attorney) and your health and lifestyle (enduring guardian). If you have neither document in place, it is worth drafting these now while you still have capacity, so that your family does not have to undertake time consuming and costly steps to be able to formally assist you later, such as applying to NCAT for management orders.
We assist clients across Beecroft, Cheltenham, Pennant Hills, Thornleigh and the wider Hills District and North Shore, and a common misconception we come across is that these documents can be left until later, or are only needed by the elderly, or that their Will is all that is required. In reality, a spouse or adult child cannot simply take over the management of your affairs when the need arises, and loss of capacity can follow an accident or sudden illness at any age. Furthermore, you Will has no operation whilst you are alive, so it is not the document that will assist in these circumstances.
No family member has an automatic right to deal with your bank, your superannuation your home, or your health, so putting the right documents in place now is one of the simplest things you can do for your family.
What each document covers
An enduring power of attorney and an enduring guardian each authorise nominated individuals to make decisions on your behalf.
An enduring power of attorney is made under the Powers of Attorney Act 2003 (NSW) and lets someone you trust make financial and legal decisions for you, such as:
- paying your bills and operating your bank accounts;
- managing your investments and superannuation;
- buying, selling or dealing with your property; and
- signing legal and financial documents on your behalf.
The difference from an ordinary power of attorney is that an enduring one remains on foot after you lose capacity, which is usually when it is needed most. You can choose when it commences and set any limits or restrictions that you want.
If your attorney will deal with real estate, the document must be registered with NSW Land Registry Services, and we can assist with that.
An enduring guardian is appointed under the Guardianship Act 1987 (NSW) and makes decisions on your health and lifestyle, such as:
- where you live;
- what medical and dental treatment you receive;
- what support services are put in place for you; and
- everyday matters affecting your care.
An enduring guardianship only comes into effect if you lose the capacity to make these decisions yourself and until then you keep making your own choices. If you prefer, you can give your guardian directions about the things that matter to you and limit their authority to particular decisions.
Why you need both, not just one
Because the two documents cover different decisions, most people put both in place. If you have only one of them, the decisions the other would have covered are left unmanaged in the event you lose capacity.
Your appointed attorney cannot make health decisions if you do not have an enduring guardian document, and vice versa, your enduring guardian is not permitted to deal with your financial affairs without authority. Hence, both documents are needed.
As noted earlier, it is also worth clarifying that a will does not assist in authorising someone to make these types of decisions for you. A will only takes effect after you die and has no bearing on decisions made while you are alive.
What happens if you have neither?
If you lose capacity without these documents in place, your family cannot simply take over. Someone will usually need to apply to the Guardianship Division of the NSW Civil and Administrative Tribunal (NCAT) to have a financial manager and a guardian formally appointed. That process takes time, can be stressful, and may result in the NSW Trustee and Guardian or another person being appointed, rather than the person you would have chosen. Arranging your own documents in advance means you choose who acts for you and saves your family what can often be a time consuming and costly administrative task.
How these documents are set up
Both documents must be signed while you still have capacity and witnessed by a qualified witness, such as a solicitor, who certifies that they have explained the document’s effect to you. For each document, the person you appoint must also formally accept the role, by signing the document.
The most important decision is who you appoint. This should be someone you trust completely, who understands your wishes and who is willing to act in your best interests. You can appoint the same person to act as attorney and guardian or different people, and you can appoint more than one person to act jointly or separately. Because these documents carry real authority, having a solicitor prepare and witness them means they state exactly what you intend and will be valid when someone needs to rely on them.
What about an advance care directive?
An advance care directive is also worth considering alongside an enduring guardian. It is a document in which you record your wishes about future medical care, including any treatment you would like or would rather refuse if you became seriously unwell. Unlike the other two documents, an advance care directive is something you complete yourself without a solicitor’s assistance, because the choices made are personal rather than legal ones. However, you will need to discuss it with your medical practitioner or GP so that you are making informed choices. Where an enduring guardian appoints the person who makes health decisions for you, an advance care directive records what you would like those decisions to be, so your guardian and your doctors have your wishes to follow. Having both in place means your guardian is not left guessing about what you would have wanted. These wishes can sometimes be addressed in your enduring guardian document if they are not too complex. You will find that an advanced care directive is extremely detailed and granular about specific medical treatments, intervention and withdrawal of treatments, so whether you need or want an advanced care directive depends on how strongly you feel about these types of matters.
This article is general information only and is not legal advice. For advice about your own circumstances, please contact us.
If you would like to put an enduring power of attorney or an enduring guardian in place, or review your current documents, our team at Fioro Legal is well-positioned to assist. Contact us at info@fiorolegal.com.au or on 0481 848 450.
Mobile: 0481 848 450
Email: info@fiorolegal.com.au
Web: www.fiorolegal.com.au
