Defining Power of Attorney & All it Entails

Rose Lawyers on 19 December 2014

What would happen if you were suddenly unable to make decisions on your own behalf?

Though it’s never something one plans for, is crucially important to think about who you would like to act on your behalf in case something happens which prevents you from making decisions.

A Power of Attorney is a legal document that deals with circumstances such as these. Under this legal agreement, a person (the Donor) gives someone else (the Attorney) the power to make financial, legal or medical treatment decisions on their behalf. The attorney can then do anything that the Donor can do regarding finances, legal matters, medical issues or lifestyle issues.

To appoint a Power of Attorney, you need to be able to understand the implications and consequences of what you are doing. If you do not have the capacity to understand this, the appointment will not be legally valid.

Types of Powers of Attorney

There are four types of Powers of Attorney, each of which allows your nominated representative to legally make different kinds of decisions on your behalf.

General Power of Attorney is the document used to appoint someone – usually for a specific period of time – to make decisions for you for a specific time frame and/or to perform specific tasks. This document doesn't have to be witnessed, but it also becomes void if you lose the capacity to made those decisions for yourself.

An Enduring Power of Attorney (Financial) is the document used to appoint someone to make financial or legal (but not medical) decisions for you. A Financial Power of Attorney can be enduring (having continuing effect should you lose capacity) or Limited (only applicable for certain decisions or within a certain time frame). A Limited Power of Attorney is also known as a General Power of Attorney. It is important to note that this Power of Attorney usually has immediate effect, meaning that the person you have appointed can act on your behalf immediately and does not have to wait until you have lost capacity.

An Enduring Power of Attorney (Medical Treatment) is the document used to appoint someone to make decisions about medical treatment on your behalf. Your nominated representative has the legal right to make medical decisions on your behalf in the event you lose capacity at some point in the future.

An Enduring Power of Attorney (Guardianship) is the document used to appoint someone to make lifestyle decisions for you. Examples of these kinds of decisions could include whether or not you need to be in a nursing home or retirement village, and the level of care you receive. Your Attorney can only exercise this power in the event that you lose capacity to make them for yourself. For example, if you are to develop Alzheimer's or Dementia, or suffer from an acquired brain injury or stroke.

Deciding Who to Appoint Under Powers of Attorney

Deciding who you would like to appoint as your Power of Attorney is a huge decision and one that should ideally be made by you. If you either can't make this decision or don't, then VCAT can decide on your behalf.

Rather than being a legal decision, deciding who you would like to be your Power of Attorney is a deeply personal matter. Your Attorney should be someone who you trust; someone who has the capacity to make objective decisions and who also knows you well enough to make the decisions that are in line with your own wishes. For example, if you do not want to be put on life support, there is no point in appointing a Power of Attorney if you know they will not turn it off.

relaxed mature couple enjoying retirement

If you wish, you may make a joint appointment for both a General Power of Attorney and an Enduring Power of Attorney (Financial), meaning your appointed decision-makers will make decisions for you jointly. You may also choose to stipulate that both of them will have to agree for any decisions to be valid.

What Happens if You Don't Have Powers of Attorney?

If you become incapable of making decisions and you do not have Powers of Attorney, then someone has to make an application to a type of Court called VCAT (Victorian Civil and Administrative Tribunal). VCAT is able to give an Order that allows someone to make decisions on your behalf.

This process is usually inconvenient. When there is a need to make a financial, legal, medical or lifestyle decision, the person making that decision usually needs to do so quickly and will not want to wait around for VCAT to make an Order.

On top of that, literally anyone can make the application to VCAT. This means, for example, that your neighbour could end up with control over your finances and medical decisions.

It is far better and more practical to have Powers of Attorney in place so that you can decide who will be able to make these crucial decisions for you, and to ensure that they are people that you completely trust.

Summary

A Power of Attorney is a legal document which confers authority to a chosen representative to make decisions on your behalf. This means that if you are unable to make legal, financial, medical or lifestyle decisions, someone you trust will be able to make them on your behalf.

There are four different types of Powers of Attorney, each of which gives your chosen representative the right to make certain types of decisions for you. You may also appoint more than one Power of Attorney, so that they may make joint decisions on your behalf.

Deciding who you would like to make decisions on your behalf is a huge decision. It is one that you need to think about very carefully, weighing up the trustworthiness of potential candidates, their capacity to make objective decisions, the likelihood they will make decisions that you agree with, and how well they know you personally.

Click here to speak to Rose Lawyers or for more information on Powers of Attorney.