While no one expects to lose the capacity to manage their own affairs, many people feel comfort from knowing they have planned ahead. Making appropriate arrangements for a trusted relative or friend to make decisions on your behalf if something does happen offers some peace of mind.

 A Power of Attorney is a legal document whereby one person grants another person the authority to make legal and financial decisions on their behalf. A Power of Attorney can be used in several ways – from having another take care of your affairs whilst travelling to times of extended illness.  An Enduring Power of Attorney takes this a step further, whereby the person nominated to manage the affairs (also called the “Donee”) may continue to manage the affairs once the person giving the power (also called the “Donor”) is found to have diminished mental capacity due to injury or illness. This arrangement can remain in place as long as the donor is still alive.  The relevant law is the Powers of Attorney Act 2003 (NSW).

When does the power of attorney come into effect? Powers of Attorney can be prepared in two ways – to come into effect immediately and to continue once the donor suffers a loss of capacity; or to come into effect at a future time (such as the onset of mental incapacity). A Power of Attorney can also be limited, for example, to a nominated time period.  Or it can be a combination - some clients like to appoint their spouse with immediate effect, then appoint their children as alternate attorneys (if the spouse is unable or unwilling to act) but the children can only act if the principal has lost to capacity to look after their own affairs.

A question of capacity In order to sign a Power of Attorney, the donor must be capable of understanding the nature of the document they are signing and its effect. It is therefore important in situations where a Power of Attorney must be appointed that it is done so in a timely manner. Recent amendments to the Power of Attorney legislation provides that the person(s) appointed as your attorney(s) also needs to acknowledge acceptance of the appointment.

Advanced Care Directive

Advanced Care Directives (also known as advance health directives, advance medical directives and living wills) provide family members, friends, enduring guardians and medical professionals with an unambiguous statement of your intentions and preferences regarding medical intervention and treatment. This can assist in discussions with family members and also with medical professionals. While not legally binding, a Directive is often used in combination with an Enduring Guardianship to ensure that your wishes are followed.