A power of attorney is a legally binding document that transfers specific power to a designated person or persons. Sometimes a person needs another individual(s) to make certain financial, health, and/or personal decisions. When this occurs, the person transfers power of attorney to the other individual. The person who gives the power is referred to as the principal and the person receiving the power is the agent or attorney. The reasons the principal may transfer power to an attorney vary including:
- The person wants to plan ahead for the unforeseeable
- The person is ill
- The person is going to be gone traveling
- The person is going to be deployed overseas
A person may designate someone they know or an agency to fill the role of attorney. The principal may revoke or modify the power of attorney as long as he or she is capable of making decisions. Therefore, if you decide to give power of attorney to someone, it is important to make sure your document is in proper order.
There are four types of power of attorney in Australia with each one having specific uses:
General non-enduring power of attorney
A general non-enduring power of attorney is granted to the attorney for a limited purpose. It is used for a specific task and then expires once that job is completed. For example, if the principal is moving into a healthcare facility and needs the attorney to sell the house, then the person would grant general non-enduring power of attorney. In the power of attorney document, you can outline exactly what you want the attorney to accomplish for you. It can entail a range of tasks or be limited to just one task.
Enduring power of attorney (financial and/or personal)
In contrast, an enduring power of attorney for financial and/or personal issues allows the designated person to continue making decisions on your behalf even in the case of reduced cognitive ability. Seniors often designate this type of power in the event they would not be capable of future financial and/or personal management due to dementia or other conditions. Principals, however, must be completely capable of making decisions at the time of transferring enduring power of attorney. They must be able to comprehend what all is involved. Before signing power of attorney to someone, people need to be aware of the following:
- The attorney will have the ability to manage the principal’s financial affairs.
- The document will still be operational even if the principal becomes impaired.
- If the principal becomes impaired, they will not be able to monitor the attorney’s actions (due to the impairment).
- If the principal is not impaired, they can change the scope and power of the attorney.
- The principal may elect more than one person to handle their affairs.
Enduring power of attorney (medical)
Some people seek an enduring power of attorney for medical issues. This means if the principal becomes impaired and unable to make medical decisions, the person designated would step in to make decisions. People may select someone close to them to fulfill this position or they may choose a professional person familiar with their desires. The enduring power of attorney (medical) would allow the person to choose appropriate care in the case the principal was in an accident, lost mental capacity, or was incapable of making a decision. In most cases, the agent may not refuse treatment for the person and they may not ever refuse basic care such as food, water, and pain relief. However, in a few cases, the agent may need to apply to the Guardianship List of the Victorian Civil Administrative Tribunal to gain approval for treatment. These cases include situations that may lead to “infertility, terminates a pregnancy, or removes tissue for transplant.”
Both types of enduring power of attorneys allow the following types of appointments:
- Individual attorney: “a single person or agency.”
- Joint attorney: “two people who must act together and agree on all decisions that are made.”
- Joint and multiple attorneys: “two people who can make decisions together and/or independently.”
The supportive attorney does just what the name implies – gives support to the principal in decision-making. The areas in which the principal may give support can be financial and personal or medical. The principal can only designate one person to be a supportive attorney but may select a backup in the case that the acting attorney cannot fulfill the role. One distinction between the supportive powers of attorney and the enduring power of attorney is that the attorney cannot make decisions for the principal after the person is impaired. When this occurs, the power is terminated.
A supportive attorney may provide help in any or all of the following ways:
- Communication with businesses on your behalf.
- Gather information on your behalf to help you make decisions.
- Finalize certain transactions.
However, supportive attorneys do not have the power to deal with real estate transactions or financial transactions of more than $10,000.
Once you make the decision to give power of attorney to someone, you will need the proper forms and an authorised witness. People that are not able to serve as witness include:
- The person you designate as attorney
- Alternate attorney
- Attorney’s or alternate’s spouse
Obtaining a power of attorney is a wise choice for people of all ages. It is best to be prepared than to become impaired and not have anyone selected to handle your affairs. When this happens the courts may select a person to make decisions for you and it may not be who you would have chosen.