Power of Attorney – Summary

While many Australians recognise the value of having a will, 59% in fact, only 11% of Australians have a valid enduring power of attorney. Both documents are essential to estate planning. Both documents will make it easier on your loved ones to handle your finances. However, the Power of Attorney is sorely underused.

By making a Power of Attorney (POA) , you are choosing who you want to manage your financial affairs and who you want to make precious decisions on your health and other personal matters, when you lose the capacity to make these decisions yourself.

If you are no longer capable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision, without an enduring power of attorney in place, there may be no one with the legal authority to manage your affairs. Your loved ones would need to apply to a legal body to have someone appointed.

A Power of Attorney is essential to ensuring your affairs are properly managed. It ensures there is no delay between your loss of capacity and the ability to make crucial decisions on your behalf by a loved one. It is a flexible document that is enduring but easily revocable.

What is a Power of Attorney?

A POA is the legal power to make decisions on someone else’s behalf. ‘Attorney’ is the person given the power to make the decisions by the ‘principal’, meaning the subject. This power can be general or enduring. Enduring means that it continues until it loses its force due to a supervening event, such as marriage, death of the principal or loss of capacity by the attorney. A General Power of Attorney has a specific duration. It is normally used to appoint someone to make financial decisions on the principal’s behalf for the duration of a specific event, such as an overseas trip.

A principal may give an attorney the power to make decisions about personal matters, financial matters, and health matters. An example of a personal matter may be where and with whom you live. For financial matters, you might need your attorney to decide how to invest your income or savings For health matters, an instance might be consenting to particular types of health care. Note, an Attorney can also consent on your behalf to the withdrawal or withholding of life-sustaining medical treatment. You can give instructions about these sorts of serious decisions in an Advance Health Directive. You do not need to have an Advance Health Directive as part of a valid POA.

A POA cannot extend to decisions about personal matters such as voting at elections, consenting to marriage or your will. Your attorney cannot make decisions about donation of body tissue, sterilisation, experimental health care or abortion.

No delay

Primarily, the key benefit to a having a POA is just that, having a POA. If the time ever comes when you are no longer able to make decisions for yourself, having the executed POA at the ready means that there is no delay in making any precious decisions about your personal, financial or health matters. Without a POA in place, someone with a personal or professional interest in your life will have to apply to the Queensland Civil and Administrative Tribunal (QCAT) to be appointed as your attorney. Sometimes QCAT will decide that there is no one suitable in your life to act as an attorney. In these cases, QCAT will appoint the Public Guardian for personal and/or health decisions, and the Public Trustee for financial matters. Of course, regardless of the type of attorney that is appointed, attorneys are always personally accountable for their actions. They can be held liable for any mismanagement of your affairs, whether their actions are deliberate or negligent. The penalties for this sort of offence include criminal charges and recovery of money. The Public Guardian can investigate any complaint against an attorney.

Flexibility of Power of Attorney

A POA is flexible and can be easily tailored to your situation. As stated, the POA can be general or enduring. You can choose your attorney and you can choose more than one attorney. You can decide if you want those attorneys to act jointly, as a majority (simple, two-thirds, unanimous), severally (any one of your attorneys can sign), or successively (power is given to a particular attorney when the power given to another attorney ends, or when the other attorney is not available to make decisions).

You can specify what areas of your life they have the power to make decisions over, such as personal, health or financial. You can specify decisions that you do not wish your attorney to make and include instructions on what you want your attorney to do. As is always, these powers are not given to the attorney/s until the specified event or date. Usually, the chosen occasion is when you become incapable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision. A POA can also begin immediately or on a specified date.

Power of Attorney is Enduring and Revocable

The final benefit that we will discuss in this insight is the flexibility of length of POAs. As mentioned, a POA can be enduring, meaning that it will be on standby until you need it. Further, it will be in force, for personal and health matters, so long as you are incapable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision. Once you regain your capabilities, it is revoked. For financial matters, it continues until it is revoked by you (when you have the capacity to revoke it).

Further, the POA will be automatically revoked by any major events in your life. The following situations will bring the POA to an end:

  • Marriage: If you marry, the power of attorney is revoked unless your new spouse is already your attorney (If your new spouse is your attorney, the only power that is revoked is the power of any other attorney you may have.)
  • Divorce: If you divorce, the power of attorney is revoked to the extent that it was given to your former spouse.
  • Death: If you die, the enduring power of attorney is revoked in its entirety.
  • An inconsistent document: This power is revoked to the extent of any inconsistency with any later document you complete, such as an Advance Health Directive or another enduring power of attorney.
  • Withdrawal of Attorney: Your attorney may withdraw by giving you a signed notice or by getting the Court’s leave to withdraw.
  • Incapacity of Attorney: Your attorney’s power is revoked if he/she becomes incapable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision; if your attorney becomes bankrupt or insolvent, or they die.

A POA is malleable. If you make any major changes to your life, your POA will not override them.

If you would like assistance in drafting your Power of Attorney, we’re here to help. You can book an obligation-free consultation with our expert team, who have drafted hundreds of Powers of Attorney, ensuring your document is tailored to your circumstances.