Planning for incapacity with enduring powers

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How to plan for incapacity with an Enduring Power of Attorney and Guardian

An Enduring Power of Attorney and Guardian ensures life can continue as easily as possible

Planning for incapacity can too often be put in the too-hard basket. 

A sudden illness, motor vehicle accident or disability may strike at any time. And while that situation would be traumatic for your spouse and family, the situation would quickly escalate if you didn’t have an Enduring Power of Attorney or Guardian in place.

One of the biggest misconceptions in this area of estate planning is that your spouse could manage your affairs and make any decisions if you lost capacity. Unfortunately, it’s not that easy. 

By appointing an Enduring Power of Attorney and Enduring Guardian, life can continue as easily as possible for you and your family should unforeseen circumstances arise. 

Power of Attorney – your financial and legal decision-maker

A Power of Attorney is your financial and legal decision-maker.

The powers can take effect immediately upon the attorney accepting the position (known as a general power of attorney) and will only be enduring if the document says that the powers continue upon incapacity. 

A Power of Attorney can: 

  • sign cheques, or withdraw or deposit money
  • buy or sell assets such as real estate, shares or belongings
  • enter legal agreements
  • provide for a spouse or dependent for reasonable expenses
  • make, vary or renew a superannuation binding death nomination
  • make other important legal and financial decisions

Enduring Guardian & Advance Care Directives – your medical and personal care decision-maker 

An Enduring Guardian is your medical and personal care decision-maker, who chooses where you should live, what healthcare should be provided and what treatments you may need. 

An Advance Care Directive typically includes instructions regarding the types of medical treatments or procedures you would want (or not want) to receive. This might include specific instructions regarding life-sustaining treatments, such as CPR or artificial ventilation. It might also include information about the use of pain medication, organ donation and other medical considerations.

In addition to outlining a person’s medical wishes, an Advance Care Directive can also name a healthcare agent or proxy who is authorised to make medical decisions on your behalf. This person should be someone you trust to make medical decisions that align with your values and wishes.

Together, these documents provide the legal framework to ensure essential duties continue, such as paying bills, making decisions about your medical care, or fulfilling your family’s day-to-day needs.

These ‘enduring’ documents come into effect should you become temporarily or permanently unable to manage your affairs – whether through illness, injury or disability. While an enduring document continues to operate if you lose decision-making capacity, it ceases to have power once you die.

What happens without them in place?

If you suddenly lose capacity without these documents in place, your family cannot make healthcare decisions for you. Your doctor will continue to do anything they can to improve your health or prolong your life. 

Your family will not be able to manage your bank accounts unless they are jointly held. Your family would not be able to deal with your real estate, even if it is jointly owned, manage tax returns or access other personal accounts (such as superannuation).

To resolve this situation, your family would need to apply to the local Tribunal. This can be a lengthy and complex process, although it can be expedited in emergencies. It’s also very costly.

The Tribunal may:

  • Appoint someone else as your representative
  • Limit the amount of time for the appointment
  • Appoint the state Trustee and Guardian instead

The Tribunal may review the decisions made on your behalf by the appointed person. These decisions can be very difficult, private matters, which are best kept from public inspection.

What are the benefits of these enduring powers?

  • Decisions can continue: While you are incapacitated, decisions for your well-being can continue with a trusted advisor. This will ensure the smooth handling of your financial and property matters. 
  • Your personal preference: You can appoint a representative you trust and who understands your values, preferences and beliefs. So that even if you are unable to communicate, your representative can act in your best interests.
  • Reduce complications: At an already stressful time for your family, you can help prevent disputes, delays and conflicts that may arise without these documents in place. 
  • Safeguard your assets: You can choose a representative you trust and provide guidance on the scope of their authority, protecting your assets from other individuals taking advantage of the situation.
  • Include flexible conditions: You can choose the scope of authority, the powers granted, and the conditions under which the representative can act so that your wishes are followed.

It doesn’t need to be difficult

Your estate plan should include an Enduring Power of Attorney and Guardian. These documents are vital components of your estate plan, which allow life to continue as easily as possible for you and your family should unforeseen circumstances arise.

We can walk you through the options and advise you on the best solutions to achieve your goals so that you have a trusted representative to manage your affairs and carry out your wishes.

Don’t delay implementing these important documents any longer. We’ll guide you through the decision-making process with ease.

Get started with an initial consultation

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