Enduring Power of Attorney
What is an Enduring Power of Attorney?
An Enduring Power of Attorney is a legal representative that a person can appoint in advance to manage their assets and financial matters on their behalf. This role can become part of the caring role if the person you care for is no longer able to make certain decisions for themselves due to impaired capacity. It does not mean that a person will lose control over their financial affairs, but gives an attorney formal authority to manage a person’s financial affairs according to their instructions.
What is the difference between a General Power of Attorney and an Enduring Power of Attorney?
A General Power of Attorney gives the legal ability to act on someone else's behalf in financial matters such as paying bills and managing money if for any reason they are unable to manage financial matters themselves. For example, a daughter may be caring for her frail mother who has mobility difficulties and can no longer go to the bank to pay her bills. Her daughter, with Power of Attorney, can pay her mother's bills on her behalf – often online.
A General Power of Attorney can no longer be used once a person can no longer make decisions or act on their own. This is where an Enduring Power of Attorney comes in. An Enduring Power of Attorney can be used when a person has ‘lost capacity’, but must be appointed beforehand.
‘Capacity’ is the ability to make decisions and understand the effects of those decisions. A person is said to have capacity when they understand the information and choices presented, weighing up the information to make a decision and then communicating that decision. A person who can't follow this process and communicate decisions is said to lack capacity.
How a Power of Attorney can be used
A person can decide how much power or authority to give an attorney. They may want them to have the same powers they would with their money or property. They may want to limit the powers of their attorney to very specific tasks e.g. paying certain bills or selling their house.
An Enduring Power of Attorney cannot make lifestyle, accommodation or medical decisions and is limited to financial or property; only an Enduring Guardian can make lifestyle decisions on someone else’s behalf.
Appointing an Enduring Power of Attorney
To appoint a Power of Attorney, a person must have capacity, be competent and able to understand what they are doing. A person cannot appoint a Power of Attorney for another person, only for themselves.
A person can choose a lawyer, solicitor, carer, family member, friend or NSW Trustee and Guardian to be their attorney. An attorney can be any competent adult who is able and willing to act on a person’s behalf. Quite often a carer, family member or friend is appointed as an attorney if they are familiar with a person’s financial affairs and their needs and wishes.
An attorney should act in the best interests of the person and carry out their wishes. They should also understand the person’s views about the decisions they might be asked to make and know the person well enough to make the kind of choices they would make for yourself.
Making your wishes known
It is advisable to sit down with the person you care for and discuss their views and preferences is a range of legal situations. These can be written down and referred to as needed in the future. If the legal situation is related to a health or medical need, this is called an 'advance care directive'. A doctor or lawyer can help you and the person you care for to work out what to do in a range of common situations.
Discuss the views of the person you are caring for with close family members and friends and give them copies of your advance directives. Letting people know in advance what a person wants in a particular situation can help prevent distress or conflict if different people have different views about what should be done.
If the capacity of the person you care for is suddenly impacted and you do not have an Enduring Power of Attorney in place, there will be nobody with legal authority to make decisions related to property and finances. In this situation, a family member or support worker will need to apply to the NSW Civil and Administrative Tribunal (NCAT) to appoint a financial administrator.
An NCAT application can also also be made to challenge an attorney’s appointment when they are perceived to be misusing their powers.