Frequently Asked Questions about Powers of Attorney
Updated: Aug 19
Most people have a basic understanding of what a Power of Attorney is. They are generally aware that it is a document which authorises a person to act on behalf of another person.
However, people may be unaware of the differences between various Powers of Attorney, to what extent the difference powers can be used, and what should be considered when the documents are prepared. Often clients who approach our firm to obtain a Will have never turned their minds to also getting a Power of Attorney prepared; or they have decided that they are too young to worry about it.
However, a Power of Attorney and a Will are of equal importance and serve a similar purpose. One assists to protects your assets and wishes during your lifetime and the other after your death. Just as you would wish to ensure your wishes are followed with respect to your hard-earned assets after your death, you should ensure the same protection should you not be in a position to make decisions for yourself.
We also find that family and financial circumstances are increasingly getting more complex, and often a standard form Power of Attorney is insufficient. In order to ensure a person’s intentions are clear, proper drafting and tailoring to the individual is crucial. Rather than leave what happens to your assets to chance or risk a family member having to apply to VCAT during a stressful period, it is a far easier option to enter into a Power of Attorney while you can. This enables you and your family to focus on what is really important. See more information below:
What is an Enduring Power of Attorney (Financial and Personal)?
An Enduring Power of Attorney (POA) authorises the person appointed (“attorney”) to do anything on behalf of the person making the POA (“the principal”) that the person can lawfully do as an attorney.
A POA is useful as a means of ensuring a person chosen by the principal takes control of the principal’s personal, legal and financial affairs if and when the principal is unable to do so.
A POA can be made in relation to personal matters, financial matters or both.
Financial powers include anything related to the financial or property affairs of the principal, such as paying expenses, undertaking a real estate transaction or making money available to the principal for personal use.
Personal powers relate to personal or lifestyle affairs, such as services for the principal, where and with whom principal lives, diet and dress.
The POA can commence immediately upon execution of the document, or when the principal ceases to have decision making capacity.
The POA may specify that the power starts at different times for different matters. For example, this could be immediately for financial matters, and for personal matters, when the principal ceases to have decision-making capacity. It can also include limitations on the power of the attorney
What is an Appointment of Medical Treatment Decision Maker?
It is no longer possible to appoint someone as a medical power of attorney. Instead, you can appoint a Medical Treatment Decision Maker (AMTDM).
A Medical Treatment Decision Maker is an adult appointed by the principal to make medical treatment decisions on their behalf when they no longer have decision-making capacity.
You can appoint more than one medical treatment decision maker, but only one medical treatment decision maker can make decisions at any one time.
The medical treatment decision maker must make the decisions that they reasonably believe the principal would have made if they had medical treatment decision making capacity, whether or not they agree with it or think it is in their best interests.
The medical treatment decision maker may make a medical treatment decision on behalf of a principal who has lost capacity; however, they must first consider any valid and relevant values directive.
What is an Advanced Care Directive?
The principal may also complete a document called an ‘Advanced Care Directive’ (ACD) to be provided to the medical treatment decision maker.
An ACD allows a principal with decision-making capacity to set out lawful, binding instructions or preferences and values in relation to their medical treatment in the event they no longer have decision-making capacity about their medical treatment. In most circumstances, health practitioners are bound by instructional directives outlined within an ACD.
In an advanced care directive, the principal can include either or both:
An instructional directive with legally binding instructions about future medical treatment they consent to or refuse.
A values directive which documents their values and preferences for their medical treatment decision maker to consider when making decisions for them.