POWERS OF ATTORNEY

An enduring power of attorney enables you to appoint a trusted person of your choice to make personal and health and/or financial decisions. The power of attorney for personal and health matters only commences in the event that you lose capacity. The power of attorney for financial matters may commence at a nominated time or in the event that your lose capacity. 

An enduring power of attorney is an important part of your estate plan. It is important to put an enduring power of attorney in place while you have capacity – this is why our estate planning packages include an enduring power of attorney.

The person making the power of attorney document.

The person nominated in a power of attorney document to make decisions on behalf of the principal.

A general power of attorney can be made by an individual person or a company.

A general power of attorney enables the attorney to make financial matters only while the principal has capacity.

A general power of attorney ceases to operate once the principal loses capacity.

An enduring power of attorney continues to operate, even if the principal has lost capacity to make decisions for themselves.

“Personal matters” relate to personal or lifestyle decisions affecting the principal. Examples include decisions about support services, where and with whom you live, health care and legal matters that do not relate to your financial or property matters.

The attorney’s powers to make personal and health decisions commences only when the principal does not have capacity to make decisions.

“Financial matters” relate to the principal’s financial or property affairs. Examples include paying expenses, making investments, selling property and carrying on a business.

The principal can choose when the power to make financial decisions commence. That is, the principal can state that the power to make financial decisions commences when that do not have capacity to make financial decisions, immediately or they may specify a certain time, circumstance or on a certain occasion.

An attorney must comply with numerous legal duties and obligations and, most importantly, must act honestly and with reasonable diligence to protect the principal’s interests.

Often, special terms and instructions need to be added to the enduring power of attorney document to ensure that any pre-existing or likely arrangements between the principal and attorney do not breach the attorney’s legal duties and obligations (for example, an attorney and their family members are not allowed to enter into any conflict transactions such as buying the principal’s car).

For more information about the obligations of attorneys, download the following document produced by the Queensland Government: Factsheet: Obligations of attorneys under an enduring document

Capacity is a legal concept that has different meanings and requirements, depending on the decision or situation in question.

The principal has capacity to make a certain decision if they are able to:-

  • understand and retain (even for a short while) the information relating to the decision
  • understand the main choices available
  • understand and weigh up the consequences of the choices
  • communicate their instructions
  • make the decision freely and voluntarily.

This is called “the decision making process”.

The principal’s capacity can depend on:

  • the type of decision being made
  • the complexity of the decision
  • the time the decision is made and
  • the support and information available

Capacity is ‘decision-specific’ – that is, a principal may have capacity to make simple decisions like where they want to live, but may not have capacity to make financial decisions like whether to sell their house.

Capacity is ‘time-specific’ and may fluctuate. A principal with a medical condition or illness may lose capacity temporarily but regain capacity at a later time. A principal with dementia may have capacity on some days or even at different times throughout the day but lack capacity at other times.

Capacity may improve with support – that is, practical steps may assist the principal in the decision making process such as being in a familiar environment or the use of photographs to identify family members.

If a person’s ability to carry out the decision making process is impaired, the attorney will be needed to make decisions for them.

If the attorney’s power commences “when I do not have capacity”, the principal will need to undergo a capacity assessment by their general practitioner or other medical practitioner to enable the attorney to rely on the power of attorney document to make decisions for the principal.

The medical report is only the opinion of the person preparing the report and may be challenged by an interested party. Only the Queensland Civil and Administrative Tribunal (QCAT) and the Supreme Court can make a formal finding or decision about the principal’s capacity. 

For more information about capacity assessments, download the following document produced by the Queensland Government: Queensland Capacity Assessment Guidelines

Capacity is a legal concept that has different meanings and requirements, depending on the decision or situation in question. There is a specific legal test of capacity for a principal to make an enduring power of attorney.

In general terms, the principal has capacity to make an enduring power of attorney document if they are able to:-

(a) Understand the nature and effect of the document; and

(b) Make the document freely and voluntarily.

The level of understanding required depends on the complexity of the principal’s financial and personal affairs. The principal does not need to know all of the complexities of the types of transactions the attorney may be required to undertake on their behalf but needs to be able to generally understand:-

  • their own personal and financial affairs that will be managed by their attorney
  • the types of decisions that are likely to be made by the attorney
  • the scope of the power given to the attorney.

The principal must be capable of making the enduring power of attorney document free of coercion or undue influence – that is, it must be clear that the principal if not being pressured by a family member to make the enduring power of attorney document.

To be eligible to be your attorney, they must:-

  • be 18 years or older
  • have capacity to make the decisions they are appointed for
  • not be your paid carer or have been your paid carer in the last three years (a person is not a ‘paid carer’ if they just receive a Centrelink carer’s pension for looking after you)
  • not be your health provider
  • not be a service provider for a residential service where you live
  • not be bankrupt or taking advantage of the laws of bankruptcy, if appointed for financial matters.

(The term ‘attorney’ does not mean ‘lawyer’)

You should consider appointing a person as your attorney for financial matters who:

  • you trust to make sound decisions about your financial and property affairs
  • will put your needs, rights and interests ahead of their own and others in all decisions
  • is able to manage property and money well
  • will understand their legal obligations and duties as an attorney for financial matters
  • can communicate effectively and protect and promote your interests
  • is confident liaising with financial institutions, lawyers and property agents.

You should consider appointing a person as your attorney for personal / health matters who:

  • you trust to make decision you would agree with about your personal care and health care and welfare
  • you have discussed your views, wishes and preferences with
  • will put your needs, rights and interests ahead of their won and others in all decisions
  • will understand their legal obligations and duties as an attorney for personal (including health) matters
  • will be available to make healthcare decisions and decisions about your care and welfare on your behalf
  • will be confident in discussing your health care with your health care providers.

Sometimes personal and health matters can be dealt with on an informal basis or by a statutory health attorney.

The Powers of Attorney Act 1998 lists the priority of who may be your statutory health attorney.

 If you did not appoint an attorney to make personal and health decisions in an enduring power of attorney document when you had capacity, a person may apply to Queensland Civil and Administration Tribunal (QCAT) or the Supreme Court to be appointed as your guardian.

 

Financial matters can rarely be dealt with on an informal basis. If you did not appoint an attorney to make financial decisions in an enduring power of attorney document when you had capacity, a person may apply to Queensland Civil and Administration Tribunal (QCAT) or the Supreme Court to be appointed as your administrator.

 

Sometimes, family members squabble over who should be appointed as your administrator and / or guardian leading to disharmony in the family. QCAT may also appoint a person that you dislike / distrust. By making an enduring power of attorney document while you have capacity, you can choose the person to trust to administer your personal/health and financial affairs for you.