Publications - Estate planning

Do I Need a Power of Attorney?

What is an Enduring Power of Attorney? Do I really need one? Is a will enough?

These are questions which we are often asked in practice.

The answer is, every individual over the age of 18 should have both a will AND an enduring power of attorney (“EPOA”). Having these documents is undoubtedly the best way to ensure that your wishes are carried out, when can’t make your own decisions.

All too often these estate planning documents are put on the backburner, when they really deserve greater attention.

Specifically, some clients will understand the need for a will but will ignore recommendations that they also make an EPOA. Sometimes there is confusion about an EPOA, with some thinking that making their will is enough and does the same thing as an EPOA. We can’t stress enough that this is not correct, and an EPOA is an altogether different animal.

An EPOA, in the simplest terms, is a document where you appoint a person or persons to make decisions for you, in the event that you are rendered incapable to make those decisions yourself.

A person making a will or EPOA must have the capacity to understand the effect of the document they are making, and ironically it is often when they have lost that capacity and therefore can’t put those estate plans in place that they are most in need of those arrangements, which they can’t have.

Injuries and illness usually come along when we are least expecting them. It is therefore important to have your affairs in order and to take a proactive approach, rather than scrambling at the last minute only to find it is too late.

EPOAs can be drafted to give powers to your nominated attorney dependent on your anticipated needs. You can elect to give a person authority to make decisions regarding your financial affairs or health issues, or both. The attorney’s power in financial matters can commence when you determine, whereas the health attorney’s power will only commence when you lose capacity.

It is also advisable that you appoint an attorney if you are about to travel overseas as your attorney in Australia can take care of your affairs for you while you are away, and particularly if you are seriously injured or fall ill while travelling.

There are limits on the powers that an attorney holds, for example among other things, the attorney cannot amend your will. Also, restrictions can be placed on the powers granted to attorneys.

Marriage, registered relationships and divorce may also affect the operation of an EPOA and are all triggers to review your EPOA.

We encourage appointing more than one attorney as it offers some peace of mind that two or more attorneys will act together in making the decisions so that they can support each other with difficult decisions and are accountable to the others, and if one cannot act, then the others still can.

Separate again to the EPOA is the Advanced Health Directive (“AHD”) which is a document that is completed in conjunction with your doctor, as medical expertise is required when considering particular treatments that you decide are to be either provided or withheld if you cannot communicate your wishes because of a serious medical condition.

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