Many of us understand the importance of having a Will in place to distribute our assets when we die.
But what happens if we lose the ability to make our own decisions for financial, personal and medical matters?
A Will only comes into effect when you die, so it is equally important to also have documents in place authorising a person or persons to make decisions for you if you are unable to make them for yourself during your lifetime. This is where Enduring Powers of Attorney and Appointments of Medical Treatment Decision Makers fill that gap.
What are Enduring Powers of Attorney?
In Victoria, there are three types of powers of attorney which you can put in place.
Enduring Power of Attorney (Financial)
In this document, you can appoint one or more people to deal with your financial matters on your behalf. Financial matters can include dealing with banks and investment companies, buying and selling assets, paying bills and buying and selling property. You can choose when your attorney’s power commences to provide greater flexibility for yourself and your attorneys. For example, if you are overseas, you can instruct your attorney to act on your behalf while you are out of the country.
Enduring Power of Attorney (Personal)
In this document, you can appoint one or more people to deal with personal matters on your behalf. Personal matters can include deciding where you live (i.e. whether you move into aged care), how you dress, what you eat, when you get a haircut and who you associate with. Given these matters are very personal in nature, your attorney’s power generally only commences if you were to lose capacity, as evidenced by a letter from a medical practitioner.
Appointment of Medical Treatment Decision Makers
Although medical decisions are also personal in nature, this document differs from the Enduring Power of Attorney (Personal) because it only deals with consenting or withholding consent to medical decisions.
In this document, you can only appoint one person at a time (not jointly) to make medical decisions on your behalf. Your medical decision maker, by law, is required to make decisions that they would reasonably believe is a decision that you would have made if you had capacity.
To ensure that your medical decision makers know your preferences, you can complete a document called an Advanced Care Directive. This assists your chosen medical decision makers to make a medical decision for you based on your beliefs and values. You can elevate it from a values directive to a binding directive in which you specify what medical procedures you consent to or what you withhold consent to. Binding directives require witnessing by a doctor.
Isn’t my next of kin automatically entitled to make decisions for me?
For financial and personal matters, this is not the case.
Although it may seem practical that, for example, your spouse, or your adult child can automatically sign off on financial and personal decisions for you (as long as they provide medical evidence of your lack of capacity), the law in Victoria prevents next of kin from making those decisions without being validly appointed.
However, for medical matters, yes, the law in Victoria does allow next of kin to make medical decisions for you.
There is a set hierarchy of people in your life who have legal final say on your medical treatment, if you cannot give the doctor your decision yourself. This set hierarchy is only applicable if you do not have a valid Appointment of Medical Treatment Decision Maker document in place.
The Medical Treatment Planning and Decisions Act 2016 (Vic) at section 55 (3) provides the following order of medical treatment decision makers:
- Spouse/domestic partner;
- Primary carer;
- Your adult child (and if more than one, the eldest);
- Your parent (and if more than one, the eldest); and
- Your adult sibling (and if more than one, the eldest).
Although the law states that the people listed above are to be in a close and continuous relationship with you, in some cases, the prescribed hierarchy of medical decision makers may not be suitable in your circumstances. This is a strong reason for you to consider putting in place your own hierarchy via an Appointment of Medical Treatment Decision Maker document.
What happens if I do not have Enduring Powers of Attorney in place?
If you lose capacity without Enduring Powers of Attorney for financial and personal matters in place, a person may make an application to the Victorian Civil and Administrative Tribunal (VCAT) to become an administrator (who deals with financial matters) and/or a guardian (who deals with personal matters).
Under the Guardianship & Administration Act 2019 (Vic) section 32, VCAT can appoint an administrator or guardian who is:
- Over the age of 18;
- Someone who VCAT is satisfied will act in accordance with the duties imposed at law on an administrator and guardian;
- Not in a position of conflicting interests with you;
- Is a “suitable person” to act for you; and
- For administrative matters, has sufficient expertise to make decisions about your financial matters.
When considering whether someone is a suitable person to act for you, VCAT must take into consideration the following:
- Your will and preference, as far as they can be ascertained;
- Preserving any existing relationships that you have which are important to you;
- Desirability of appointing a relative of yours, or someone who has a personal relationship with you, rather that someone who you do not have such relationship with; and
- Whether the proposed administrator/guardian will be available and able to meet and communicate with you.
If VCAT deems that there is nobody appropriate in your life to fulfil the role of guardian or administrator, they can appoint the Office of the Public Advocate as your guardian, and State Trustees Limited or a private trustee company as your administrator.
The process a family member or friend is required to go through in order to be appointed as your guardian or administrator can be time consuming, stressful and even costly, and ultimately, VCAT has the final say on who is appointed. This is why it is important to have Enduring Powers of Attorney in place while you have capacity, so you have peace of mind knowing that you have made the decision as to who looks after your affairs, yourself.
How we can help
The Wills, Estate Planning and Structuring team at Moores is one of the largest in Australia and can assist you in preparing your Will and Enduring Powers of Attorney to ensure that your assets are not only looked after in the event of your death, but in the event of your incapacity to make decisions.
Contact Us
Please contact us for more detailed and tailored help.
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