Who Makes Decisions If You Lose Capacity? - Enduring Powers Explained

Most of us assume that if we have a stroke, a serious car accident or develop dementia, our spouse or adult children will simply step in and handle things. In NSW, that isn't automatically the case. Being someone's husband, wife or child does not give you legal authority to sign documents, operate their bank accounts or sell their property.

Losing capacity can happen at any age, suddenly or gradually. The good news is that two simple documents let you decide, in advance, who will make decisions for you if you can't: an Enduring Power of Attorney and an Appointment of Enduring Guardian. Here's how they work, and why every adult should consider having both.

Enduring Power of Attorney: your money and property

An Enduring Power of Attorney appoints one or more people (your "attorneys") to manage your financial and legal affairs. That can include paying bills, managing bank accounts and investments, dealing with Centrelink and the ATO, and buying or selling property.

The key word is enduring. An ordinary (general) power of attorney stops working the moment you lose mental capacity, which is exactly when your family needs it most. An enduring power continues.

Under the Powers of Attorney Act 2003 (NSW), you can choose when it starts: immediately, or only once you lose capacity. You can also appoint attorneys jointly or severally, name a substitute, and place limits or conditions on what they can do. Your attorneys must sign to accept the appointment before they can act, and your signature must be witnessed by a solicitor or another prescribed witness who certifies that the document was explained to you.

An attorney cannot make health or lifestyle decisions for you. For that, you need an enduring guardian.

Enduring Guardianship: your health and lifestyle

An Appointment of Enduring Guardian, made under the Guardianship Act 1987 (NSW), lets you choose someone to make personal, health and lifestyle decisions for you. Unlike a power of attorney, it only takes effect if you lose capacity.

Depending on the functions you give them, your enduring guardian can decide:

• where you live, including whether you move into aged care

• what health care and support services you receive

• whether to consent to medical and dental treatment

You can also give directions about how decisions should be made, for example your wishes about particular treatments or end-of-life care. Like an attorney, your guardian must sign to accept the role, and the document must be properly witnessed.

What happens if you don't have them?

If you lose capacity without these documents, your family may need to apply to the Guardianship Division of the NSW Civil and Administrative Tribunal (NCAT). The Tribunal can appoint a guardian, and can make a financial management order placing your affairs under the management of a private manager or the NSW Trustee and Guardian.

This process takes time, can be stressful for loved ones at an already difficult moment, and the person appointed may not be the one you would have chosen. Families sometimes disagree about who should take on the role, adding conflict to an already emotional situation. Making your own appointments while you can keeps those decisions in your hands.

Choosing the right people

The people you appoint will have significant authority over your life, so choose carefully. Consider someone who:

• you trust completely to act in your interests, not their own

• is organised and capable of handling paperwork and money

• understands your values and will respect your wishes

• is likely to be available and willing over the long term

Your attorney and guardian don't have to be the same person. Talk to them first, so they understand what you'd want.

You can only make or change these documents while you have capacity, so don't wait for a diagnosis. Review them after major life events such as marriage, separation, divorce or change in circumstances the death of an appointee.

How Lamrocks can help

These documents work best alongside an up-to-date Will as part of a complete estate plan. At Lamrocks Solicitors, we have helped families across Penrith and Western Sydney plan ahead for many years. We'll explain your options in plain English, tailor your documents to your circumstances, and make sure they are properly signed, witnessed and accepted so they work when they're needed.

If you don't yet have an Enduring Power of Attorney and Appointment of Enduring Guardian, or yours haven't been reviewed in a while, contact Lamrocks Solicitors today to book an appointment.