What there is to know about Power of Attorney

We often hear stories of people faced with moral and sometimes religious dilemmas about turning off life support to allow someone they love, or for whom they have a responsibility, to die with some last vestige of dignity. Happily, most of us are going to grow to an even older age than previous generations, but delayed death brings with it a whole host of issues relating to both our financial and medical wellbeing.

Situations arise in our daily lives, where the ability to allow someone else to make decisions on our behalf, is convenient for a variety of reasons and makes good sense. It is a good idea to be aware of the advantages and disadvantages of delegating Powers of Attorney.

Powers of Attorney are documents that allow other people you select, to make specific or even general decisions on your behalf, and hopefully, in your best interests. Their decisions are often subject to conditions specified by you and to some extent governed by legislation. It is probably stating the obvious to suggest that, you think very carefully about the person to whom you wish to entrust your life and/or your financial wellbeing.

There are other scenarios where you may sensibly wish for someone to make decisions on your behalf, when you no longer have the mental capacity to do so. However, you need to be aware that the law, has a strict interpretation of mental incapacity. In reality, it applies to people with demonstrable medical conditions such as Dementia and Alzheimer’s disease or people who do not understand the nature and effect of what they are doing. In these circumstances it is generally more appropriate to give specific Powers of Attorney which are called Enduring Powers of Attorney. These Powers of Attorney continue notwithstanding the mental incapacity, which would ordinarily terminate a Power of Attorney. I strongly recommend you include instructions to make these Enduring Powers of Attorney when you are making or reviewing your Wills.

The form in which these Powers are created and witnessed is quite specific and must be followed strictly in order for the Powers to be valid. The legislation creating the Powers also imposes clear fiduciary responsibilities and obligations, on the person or persons you appoint, to ensure that they act honestly and in your best interests. The legislation also provides ready and reasonably inexpensive access, in the State of Victoria, to the judicial system or courts through the Victorian Civil and Administrative Tribunal (VCAT) for anyone who believes the attorney is not acting properly in the exercise of the Enduring Power of Attorney.

Finally, you may be interested to know that having made the decision to grant any or all of these powers to someone, you may change your mind and revoke them while you have mental/legal capacity. If you are wanting to go down this track, I recommend you have both the Powers of Attorney and any Deed of Revocation prepared by a lawyer. There is an old legal maxim which applies equally to non-lawyers in these situations. “He who acts for himself has a fool for a client”.