When we think about our estate planning, we often think that a will is sufficient. Without understating the importance of a well drafted will, I cannot overstate to the importance of planning for the possibility of incapacity. In this regard, it is my view that an Appointment of Enduring Guardian and an Enduring Power of Attorney document should sit alongside your will in your estate planning arsenal.
Legal capacity is the first requirement when it comes to providing instructions to a lawyer and we can lose it without warning through injury (for example, an acquired brain injury) or through illness (for example through a stroke, dementia or mental illness). No one is immune from the risk of sudden incapacity.
An Enduring Power of Attorney is a document that allows you to appoint a trusted person (or persons) to look after your legal and financial matters if you temporarily or permanently lose the capacity to make these decisions for yourself. Under this document, your attorney has the power to, for example, operate your bank accounts, attend to the sale of assets (including your house), deal with services on your behalf, attend to legal matters on your behalf and deal with Centrelink and so on. This document has the flexibility to become operative straight away (i.e. even when you still have capacity).
When it comes to your health and lifestyle, however, a document called an Appointment of Enduring Guardian come in to play. Your guardian is the person (or persons) that you appoint to consent to medical and dental treatment on your behalf, decide where you will live, arrange personal services for you and can even refuse consent to medical treatment in specific circumstances (i.e. during palliative care). This document can only ever become operative if or when you lose capacity. No one can consent to these things on your behalf whilst you have the capacity to do so yourself.
Enduring Power of Attorney and Appointment of Enduring Guardian documents dovetail together to ensure that all of your important needs are taken care of. Both roles are fiduciary duties, which means that your attorney and your guardian need to always act in your best interest and cannot benefit in any way from exercising their powers.
If you were in a position where you no longer had legal capacity and you did not already have these documents in place, it can be quit onerous on your loved ones to quickly obtain the legal authority they require to make these decisions on your behalf. In this instance, your loved ones would need to make an application to the NSW Civil & Administrative Tribunal to obtain a Guardianship Order and a Financial Management Order. The discretion then lies with the Tribunal to decide who will exercise these functions and it may see fit to appoint the NSW Trustee & Guardian, or another person who you would not have chosen for yourself.
Planning for incapacity means that you maintain control and have certainty over who you will have making serious decisions on your behalf when you are at your most vulnerable. I like to think about them as an insurance policy – you hope that you never need it, but if you do need it you will be very glad that you have it!
If you would like to discuss your estate planning with our estate planning lawyer, please phone our office on (02) 4322 6666 and make an appointment with Naomi Morris today. Naomi can meet with you at either the Gosford or Wyong office.