Appointment of a Power of Attorney and Enduring Guardian is a very important component of any estate planning exercise. These legal appointments are often overlooked and misunderstood as something for mature age or elderly persons. It is often wrongly assumed that a person’s Next Of Kin (NOK) will just be able to just ‘pick it up’, your NOK actually has no legal authority while you are still alive. For instance they are unable to enter financial agreements, complete legal documents in your name or perform legal duties on your behalf. It is also important to remember that a person can lose capacity at any time due to accident or illness and you want to ensure that your affairs are handled appropriately.
A Power of Attorney allows your Attorney to manage your financial affairs if you are unable to or if you have lost capacity to make important financial decisions for yourself.
An Enduring Guardian allows your guardian to manage your personal or lifestyle affairs regarding your health and living arrangements should you be unable to make those decisions for yourself.
Your Appointees should someone you know and trust to make decisions on your behalf and in your best interests. Appointments can be made to more than one person, but it needs to be clear how those people will operate together, for instance they can be appointed:
- Jointly – make decisions together
- Jointly and Severely – Make decisions together and separately of each other
- Severely – make decisions separately of each other
You can also appoint substitute attorneys/guardians in case your original appointments are no longer able to fulfill their role.
What happens if a person has lost capacity without a Power of Attorney or Enduring Guardian?
If a person loses capacity and they have not appointed an enduring guardian or power of attorney then someone will need to apply to the NSW Civil and Administrative Tribunal (NCAT) Guardianship Division and seek guardianship and/or financial management orders.
Guardianship orders are time-limited and are typically made for about 12 months or less, after which NCAT will hold another hearing to review the order and determine if it should continue or be amended.
Financial management orders are not time specific, however, NCAT will and do review these orders if ordered by the Tribunal or on application by anyone who has concerns for the welfare of the person subject to the order. The NSW Trustee will also decide what powers the financial manager has, this is known as ‘directions’.
This of course becomes extremely complicated and time-consuming especially in circumstances where a person operates a business or commercial position such as directors.
Contact our team at Catron Simmons Lawyers for professional help in drafting, executing and safe storage of a valid Power of Attorney and enduring Guardian tailored to meet your specific needs.