What are Power of Attorney and Enduring Guardianship documents?

In Australia, Powers of Attorney and Enduring Guardianship documents are often discussed during estate planning consultations with your lawyer or financial advisor. This article is designed to give you a general overview of these documents so you can ask the right questions about whether they are right for your circumstances.

What is a Power of Attorney?

A Power of Attorney is a legal document that allows a person (the “donor”) to appoint one (or more) people as their “attorney” to make property and financial decisions on their behalf. While Americans refer to lawyers as Attorneys, in this situation, your attorney is your trusted representative who will deal with your finances.

Power of Attorney documents can be:

• General in nature, meaning that the attorney can make all financial decisions that the donor can usually make themselves; or
• Particular, meaning that the attorney is given only the right to make “particular” decisions, such as decisions relating to particular assets such as a property or funds held in a bank.

The document will also specify exactly when the attorney can make decisions on the person’s behalf, for example:

• For a particular period of time such as while the donor is overseas or unavailable;
• Only up until the donor loses the capacity or ability to make financial decisions for themselves;
• Only after a donor loses the capacity to make financial decisions themselves, such as if they develop dementia; or
• For an unlimited amount of time, starting from the date of the document and continuing if the donor loses the capacity.

An “enduring” power of attorney continues to have an effect after the donor loses the capacity to make financial decisions for themselves. For estate planning purposes, we may suggest an enduring power of attorney which allows your attorney to make financial decisions for you only if you lose the capacity to make them yourself. This protects you should you be diagnosed with a degenerative illness, such as dementia, or where you may become incapacitated due to some other unexpected injury or illness.

What are the requirements to appoint an Attorney?

There are strict requirements to comply with the provisions of the Powers of Attorney Act 2000 (Tas). Your attorney should be someone that you trust and who can manage someone’s finances on their behalf and keep good records.

In Tasmania, the documents must be in a particular form and the attorney/s must sign to accept the appointment. There must be two independent adult witnesses to the donor’s signature.

To have legal effect, the document must be registered with the Land Titles Office. You may revoke the enduring power of attorney at any time by filing the prescribed form. You can find the current registration fees for a power of attorney on the Land Titles Office website.

My partner has my account details, why do I need a Power of Attorney?

While it is common for people to give their partners access to their bank accounts, it may be illegal for people without written authority to be accessing a bank account that is not their own.

Particularly where people have lost the capacity to make financial decisions, a third party (even a family member) should not access a bank account or deal with assets without a power of attorney document or an order from TASCAT appointing them as the person’s attorney.

What is an Enduring Guardianship?

An Instrument Appointing an Enduring Guardian allows you to appoint a person as your “guardian” to make decisions about your health or lifestyle circumstances if you become unable to make decisions yourself.

You can decide to appoint one person or multiple people, either jointly or as alternates if the first is unable or unwilling to act.

Most people assume their next of kin will be able to make lifestyle and health decisions for them. While it’s true that in certain circumstances it is clear who should make these decisions, if you lose capacity without having appointed a guardian then doctors may decide who has sufficient connection with you to consent or refuse treatment on your behalf. Alternatively, TASCAT may appoint a guardian, such as the Public Trustee, to make these decisions for you. Appointing an enduring guardian yourself gives you certainty over who will make these decisions if needed.

What are the requirements for appointing an Enduring Guardian?

An enduring guardianship document must comply with strict requirements. There must be two independent adult witnesses not related to you or your guardian. The document must be in the prescribed form and the guardian/s must sign to accept the appointment.

To have legal effect, an Instrument Appointing Enduring Guardians must be registered with TASCAT (through Service Tasmania). You may revoke the enduring guardianship at any time by filing the prescribed form and paying a fee.

You can find the current fee for the registration of enduring guardianship documents on the TASCAT website. If you cannot afford the fee, you may be able to apply to have it waived.

When should I consider these documents?

Powers of Attorney and Enduring Guardianship documents are generally suggested when people are preparing estate planning documents or when their business arrangements require others to sign financial documents on their behalf. People also consider these when diagnosed with an illness that requires extensive treatment so that others can keep on top of their finances while they are unwell.

You must have the mental capacity to make these appointments and it is too late to appoint someone once medical professionals consider that you have lost capacity. In that situation, if someone wishes to be appointed as your attorney or guardian then they will need to apply to the TASCAT for appointment.

Enduring Guardians and Powers of Attorney in Tasmania

There is no uniformity between states. If you have assets outside of Tasmania, you should seek legal advice in that state as to whether a Tasmanian enduring power of attorney will be recognised in that jurisdiction. Similarly, if you have a document registered in another state and wish to use it here then seek advice on whether it can be relied upon.

What do I do if I need to become a Guardian or Attorney for someone who is already ill?

If you need to become a Guardian or Attorney for someone who is unable to sign these documents then you will need to apply to TASCAT to be appointed. We are experienced in making these applications to TASCAT so give us a call to discuss how we can assist you in your situation.

What don’t these documents cover?

A power of attorney or appointment of a guardian will end on the death of the donor or the attorney. If you want to allow someone to manage your assets after you pass away then you can only do that by preparing a valid Will. See our article about Planning your Will or Common Questions about Estate Planning for more information.

For more information on enduring guardianship documents or powers of attorneys in Tasmania, or information tailored to your situation, call us to speak to one of our experienced lawyers about your circumstances.