Enduring Powers of attorney (financial) and medical treatment decision makers
Enduring Power of Attorney (Financial) vs Medical Treatment Decision Maker (formerly Medical Power of Attorney. What Are They and Do You Need Both?
Most people assume that if something happens to them, their partner or family can step in and assist with managing their finances or make medical decisions for them. In reality, it’s not that simple.
Without the right legal documents in place, they may not have the legal right to do this. If someone is unable to manage their own affairs, they may be left in a situation where there are delays in someone being legally able to assist in managing their finances or make medical decisions for them leaving them in a vulnerable position.
To avoid this situation, there are two key documents that can be prepared in advance – An EnduringPower of Attorney (Financial) and the appointment of a Medical Treatment Decision Maker (Medical Power of Attorney).
Understanding what these documents are, what they do and the difference between them can make all the difference if something were to happen to you.
What is an Enduring Power of Attorney (Financial)?
An Enduring Financial Power of Attorney is a legal document that allows you to appoint someone you trust to make financial and legal decisions on your behalf.
This can include managing your bank accounts, paying bills, dealing with property, or handling investments. In many cases, it is set up as an enduring Power of Attorney, which means it continues to operate if you lose the capacity to make decisions yourself.
This document is particularly important if you own property, run a business or have ongoing financial commitments such as bills to pay.
The person you appoint as your Enduring Power of Attorney cannot make medical decisions for you. To appoint someone to make medical decisions for you, you must have a Medical Treatment Decision Maker in place.
What is a Medical Treatment Decision Maker?
A Medical Treatment Decision Maker is someone you appoint to make medical decisions for you if you are unable to do so.
This includes decisions about treatment, care, and, in some cases, end-of-life choices. This role ensures that someone you trust can speak with doctors and make decisions that represent the choices that you would make if you were able to make them. Parameters can be put around the decision making powers give to your nominated decision makers.
A Medical Treatment Decision Maker cannot manage your finances or financial affairs.
Common Misconceptions - There are a few assumptions we regularly see:
My spouse can automatically make decisions for me - This is not always the case, particularly when it comes to financial or legal matters where you have separate bank accounts or finances or even own property jointly together.
I’m too young to worry about this – This is such a common belief, however unexpected illness or injury can happen to anyone, at any time. These documents aren’t just for later in life. Being prepared means your loved ones can assist you immediately so you are not left in a vulnerable position. It is too late to do them when you need them.
One document covers everything - A Power of Attorney does not give authority over medical decisions and Medical Treatment Decision Makers do not give you power to manage someone’s finances. Both documents are required and are as equally important.
Why would I get a lawyer to make them when I can just use DIY Forms
You can use DIY forms available that are free or low cost. Seems like a simple and cost-effective option, right? But just like anything, you get what you pay for.
The most often misunderstood aspect of these documents is the legal implications, as well as the power these documents give to someone.
A lawyer can advise you of all your options as to whom you can appoint, what restrictions you can add along with other advice. The forms must be completed, signed, and witnessed correctly to be valid. Small errors such as incorrect wording, improper witnessing, or unclear instructions can lead to disputes or even make the document ineffective when it is needed most. If you are at stage where your Medical Treatment Decision Maker or Power of Attorney document is needed and is found to be invalid, it cannot be easily fixed and by that stage, is usually too late.
Obtaining legal advice on these documents and having them drafted by an experienced lawyer ensures that your documents are:
Properly and carefully drafted for your personal circumstances;
Made by you from an informed position;
Compliant with Victorian legal requirements;
Clearly worded to avoid ambiguity or conflict;
Signed and witnessed correctly so you can be sure that will not be rendered invalid.
In short, having these documents professionally prepared is not just about convenience, it is about protection. It helps ensure your wishes are clear, valid, and able to be relied upon when it matters.
What Happens If You Don’t Have an Enduring Financial Power of Attorney or Medical Power of Attorney in Place?
If something were to happen to you and you are no longer able to make decisions for yourself, your loved ones will not be able to step in and assist. This will mean that they may need to apply to VCAT (Victorian Civil and Administrative Tribunal) to be formally appointed to act on your behalf.
This can lead to:
· Delays in important decisions;
· Additional costs;
· Disputes between family members;
· Loss of control over who is appointed;
· Ongoing reporting obligation by the appointed administrator;
· Having someone appointed that you would not have selected.
Further, often a VCAT appointed person will have to report to VCAT every year and re-apply every few years to continue the appointment.
Planning ahead avoids these complications so that you are not left in a vulnerable position during difficult times.
Choosing the Right Person
Appointing the right person is just as important as having the documents in place.
Obtaining legal advice assists you in selecting the most appropriate person/people to appoint, taking into consideration your personal situation and circumstances. It will also help you consider things such as:
· Who is trustworthy and reliable;
· Who has the skills to carry out the task;
· Who would be willing to take on the role;
· Who is capable of making decisions under pressure;
· Who is likely to respect your wishes
· Legislation and things to consider that often are not thought of or understood.
If you already have a Medical Treatment Decision Maker and Financial Power of Attorney, it is also important to review these appointments over time, particularly if your circumstances change to ensure they still reflect your current circumstances and wishes.
Does the appointed Power of Attorney/s have legal obligations?
An Attorney has strict legal responsibilities. They must act in the person’s best interests, follow any instructions set out in the document, keep the person’s finances and affairs separate from their own, keep records of any transactions, act honestly and with reasonable care and avoid any conflicts of interest. It is an offence to misuse funds or transact in a way that is not in the best interests of the principal.
Do Medical Treatment Decision Makers have legal obligations?
A Medical Treatment Decision Maker has similar legal obligations to a Power of Attorney, included but not limited to acting in the best interests of the Principal, making decisions based on the Principal's known wishes and values, act honestly and in good faith and more.
When Should You Make an Enduring Financial Power of Attorney and Medical Treatment Decision Maker?
There is no good or accepted time to have these documents made. Our suggestion is that anyone over the age of 18 should really consider having these in place as nobody can ever know what might happen.
Specific circumstances may also trigger a greater importance for someone to consider these documents, such as:
· If you purchase or are thinking about purchasing property;
· Starting, growing or if you already have, a business;
· Having financial commitments;
· Having children;
· Have had any major life changes; or
· Have health issues or concerns.
Frequently Asked Questions
Can a Power of Attorney or Medical Treatment Decision Maker obtain certified copies of the Power of Attorney document.
We can provide an Attorney or Decision Maker certified copies of the Power of Attorney or Medical Treatment Decision Maker document, provided we have evidence from your treating doctor, that you no longer have capacity to understand or manage your own affairs. Even if the documents say that the appointment commenced immediately. We cannot give the document to your appointed attorney without that evidence. If you still have capacity, we cannot provide these documents to an Attorney, they can only be requested by and provided to you; because they are your documents, not the attorney’s.
Can a Power of Attorney obtain a copy of or retrieve my original Will?
We get asked this a lot. The answer is no. Even if we have evidence that you no longer have capacity, an attorney or medical treatment decision maker has no legal right to obtain your Will, or a copy of it. The Will is owned by you and only comes into effect once you pass away. The only person who can obtain this, is the Executor of the Will and only after the Will maker has passed away.
What happens if I lose capacity and my attorney is not acting in my best interests?
This can get really tricky. If this happens, someone may need to bring action against the attorney in VCAT or Court to have them removed as attorney. If found that they have not acted in your best interests such as misappropriated funds, they may be forced to repay the funds back. But this is a great example of why obtaining legal advice to make an informed decision on who you appoint is so crucial.
Final Thoughts
Putting a Power of Attorney and a Medical Treatment Decision Maker in place is a straightforward step, but it can have a significant and lasting impact when it matters most.
It ensures that the right people are making decisions for you across both your financial affairs and your health if you’re unable to do so yourself. This is a small price to pay for the lasting effect these can have.
Trish says it is like an insurance policy. Nobody pays their house or car insurance hoping they have to use it. They pay it “just in case”. The upside of these documents is that you pay once and do not have to pay a premium every year. The team at Wollerman Shacklock Lawyers can help guide you through the process and provide you with advice on your options so you can make informed decisions. Contact us today.