Common Myths About Powers of Attorney
An Enduring Power of Attorney is an important part of your estate plan, but there are plenty of misconceptions about what it does.
People often assume an attorney gets complete control over their affairs, that an EPA only matters when you're elderly, or that having a Will means they don't need one.
There are also plenty of questions about how an Enduring Power of Attorney works alongside an Advance Health Directive.
Let's clear up some of the most common myths.
Myth 1: A Power of Attorney Gives Someone Total Control Over Your Life
It doesn't. An Enduring Power of Attorney allows you to appoint someone you trust to make decisions on your behalf about the matters you give them authority to deal with.
In Queensland, an EPA can cover:
Personal matters, including where you live, the support and services you receive, and health care.
Financial matters, including paying expenses, managing investments, selling property, and dealing with a business.
You can choose who you appoint and whether you appoint one person or more than one person. You can also specify the types of decisions your attorney can make.
There are also important legal limits and duties that apply to attorneys. They must act in accordance with the legal principles and obligations that govern their role.
Your attorney cannot simply do whatever they want with your affairs.
Choosing the right person is still extremely important. An attorney can have significant authority, particularly when dealing with financial matters, so this is someone you need to trust.
Myth 2: An Enduring Power of Attorney Only Takes Effect When You Lose Capacity
This depends on the type of decision. This is one of the most common misconceptions about EPAs.
For personal matters, an attorney can only make decisions for you when you don't have capacity to make those decisions yourself.
For financial matters, you can decide when your attorney's authority begins. You can allow them to act immediately, from a particular date, or only when you no longer have capacity to make financial decisions.
This means an EPA doesn't automatically mean someone else takes over your finances as soon as you sign it.
The document can be structured to reflect what you want.
Myth 3: You Don't Need an Enduring Power of Attorney if You Have a Will
A Will and an EPA do completely different jobs. Your Will deals with what happens to your estate after you die. An Enduring Power of Attorney deals with decision-making while you're alive.
If you lose capacity, your attorney can make the relevant personal or financial decisions on your behalf, depending on the authority you've given them.
Without an EPA, your family may not automatically have the legal authority to deal with everything on your behalf. Depending on the circumstances, QCAT may need to appoint a guardian or administrator.
There are also circumstances where a statutory health attorney can make health care decisions for you if you haven't made an EPA or Advance Health Directive.
Having an EPA allows you to make the choice about who you want to appoint while you still have capacity.
Myth 4: An Advance Health Directive and an Enduring Power of Attorney Are the Same Thing
They're different documents, and they can work together.
An Advance Health Directive (AHD) allows you to give legally binding directions about your future health care and medical treatment. It can also be used to appoint an attorney for health matters in certain circumstances.
An Enduring Power of Attorney allows you to appoint someone to make personal, including health, and/or financial decisions for you when the relevant authority applies.
The legal distinction is important. An AHD allows you to make certain health care decisions yourself in advance. An EPA allows you to nominate someone you trust to make decisions on your behalf when you can't make those decisions yourself.
For some people, having both documents forms an important part of their lifetime planning.
Myth 5: Only Older People Need an Enduring Power of Attorney
An EPA can be relevant at any age. Losing decision-making capacity isn't something that only happens in old age.
An accident, serious illness, stroke, or other unexpected event can affect your ability to make decisions for yourself.
You might only be unable to make decisions temporarily. You might lose capacity permanently. You can't predict when it might happen.
An EPA allows you to choose who you want making decisions for you if you become unable to make those decisions yourself.
That's useful whether you're 30, 50, or 80.
Myth 6: Once You Appoint an Attorney, You Can't Change Your Mind
You can revoke your EPA while you have capacity. You remain in control of your estate planning while you have the capacity to make and revoke your legal documents.
If your relationship with an attorney changes, your circumstances change, or you simply decide you want someone else to act for you, you can revoke your EPA and make a new one while you have capacity. There are formal requirements for doing this.
This is one of the reasons it's important to review your estate plan when your circumstances change.
Myth 7: If I Lose Capacity, I Won't Care Who Makes Decisions for Me
Think about the decisions someone might need to make if you can't make them yourself.
Personal decisions can include:
where you live;
who you live with;
what support and services you receive; and
aspects of your health care.
Financial decisions can include:
paying your expenses;
managing your investments;
selling property; and
managing a business.
The person making those decisions could have a significant impact on your quality of life and your financial position.
Choosing your attorney deserves careful consideration. Your attorney should be someone you trust to understand your wishes, respect your values and preferences, and carry out their legal responsibilities.
Myth 8: I Can Just Sort Out an Enduring Power of Attorney When I Need One
An EPA needs to be made while you have capacity. This is one of the most important things to understand.
To make an Enduring Power of Attorney, you must have the capacity to understand the nature and effect of the document and make it freely and voluntarily.
If you wait until you're no longer able to make the document, it's too late to appoint your chosen attorney under a new EPA.
Your family may then need to consider other legal options, including an application to QCAT.
Estate planning is about making decisions while you're able to make them.
So, do you need an Enduring Power of Attorney?
For many adults, an EPA is an important part of planning for the possibility of losing capacity.
The key question is not simply whether you have an EPA. It's whether the document reflects your circumstances and gives the right people the right authority to make decisions for you.
Your EPA should sit alongside the other parts of your estate plan, including your Will and, where appropriate, your Advance Health Directive.
And like the rest of your estate plan, it should be reviewed when your circumstances change.
Choosing who will make decisions for you is a significant decision. It's worth taking the time to understand what an EPA does, what authority you want to give your attorney, and who you trust to step into that role if you need them.