What happens without an Enduring Power of Attorney?
It’s easy to assume you’ll always be able to make your own decisions. But what happens if you can’t?
Losing decision-making capacity can happen at any age. An accident, illness, injury, or other circumstances can mean you’re temporarily or permanently unable to make decisions about your finances, your health, or where you live.
An Enduring Power of Attorney (EPA) allows you to appoint someone you know and trust to make decisions for you if you lose capacity. Without one, your loved ones don’t automatically have the legal authority to step in.
What happens if I lose capacity without an Enduring Power of Attorney?
If you lose decision-making capacity without an EPA in place, your family members or other loved ones may not have the legal authority they need to manage your affairs. This can create problems with both your financial decisions and your personal and health decisions.
For example, your loved ones may need to deal with:
accessing your bank accounts to pay your bills;
managing your investments and other financial assets;
dealing with your property;
accessing insurance benefits or making claims;
arranging or paying for your care;
deciding where you live;
making decisions about your healthcare; and
making other personal decisions on your behalf.
Being your spouse, parent, adult child, sibling, or other close family member does not automatically give someone the legal authority to make these decisions for you.
Who makes decisions for me if I don't have an EPA?
If you lose capacity and don’t have an EPA, your loved ones may need to apply to the Queensland Civil and Administrative Tribunal (QCAT) for an appointment as your guardian and/or administrator.
A guardian can be appointed to make personal and health decisions for you, while an administrator can be appointed to manage your financial affairs.
This means your loved ones may have to go through a formal legal process at a time when they are already dealing with the stress of your illness, injury, or incapacity. There can be paperwork, costs, delays, and uncertainty about who will ultimately be appointed.
You lose control over who makes decisions for you
One of the biggest problems with not having an EPA is that you no longer get to choose who makes decisions for you once you have lost capacity.
When you make an EPA while you have capacity, you can choose the person or people you trust to make decisions on your behalf. Without an EPA, you leave the appointment of a decision-maker to the legal process. There is no guarantee that the person appointed will be the person you would have chosen.
Think about who you would want making decisions about:
your healthcare;
where you live;
who provides your care;
how your money is spent;
whether your assets are sold;
your investments; and
your general quality of life.
These are deeply personal decisions.
What if my family disagrees about who should make decisions for me?
Family conflict can make an already difficult situation even more complicated.
If there is disagreement about who should make decisions for you, or concerns about whether someone is suitable to act, the process can become more involved. An EPA gives you an opportunity to make your wishes known while you have capacity and nominate the people you want to have authority to make decisions for you.
It can also include specific terms and powers that give your attorneys guidance or additional authority when managing your affairs.
The right structure will depend on your circumstances, your relationships, your assets, and what you want to achieve.
Can my spouse automatically make decisions for me?
No. Being married or in a de facto relationship does not automatically give your partner unrestricted legal authority to make financial or personal decisions for you if you lose capacity.
Your partner may be someone you would absolutely want to appoint as your attorney. An EPA allows you to make that choice yourself. The same applies to your adult children, parents, siblings, or other people close to you.
What happens to my Will if I lose capacity?
Your Will does not deal with incapacity. Your Will operates after your death and sets out what you want to happen to your estate.
An EPA operates during your lifetime and allows your attorneys to make decisions for you if you lose capacity. This is why a comprehensive estate plan needs to consider both death and incapacity.
Your estate plan may include:
a Will, dealing with what happens after your death;
an Enduring Power of Attorney, dealing with financial and personal decisions during your lifetime if you lose capacity;
an Advance Health Directive, allowing you to make certain health care decisions in advance; and
a Letter of Wishes, providing additional guidance about your wishes and preferences.
Each document has a different purpose.
An EPA is more than a backup plan
It’s easy to think of an EPA as something you only need when you’re older. It isn’t.
A loss of capacity can happen suddenly and unexpectedly. You might be young, healthy, working, raising children, building wealth, or running a business when something happens that means you can no longer make your own decisions.
An EPA is about making sure you choose who steps in for you. It also gives your loved ones a clear legal framework for managing your affairs if you can’t.
Your EPA should form part of your overall estate plan
An EPA shouldn’t be treated as a standalone document. The way your EPA is structured can be an important part of your overall estate planning strategy.
For example, depending on your circumstances, your EPA may need to include special terms or powers relating to your assets, relationships, business interests, or the way you want your affairs managed.
The people you appoint also matter. You need to consider whether they:
are people you trust;
understand your values and preferences;
will act in your best interests;
can make sensible decisions under pressure;
will respect your wishes;
understand their legal obligations; and
will be available when you need them.
There is no one-size-fits-all EPA. The right arrangement depends on you.
The simple step that gives you more control
If you lose capacity without an EPA, you may leave your loved ones with a legal process to work through at an already difficult time.
Putting an EPA in place while you have capacity means you get to choose who you trust to make decisions for you.
That choice is yours to make now.
Protecting you through life and after death
Our Will Value Packages are designed as a complete estate planning solution, covering both death and incapacity.
Our packages include a suite of estate planning documents, including a Will, Enduring Power of Attorney, Advance Health Directive, and Letter of Wishes.
Your estate plan should reflect your family, your assets, your relationships, your values, and your wishes.
If you’re ready to put an estate plan in place, book our heart-to-heart initial consult and let’s talk about what your plan could look like.