Who will make decisions for you in the event that you become unable to make decisions for yourself?
While not a subject most people like to think about, it is important for you to consider who you would choose to make financial and medical decisions on your behalf if, due to an accident or illness for example, you become unable to make such decisions for yourself.
By signing a legal document called a Power of Attorney, you can identify a specific individual, or several individuals, to make such financial and/or medical decisions on your behalf. In doing so, you effectively provide that individual, your chosen "attorney," with the legal authority he or she will require to act on your behalf.
The terms of the Power of Attorney will outline the extent of your attorney's powers, in other words what he or she can and cannot do on your behalf, and will specify the event that will invoke his or her authority to act. A Power of Attorney may, for example, be effective only upon a finding of incapacity, or alternatively, for a set period of time or a specific purpose.
Most Powers of Attorney are not invoked immediately, but rather, as a consequence of some future event or illness. As such, after executing Powers of Attorney, you may continue to make decisions yourself, and may change or modify your Powers of Attorney as long as you continue to have the mental capacity to do so.
There are two specific types of Powers of Attorney:
1. Continuing Power of Attorney for Property, which will give the individual, or individuals, you appoint the right to do anything with respect to your property that you could do if capable (except make a Will).
2. A Power of Attorney for Personal Care, which will authorize the individual, or individuals, you appoint to make decisions regarding your health and personal care.
Your attorney does not need to be a lawyer; however, he or she should be someone you trust. Many people nominate their spouse to act as their power of attorney; however, in some instances it might be more appropriate to appoint another individual with specific skills or knowledge relevant to your financial affairs or medical situation. For example, if you perceive your finances to be complicated or time consuming to manage and do not wish to burden a loved one, you may wish to appoint someone who has both the requisite time and business acumen to act as your attorney for Property.
In the event you become incapable without having executed a Power of Attorney for Property and/or Personal Care, there will be no one with legal authority to make decisions with respect to your finances or medical care. As a consequence, a government body called the, Public Guardian and Trustee, (PGT) is, in most situations, appointed by operation of law to act as statutory guardian to make decisions on your behalf.
In the event your spouse, partner, children and/or relatives wish to be appointed as your guardian instead of the PGT, they will be required to bring a court application through which the court can authorize their appointment. This process can be costly and time consuming, especially if your loved ones cannot agree on who is best placed to make such decisions on your behalf.
It is not uncommon for disputes to arise between family members, each of who believe themselves best suited to make decisions relating to a loved one who becomes incapable. Without a thoughtfully considered plan, your diminished capacity could become the source of tension and disagreement among those closest to you. Not only are such disputes counterproductive and costly, but they often have long-term damaging effects on relationships between your family members.
By preparing Powers of Attorney you can create certainty, both for yourself and your loved ones, as well as minimize the likelihood of disputes between family members that may arise in relation to decisions that must be made on your behalf.
If you haven't already done so, take the time to consider who you would trust to make such decisions on your behalf. Having Powers of Attorney drawn up is relatively inexpensive, certainly less expensive than the emotional cost of a dispute between family members or the financial cost of having to bring a guardianship application.
*Ian Hull and Suzana Popovic-Montag are partners at Hull & Hull LLP, an innovative law firm that practices exclusively in estate, trust and capacity litigation. To watch more Hull & Hull TV episodes, please visit our Hull & Hull TV page.
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