Many people assume that if they become unable to make decisions for themselves, their spouse or adult children will automatically be authorised to step in and manage their affairs.
In Queensland, this is not necessarily the case.
Without a valid Enduring Power of Attorney, your family may be unable to access your bank accounts, manage property held solely in your name or make other important financial decisions on your behalf. An application may then need to be made to the Queensland Civil and Administrative Tribunal, commonly known as QCAT, for someone to be formally appointed.
This may result in someone you don’t know may end up making decisions for you.
Putting an Enduring Power of Attorney in place while you have capacity allows you to decide who will act for you, what decisions they may make and when their authority will commence.
Does your spouse or child automatically have authority?
A spouse or adult child does not automatically obtain unrestricted authority to manage your financial affairs if you lose capacity.
For example, your spouse may be able to continue managing a genuinely joint bank account. However, they may not be able to access an account held solely in your name, sell or mortgage property registered only in your name, manage your investments or deal with other organisations on your behalf.
This can create significant difficulties where money is urgently required to pay medical expenses, aged-care fees, household expenses or other liabilities.
What financial problems can arise?
If you lose capacity without appointing an attorney for financial matters, no one may have the authority required to manage assets held solely in your name.
Your family may encounter difficulties undertaking tasks such as:
- accessing your bank accounts and paying your bills;
- managing your investments or rental property;
- dealing with Centrelink, insurers or financial institutions;
- entering into or terminating contracts;
- selling your home to fund aged care;
- paying accommodation deposits or ongoing care expenses; and
- managing taxation, superannuation or other financial matters.
Financial institutions and government agencies are required to protect their customers’ assets and personal information. A family relationship alone will not generally be sufficient to authorise another person to act.
Without an Enduring Power of Attorney, bank accounts may become inaccessible, delays may arise and family conflict may develop over who should make decisions.
Can an Enduring Power of Attorney avoid these problems?
A properly prepared Enduring Power of Attorney allows you to appoint one or more trusted people to make financial and personal decisions on your behalf.
You can determine the types of decisions your attorneys may make, when their authority for financial matters begins and whether multiple attorneys must act jointly, separately or by majority. You may also include appropriate directions, limitations and safeguards.
An Enduring Power of Attorney can provide certainty for you and your family, reduce the risk of disputes and lessen the likelihood that a QCAT application will be required.
However, the document must be prepared and signed while you have the capacity to understand its nature and effect. Waiting until a diagnosis of dementia, a serious illness or an urgent move into aged care can make the process considerably more complicated.
When should you make or review an Enduring Power of Attorney?
An Enduring Power of Attorney is not only for older people. An accident or unexpected illness can affect decision-making capacity at any stage of life.
It is particularly important to make or review your Enduring Power of Attorney if you:
- have recently married, separated or divorced;
- have been diagnosed with a condition that may affect capacity;
- own real estate, investments or a business;
- have a blended family or complex family relationships;
- are preparing to move into aged care;
- have an attorney who has died, lost capacity or is no longer suitable; or
- prepared your existing document a number of years ago.
Plan now while the decision remains yours
Losing capacity without an Enduring Power of Attorney can leave your family trying to manage urgent financial and personal issues without clear legal authority. It may also mean that QCAT, rather than you, ultimately determines who is authorised to make important decisions on your behalf.
Preparing an Enduring Power of Attorney while you have capacity gives you control over that decision and provides your family with clarity when it matters most.
Our experienced team can assist you to prepare or review an Enduring Power of Attorney tailored to your circumstances. We can also advise family members where a loved one has already lost capacity and an application to QCAT may be required.
Contact our office to arrange an appointment.