The Power of One
The difference between a power of attorney and an enduring power of attorney, plus a new era of health directives and enduring powers of guardianship.
In Western Australia there will soon be a suite of "lifestyle planning" documents available, not just power of attorney and enduring power of attorney documents, which enable a person either to appoint a nominated person to act on his or her behalf or to make decisions now for his or her future healthcare.
Amendments to the Guardianship and Administration Act look set to revolutionise the way in which we make our healthcare decisions and provide certainty for people when they might be at their most vulnerable - either by allowing the person to appoint a third party to make decisions for him or her, or by allowing a person the opportunity to make his or her own "advance health directive" in relation to medical treatment.
The proposed documents are somewhat different from a power of attorney and an enduring power of attorney, as both forms of powers of attorney allow an individual to appoint a third party to act on his or her behalf in relation to personal financial or business decisions. These documents are particularly useful in circumstances where a person may be unable to attend a meeting, sign a document for health reasons or because the person is overseas. These documents can grant the attorney as broad or as limited powers as the individual (known as the 'donor') wishes. Generally, we recommend that these documents be drafted as widely as possible, as you never know when they may be required. Given that the documents can be so powerful, whom a person selects to be his or her attorney will be critical.
With a power of attorney, the attorney is an agent of the donor and has the exact same powers as the donor. Where the donor lacks legal capacity (for instance, the inability of the donor to enter into contracts because the donor has become mentally incapable or is in a coma), then the power of attorney becomes ineffective and the attorney can no longer act on behalf of the donor. An enduring power of attorney goes one step further. It will continue to operate, or "endure", after the donor subsequently becomes legally incapable. The scope of an enduring power of attorney is limited to financial decisions. That is, it should not be used to make lifestyle decisions for the donor. Unless the powers of the attorney have been limited by the donor, an attorney has the power to deal with all of the donor's personal financial affairs from the time of commencement. An enduring power of attorney and a power of attorney can only be made by a person who has legal capacity.
The powers granted by an enduring power of attorney and a power of attorney should never be underestimated as they can, unless otherwise specified, allow an attorney to deal with or sell the donor's property and, with the donor's consent, assume complete authority over the donor's financial affairs. If a person does become legally incapable, the enduring power of attorney will be irrevocable unless the State Administrative Tribunal revokes the power. Enduring powers of attorney are particularly useful tools for people who are carers or family members of an individual who has lost his or her legal capacity. In light of the increasing number of people suffering from degenerative mental illnesses, such as dementia, it is impossible to overstate the importance of an enduring power of attorney.
In addition, amendments to the Guardianship and Administration Act seek to go further than the enduring power of attorney by introducing the concept of enduring powers of guardianship and advance health directives. Currently, these amendments, which have passed both Houses of the Western Australian Parliament, are anticipated to come into effect during early 2010. The legislation has been drafted to allow people the opportunity to achieve some certainty when addressing "lifestyle" issues. These include allowing terminally ill persons to govern their medical treatment, in addition to protecting medical professionals who carry out that person's wishes or instructions in certain circumstances.
Unlike an enduring power of attorney which focuses upon financial decisions, the proposed enduring power of guardianship will allow an individual to appoint someone else to make "lifestyle" decisions on his or her behalf. The enduring power of guardianship is anticipated to operate so that the donor, before suffering a disability which can affect his or her ability to make decisions, appoints an enduring guardian who would make "personal, lifestyle and treatment decisions" on his or her behalf, if in the future that person were to become incapable of making such decisions.
Unlike an enduring power of guardianship in which the donor appoints someone else to make decisions, an advance health directive (colloquially known as a "living Will") will enable a person to make decisions about his or her own future health care. In the advance health directive, a person will be able to specify the situations in which he or she wishes either to provide consent to future treatments, or to refuse to consent to such future treatments.
The effect of the new documents is to eliminate the uncertainty surrounding the extent of an attorney's powers under an enduring power of attorney. These new documents appear to clarify once and for all the limited nature of an enduring power of attorney insofar as, to the extent that the donor wishes to permit an attorney to make "lifestyle" decisions, then an enduring power of guardianship, not the enduring power of attorney, will be the document to sign.
For further information or advice on this topic, please contact Sarah Walton, Lawyer, by email at swalton@talbotolivier.com.au or Rob Durey, Principal, by email at rdurey@talbotolivier.com.au.
