In addition to making a Will, if you are at all concerned about not being able to deal with your financial or personal affairs on your own, now or in the future, you should have both a Power of Attorney and a Representation Agreement. Patricia has prepared the following outline which should give some food for thought (and action!):
Power of Attorney
A Power of Attorney is a document in which you appoint another person, called an ‘attorney’, to deal with your business and property and to make financial and legal decisions for you. This person is usually a family member: most often a child or sibling. A Power of Attorney can be specific, restricted to a specific task, or general, giving your attorney wide powers to deal with your assets. You should consider what kind of powers you wish to give to your attorney. This is a serious position of trust so your choice of attorney is critical. You can appoint more than one person as your attorney and allow them to act separately or require them to act together in making all decisions relating to your affairs.
The Power of Attorney automatically ends when you die or if you become bankrupt or mentally incapacitated. In order for a Power of Attorney to survive your mental incapacity you will have to make sure that your Power of Attorney is an enduring power.
Enduring Power of Attorney
An Enduring Power of Attorney will continue to be effective even after you become mentally incapable if you specifically state that the power should continue. The Enduring Power of Attorney allows your attorney to make the necessary financial and legal decisions for you should age, accident or illness affect your mental abilities. Without an Enduring Power of Attorney, your family may have to apply to court for an order appointing someone as a ‘committee’ to look after your personal, legal and/or financial affairs when you are not competent to do so yourself.
The law provide that a person who agrees to act as your attorney under an Enduring Power of Attorney agrees to:
- act honestly and in good faith;
- act in your best interests, taking into account your current wishes, known beliefs, values and directions as set out in the document;
- not dispose of any property the attorney knows is specifically gifted in your Will;
- keep your assets separate from the attorney’s assets; and
- keep a proper record of your assets and liabilities.
However, neither the Power of Attorney nor the Enduring Power of Attorney give your attorney the authority to make medical or health care decisions for you. For this reason, you should also have a Representation Agreement.
Why You Need a Representation Agreement
By making a Representation Agreement, you are appointing a representative and giving that person legal power to handle your financial, legal, personal care and health care decisions should you become incapacitated and unable to make them on your own. Unless your representative is your spouse, the Representation Agreement must name another person as a ‘monitor’ to help ensure the representative lives up to their duties.
There are two types of Representation Agreements. One is limited to straightforward everyday decisions, while the other is general and covers complex legal, personal and health care matters including decisions such as refusing life support if you become terminally ill. Many people choose to make Representation Agreements to ensure that, for example, extraordinary or mechanical measures, or additional surgical procedures, are not employed to try to keep them alive when, for example, their condition is terminal or their quality of life would be negligible if they were simply being kept alive by machines.
It is not much fun to think about these future possibilities in our lives but we owe it to our loved ones to simplify what they may have to deal with, should the unthinkable happen. Don’t leave it too late.
If you would like to discuss making a Power of Attorney or Representation Agreement, please call us for a consultation.
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