Powers of attorney: who will make decisions for you if you lose capacity?

Key takeaways

• If you lost capacity, your next of kin is not necessarily the person who will have the power to make decisions for you or manage your finances.
• Having powers of attorney in place means you get to choose who will make decisions for you if you lose capacity in the future.
• It is important to make sure that the decisions someone can make on your behalf are consistent with your wider estate planning objectives.

As doctors, you spend your professional life making decisions that impact on the health of others. Just like the plumber who has leaking taps in their own home, it is often the case that we neglect to apply our professional skills to our own situation.

If you were to lose capacity to make decisions for yourself, have you appointed someone to make decisions on your behalf?

Types of decision making

Although the laws differ slightly among the States and Territories, decision making on behalf of another person has typically been categorised into three areas:

• financial;
• personal;
• medical;

Financial matters include not only paying your bills but can extend to decisions about how to invest, the power to buy and sell your assets and also sign legal documents on your behalf.

Personal matters include decisions about your living arrangements, what services you receive and where and with whom you live. Commonly, the biggest decision to be made is selecting the appropriate accommodation for you if you have lost capacity to take care of yourself or arranging for a carer to assist you at home.

Medical decisions can include physical or surgical treatments, dental care, treatment for mental illness and treatment with pharmaceuticals. The decision can also extend to refusing such treatments on your behalf.

Decision makers

‍‍In each State and Territory there are laws in place that govern who can be appointed as your substituted decision maker (commonly referred to as powers of attorney).

“Enduring” powers of attorney are those that will either commence or continue to remain in force if you lose capacity to make your own decisions.

If you don’t appoint a substituted decision maker and do not have capacity to make your own decision at the relevant time, you should not assume that your next of kin will be allowed to make decisions for you or manage your finances. It could well be that the relevant government tribunal in your jurisdiction can appoint someone to act on your behalf. This could be a relative or could be a private professional trustee or the Public Trustee in your State or Territory and not necessarily be the person you would have chosen.
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If you want certainty that the person or people you choose will have the authority to act for you, you will need to appoint them in accordance with the law in your State or Territory.

Choose who will make decisions for you

It almost (but not quite) goes without saying, that you should only appoint people you trust implicitly.
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In deciding who to appoint, you need to consider:                                                             

• who would be available to take on the role for you;
• whether you are happy with one person making decisions for you and/or dealing with your finances and property on their own or whether you want two or more people acting together;
• if it is appropriate to appoint relatives or friends as your attorneys or if you need to consider appointing a professional person;
• whether you need to put any conditions in place or limit the authority of your attorneys in any way.

While you can appoint different decision makers for different purposes, financial decisions often impact on lifestyle issues and vice versa, so it may be appropriate to appoint the same people in these roles.
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The answer to each of the above considerations will depend on your specific circumstances and your wider estate planning objectives. There is no “one size fits all”. 

We can help you

If you have any questions, or would like more information about how we can assist you or your practice, please call 1800 867 113, or to organise a confidential discussion at a time that suits you, please click here