Two pieces of paper guaranteed to save you time, money & stress
Are you one of the approximately 60% of Australians who have a valid Will in place? Well done! Most people are aware that they need to have a valid Will – but there are two other legal documents that are critically important: an Enduring Power of Attorney and an Advance Care Directive.
Unlike a Will, which only comes into effect after you pass away, the Enduring Power of Attorney and Advance Care Directive are designed to safeguard your health and financial wishes while you are alive. While all of us hope to enjoy good health well into old age, ill health catches up with most of us. Having these two documents in place will help ensure that your health care and financial affairs are managed in the way that you would like them to be managed, in circumstances where you are unable to make, or communicate, your own decisions.
The inability to make your own decisions, or the inability to communicate your decisions, can be the result of a stroke, accident or other illness, such as Alzheimers. In legal terms this is referred to as the Loss of mental capacity, and is defined in South Australian Legislation (the Guardianship and Administration Act 1993) as ‘the inability of a person to look after his or her own health, safety or welfare or to manage his or her own affairs’.
Many people assume that should they lose mental capacity, their spouse, partner or children will automatically have the right to make decisions on their behalf, however this is not the case.
This is why it is very important that you plan ahead, despite the difficult nature of the topic. Having the right documentation means that your wishes can be followed, and the people of your choice are making critically important decisions on your behalf. It also means that you will avoid putting your family in the position where they are having to worry about legal issues rather than concentrating on you and your health.
Advance Care Directive
What do you want to have happen should you be well into your 80’s and become critically ill? Would you like to receive every intervention possible, even if it would only prolong your life by a few days, or would you prefer to slip quietly away? There is no doubt that these are difficult questions, but they are the type of questions that confront families in emergency departments around Australia every day.
But even if you do know the answers to these questions, does your family know? And in circumstances where you are unable to answer these questions, have you set out who will act on your behalf in an Advance Care Directive?
Having an Advance Care Directive means that you can select and appoint one or more Substitute Decision-Makers to make health and medical decisions on your behalf should you lose mental capacity. The Substitute Decision-Maker is expected to make decisions that respect your wishes (where this can be determined) rather than impose their own views and values. When preparing your Advance Care Directive you can specify the conditions of appointment.
You can also specify the values, wishes and preferences that will need to be considered by the Substitute Decision-Maker when acting on your behalf. This may include instructions for future health care, end-of-life, living arrangements and personal matters. You may also use the Advance Care Directive to document any medical or health care interventions that you would like to refuse.
A valid Advance Care Directive can save your family a whole lot of extra heartache, and it gives you peace of mind that your wishes regarding health and medical treatment will be followed to the extent possible. It is now common practice for hospitals, aged care homes and retirement villages to request or require that patients and residents have a valid Advance Care Directive.
Enduring Power of Attorney
An Enduring Power of Attorney enables you to appoint a person to make decisions about your finances and assets (including any property you may own) on your behalf.
In general terms there are two main types of Power of Attorney, it can be a general Power of Attorney, which takes effect immediately, or it can be an Enduring Power of Attorney which comes into effect in the event that you lose mental capacity.
As with the Advance Care Directive, many people think that should they lose mental capacity (such as through Alzheimer’s Disease) their spouse or children will be able to act on their behalf, however there is no automatic right of a spouse or children to make such decisions for you.
The impact of not having a Power of Attorney can be significant. Should you lose mental capacity, your spouse or children may not be able to:
- Apply for financial assessment with, or submit any forms to, Centrelink or the Department of Veteran’s Affairs.
- Organise assistance from other government agencies for your well being.
- Liaise with other organisations on your behalf. This includes banks and other financial institutions, utility companies and/or other service providers.
Having a Power of Attorney in place means that your financial affairs can be managed by someone you trust, should you be unable to manage them yourself. Importantly, it also means that the assets that you have worked hard for can be used appropriately to ensure that you receive the right care.
But is it safe to let others make decisions for me?
It is important to remember that even if you have a Power of Attorney in place it does not necessarily mean that it is in effect. These documents often only come into effect once a person loses mental capacity. In these circumstances, written confirmation from a medical practitioner of the person’s loss of mental capacity is required for an Enduring Power of Attorney or Advance Care Directive to come into effect.
One of the biggest fears people have is that they will be forced into an aged care home against their will. If you have an Enduring Power of Attorney in place (that only comes into effect should you lose mental capacity) and you still have mental capacity, you cannot be admitted against your will. Family members may say that you should move into residential aged care, usually out of concern for the risks associated with you continuing to live at home, but as long as you have mental capacity it is up to you as to how long you would like to stay at home (and there are a lot of services out there that let you do this).
What happens if I lose mental capacity and don’t have an Advance Care Directive or Enduring Power of Attorney?
This is the worst of all outcomes, and it is one that we at Senexus have seen more often than we would like.
In order to make an Advance Care Directive or Enduring Power of Attorney you must have mental capacity, as you need to be able to understand the nature and effect of the documents. Once you have lost your mental capacity you can no longer make either of the documents.
The problems associated with not having an Advanced Care Directive or Enduring Power of Attorney usually emerge after a family member has a major health incident (such as a severe stroke) and is hospitalised. Without an Advance Care Directive in place the family has no authority to make health and medical decisions on their behalf.
The immediate crisis passed, it is clear that the person will need ongoing care in a residential aged care facility. But without an Enduring Power of Attorney in place the family are stuck in a legal vacuum: their loved one is unable to apply for residential aged care due to the severity of their condition, yet the family has no authority to apply on their behalf.
Should your family find themselves in this position, the only way for them to proceed is to apply to the relevant legal tribunal in their jurisdiction. In South Australia, this is the South Australian Civil and Administrative Tribunal (SACAT). This is a formal legal authority (like a Court). Family members can apply to SACAT for an Administrative Order which will provide them with same powers as those provided under an Enduring Power of Attorney. They can also apply for a Guardianship Order which would provide them with the same powers as those provided by an Advance Care Directive.
Families who apply to SACAT for an Administrative Order or Guardianship Order will need to provide formal documentation and evidence, as well as provide testimony. This puts additional strain on families who are already dealing with a difficult situation. It is also important to understand that:
- SACAT may not necessarily grant the relevant power to the person you would have chosen.
- The process can take a lot of time, leaving you and your family in limbo for weeks or even months. A quick application process may still take two weeks, and it is more likely that it will be months before all of the relevant documentation is prepared and a decision can be made. During this time a range of decisions that could have been made to best manage your health or finances may have had to be deferred.
- The process can be expensive. It is advisable that your family engage a lawyer to conduct the application process, usually resulting in a legal bill of not less than $3,000 (that very same lawyer would have been able to prepare an Advance Care Directive and Enduring Power of Attorney for you for around $150 each).
Other than being necessary documents in the aged care placement process, the Advance Care Directive and Enduring Power of Attorney are two of the most critically important legal documents that you can have. While they are important documents for anyone over the age of 18, for those of us whose age is a little more advanced, or who are perhaps at a higher risk of losing mental capacity, then an Advance Care Directive and Enduring Power of Attorney are two items that you should not be without.
