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What Happens if I Lose Capacity?

In NSW, an important part of your estate plan should be to address the possibility you may lose the ability and capacity to make decisions about your own best interests. The loss of capacity can sometimes be gradual, particularly when caused by advancing age or chronic illness, but it can also be sudden. Traumatic accidents and acute changes in your health, such as an unexpected stroke, can often lead to unforeseen legal consequences and complexities.

Unless a Court or Tribunal orders otherwise, every adult in NSW is presumed to have the ability and capacity to decide what is in their own best interests. Under NSW law, people are also able to nominate who they want to make decisions on their behalf if they lose capacity.


Appointing an Enduring Power of Attorney

A Power of Attorney is a legal document that allows you to appoint one or more trusted persons to make financial and legal decisions on your behalf. The person/s you nominate is/are called your ‘attorney’, or in some cases, an 'alternate attorney'.

There are two types of Power of Attorney that can be appointed:

  • General – your attorney/s are authorised to make decisions based on conditions and limitations you may choose, but in circumstances where you may still have capacity.

  • Enduring – your attorney/s are authorised to make decisions based on conditions and limitations you may choose, but in circumstances where you no longer have capacity.

Your attorney/s can do essentially anything you were legally authorised to do in your own right, including:

  • Accessing bank accounts and paying your bills for you;

  • Transferring, selling and otherwise dealing with your real and personal property;

  • Signing contracts and agreements in your name; and

  • Dealing with companies, organisations and government departments like Centrelink and Medicare on your behalf.

You can also specify conditions and limitations in regards to how and when your attorney can act, but it is important to consider your requirements carefully. You do not know what the future may hold, and you may not want to constrain your attorney/s if it could impact on their ability to act in your best interests at a later date.

Executing a Power of Attorney document allows the people you trust to assist you when you need help. Making nominations also ensures that people that you may not want to be involved in your affairs are less able to interfere. If you do not have a valid Power of Attorney appointed, there may be a higher chance of disputes or applications to the NSW Civil and Administrative Tribunal Guardianship Division being made concerning your interests.


Appointing an Enduring Guardian

An Enduring Guardian is similar to an Enduring Power of Attorney, but they are appointed to make health and lifestyle decisions for you if you have lost the capacity to make those decisions for yourself. These decisions may include consenting to medical or dental treatment and deciding where you live.

You can appoint more than one person to be your Enduring Guardian. It is important to note, however, that the people you nominate can only act as your Enduring Guardian/s once you lose the ability to make decisions for yourself.

If you appoint more than one Enduring Guardian, you must decide if they are to act either:

  • Jointly – all appointed guardians must sign all documents and make the same decisions on your behalf; or

  • Jointly and severally – each appointed guardian can act separately from the other guardians you have appointed.

You will need to see a solicitor to assist you in preparing and executing an Enduring Guardian as they are solemn and important documents. The solicitor will need to certify that you understood the document and that you made the nominations of your own free will.

Seeing an experienced and qualified solicitor for your estate planning documents is quicker and easier than you may think. Ensure you get the right advice and avoid any problems by contacting Turner Freeman Lawyers.

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