It is a necessary fact of life that you cannot always make the best decisions for yourself when you get older, or if you become very sick or get injured.
In cases like these, it will fall to your grown children and/or relatives to take responsibility for your wellbeing.
There are two ways that someone can legally control your decision into your later years: enduring power of attorney and guardianship.
What’s the difference between enduring power of attorney and guardianship?
There is one significant difference between an enduring power of attorney and guardianship that you first need to be aware of. Enduring power of attorney gives someone power over financial and legal affairs, while guardianship gives them control over health and daily care.
Here’s how each of them works:
Enduring power of attorney
As noted above, enduring power of attorney will allow someone to make decisions over your financial and legal affairs. This includes decisions around property as well as other forms of investments.
The NSW government lists the following as typical actions that an enduring power of attorney might undertake:
- Paying your bills
- Signing legal documents
- Selling or purchasing assets
- Managing your money
- Accessing bank accounts
The law allows you to specify what conditions and limitations anyone with your enduring power of attorney must abide by when the agreement is made.
It is strongly advised that any enduring power of attorney be organised well ahead of time while you still have the facilities to make informed decisions. A prescribed witness must also witness the signing of the documentation.
The enduring power of attorney ceases to have any force upon your death and does not allow the holder to make any changes to your will.
Most people nominate a trusted family but in some cases a lawyer or accountant may be the one to have enduring power of attorney. When you make the decision, let your family know what you want and why. You may wish to nominate more than one person.
Guardianship
Because financial and legal decisions are not the only ones that will impact you later in life, there is also guardianship, which covers lifestyle, health and medical decisions.
According to the NSW government, a guardian can make decisions over:
- Where you live
- The health and personal services you receive
- The medical treatment you get
When you grant guardianship, you can offer directions as to your most likely course of action if you were still able to make decisions independently.
Granting someone guardianship can be tricky because as you age there may be a period when you feel capable of making decisions but those around you disagree because they are concerned for your wellbeing. This is why you need to nominate someone you trust.
Why give someone power over your decisions?
It is a sad fact that elderly people aren’t always capable of making the best decisions.
In cases of dementia, this is extremely important, but by a certain age, it can be necessary even without such a diagnosis. It may only be that you no longer wish to have the burden of making decisions, but it may also be that you are no longer capable of weighing up your options.
This is also why it’s so important to appoint an enduring power of attorney and guardianship well ahead of the time when you will need this kind of support.
How to appoint an enduring power of attorney and guardianship
Appointing guardianship is as simple as downloading the relevant forms from your state government website.
Enduring power of attorney is more complicated and should be carried out with the assistance of a lawyer or an appointed government official.
Speak with your family and get professional advice, and be sure to have things formally documented so there are no disputes about your care and financial decisions as you enter later life.
IMPORTANT: Any tips or advice contained in this article are general in nature and you should always seek professional advice from expert advisers about your individual situation before making significant financial decisions.
