Could a loved one act for you in legal and financial matters?
Something we don’t always think about when we are fit and well, is whether someone we trust could act on our behalf legally and financially, if we needed them to. Yet life is unpredictable, and situations can arise where you may become unable to make decisions or manage your own affairs due to illness, injury, or aging.
Not only is it crucial to have the right legal documents in place to ensure your wishes are met, but you should also have conversations with family and friends about the details, so the people closest to you know how to support you in a medical emergency or accident.
It’s also important those you love and care for have these documents in place, so in times where needed, they can have the support they need, when it’s needed the most, like stepping in and help an ageing parent consider the need for at home or aged care, for example.
Legal and Financial Powers of Attorney
There are two main types of powers of attorney in Australia.
General (non-enduring) Power of Attorney
This gives the “attorney” you nominate (your loved one) the authority to make decisions and act on your behalf in financial and legal matters, like accessing money or signing contracts.
It is typically used when you are unable to manage your affairs temporarily, such as during an extended overseas absence or due to a time-limited illness or injury. However, it becomes invalid if you lose mental capacity.
Enduring Power of Attorney
An enduring power of attorney continues to be valid even if you lose mental capacity. It allows your loved one to make decisions on your behalf, including financial, legal, and personal matters.
It is generally used when you want to ensure that someone you trust can manage your affairs if you become physically or mentally incapacitated.
Advanced Care Directives
Advanced care directives allow individuals to maintain control over their healthcare decisions, even if they become incapable of making decisions in the future. It enables them to express their preferences regarding medical treatments, interventions, and end-of-life care, ensuring that their wishes are respected.
Having an advanced care directive in place can help reduce potential strain and conflict among family members regarding treatment decisions.
Each state and territory has specific legislation or common law principles governing powers of attorney and advanced care directives, so it’s important to seek legal and financial advice when putting these important and deeply personal protections in place.
Your FMD adviser can assist with any queries you may have about arranging someone to act for you in the first instance, and introduce you to our legal partners for further support if required.
General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977. Rev Invest Pty Ltd is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977.