What Happens When There is No Enduring Power of Attorney in Place?

Power of Attorney
Appointing someone you trust with power of attorney is likely one of those things many of us dismiss as unimportant, or more likely put off as something we can always do another day.

But the consequences of not making someone you trust as your power of attorney can have costly and complicated consequences for your family should you become incapacitated and unable to express your wishes or make decisions for yourself.

What is involved in appointing a power of attorney?

Power of attorney generally falls into two categories –

  1. a general power of attorney and
  2. an enduring power of attorney.

A general Power of Attorney is usually used for short-term purposes – someone you trust is given the power to make financial and legal decisions for you if you’re away overseas, or temporarily incapacitated by illness. The power lapses immediately should you die or choose to revoke it.

An enduring power of attorney, by contrast, continues if you become unable to make your own decisions, for example as the result of a stroke or the onset of Alzheimer’s disease. By nominating someone as your enduring power of attorney while you’re still healthy and coherent, you can protect your interests and direct your affairs for a time when you may no longer be able to.

In Queensland, someone with an enduring power of attorney can make – should you empower them to – decisions on your behalf both on

  1. financial matters and
  2. personal/health matters.

This could include everything from buying or selling real estate, selling shares or other assets, operating your bank accounts, deciding where you live, how you’re fed, and what types of health care you receive.

An enduring power of attorney must be someone over 18 and someone you trust, such as a close family member, long-time friend or trusted adviser. There are certain other restrictions as well, such as the person not being bankrupt or your health care provider.

The consequences of no enduring power of attorney

As is clear from the above, these are very important life decisions to be made by someone else should you no longer have the capacity to make them for yourself.

There are, therefore, some problematic consequences should you become incapacitated with no legally appointed enduring power of attorney. Most commonly, it will fall to the government to handle your affairs because you no longer can… and they will charge a fee.

Queensland Civil & Administrative Tribunal

In the absence of an enduring power of attorney, ideally a family member will step forward to try and help order your affairs. But they will need to apply to the Queensland Civil and Administration Tribunal (QCAT) to be appointed as your:

  1. administrator (to make financial decisions) and/or
  2. your guardian (to make personal decisions).

This process can be protracted and frustrating and made even more complicated if there is disagreement and dispute among your family members about who should rightfully take these roles. It can take three months or more for QCAT to make these decisions and related fees can run into the thousands of dollars.

The Public Trustee

If there is no-one to take on the role of your administrator and/or guardian, the Public Trustee will step in as Administrator to manage your affairs or the Office of the Public Guardian (OPG) will step in to make personal decisions for you. The Public Trustee may charge between $5,000 to $15,000 per year for this service.

For family members or close friends who wish to nominate as either your administrator or guardian, there are a number of conditions to be met which are not dissimilar to those for an enduring power of attorney. More importantly, there are extensive forms and a detailed affidavit required by QCAT in order to make a determination on your administrator or guardian.

These can be complex and time-consuming matters and so consulting a legal professional with wide experience in estate planning is highly advisable. If you have questions about appointing an enduring power of attorney, the consequences if you do not, or about the process for becoming an incapacitated relative’s administrator or guardian, contact us now.