Advanced Care Directives (ACD) and Powers of Attorney (POA) are important documents used in estate planning. Most people will complete both together to ensure that all their affairs are in order in case anything were to happen. Our article below explains the key differences between both documents and their practical uses.
Understanding Advanced Care Directive
An Advanced Care Directive (ACD) is a legal document that allows individuals to provide wishes, preferences and instructions regarding their future health care, end of life care, living arrangements and personal matters.
An ACD will allow you to formalise any wishes you may have. It is impossible to know what might happen in the future concerning your health and you may have very specific ideas about what you want your future health care to look like. In an emergency your loved ones may not be able to decide what is the best treatment for you. An ACD will help everyone know what you want if you are unable to tell them.
Your ACD will only be used if you are unable to make your own decisions, whether temporarily or permanently.
It is important to note that an ACD cannot be used to make financial decisions.
Substitute Decision-Makers
An Advanced Care Directive allows you to appoint one or more persons known as substitute decision-makers to make these health-related decisions on your behalf when you are unable to make these decisions for yourself. It is your choice who you appoint as your substitute decision-makers.
The substitute decision-makers must agree to be your substitute decision-makers, and by agreeing they need to understand their role and responsibilities. A substitute decision-maker must try and make decisions they think you would have made for yourself in the same circumstances.
Understanding Power of Attorney
A Power of Attorney (POA) is a legal document that gives a person (usually known as the donee, attorney or appointee) the power to act on behalf of the person (usually known as the donor, principal or appointer) who gives that power.
If you give a person 'a power of attorney' that person (the donee) can act on your behalf relating to financial matters, for example buying and selling things for you or operating your bank account. A person must agree to be your attorney; you cannot force someone against their will.
In your POA, you can write down your wishes and instructions about how your finances are to be managed. You can give as much or as little power to your attorney’s as you wish: they can only do the things that your POA allows them to do.
It’s important to note that careful consideration should be given to who you give a power of attorney to, it should be someone you know is absolutely trustworthy as providing a person who is not absolutely trustworthy can be dangerous. If you wish your attorneys to deal with any property that you own, the Power of Attorney needs to be registered with the Land Titles Office.
A POA cannot be used to make healthcare, accommodation, or personal decisions.
There are two different types of powers of attorney: General and Enduring. They are similar but both have slight differences.
General Power of Attorney
A General Power of Attorney can be created for a certain period of time, if no specific time period is indicated it will cease to operate when you die or lose legal capacity.
Enduring Power of Attorney
An Enduring Power of Attorney (EPA) continues to operate even when you have lost legal capacity. An EPA can come into effect either as soon as it is properly signed and witnessed or when a doctor confirms you are no longer able to make your own financial decisions. You can revoke your EPA at any time, as long as you still have legal capacity.
General and Enduring Powers of Attorney both give a person the power to deal with a person’s financial affairs. Giving these powers to someone does not mean you lose control of your finances.
Key Differences Between Advanced Care Directives and Powers of Attorney
The key difference between an Advance Care Directive and Power of Attorney is that the ACD is used for medical decisions whilst the POA is used for financial decisions.
They are both equally important. The most important thing is to know which one is right for you, which will depend on what you might require at the time.
If you require advice regarding setting up a Power of Attorney or Advanced Care Directive, contact Wadlow Solicitors or call (08) 8212 2955 and schedule an appointment with our wills and estate planning team.
