Law Talks Episode: Enduring Power of Attorney vs Advance Health Directive – What’s the difference, and do you need both?

Robyn: Good morning and welcome to another edition of 4CRB’s Law Talks and today joining us from Attwood Marshall Lawyers, Wills and Estate Associate, Natalie Comerford. Natalie practises exclusively in estate planning and helping people understand what documents and strategies they can use to help plan for future and preserve their wishes. Thanks for being here, Natalie.

Natalie: Thanks for having me, Robyn, it’s great to be here.

Robyn: Well, today we’re going to be clearing up some of the confusion that seems to surround advance health directives and how these documents differ from an enduring power of attorney. Many people get confused about which document may serve them best, or if they need both documents. Natalie, as we know these documents allow us to leave important instructions about our personal and health preferences as we age and give the power to someone we trust to make those decisions on behalf if you lose capacity to make decisions for yourself. What can you tell us about these estate planning documents?

Natalie: Okay, so here in Queensland there are legal provisions in place to ensure that individuals can plan for their medical and personal and health in the event they become incapacitated or cannot communicate the wishes themselves. So likewise for financial matters, the same is required to ensure that in the event you cannot manage your own financial affairs yourself, you’ve got the security of being able to pre plan, have legal documentation in place to ensure that your money can be used to keep life going.

Unfortunately, bills don’t stop when we do. So, the two significant legal documents that facilitate these plans are the advance health directive and the enduring power of attorney. While both of these documents can be used to guide decision making, when an individual can no longer make decisions for themselves, they differ in terms of their scope, purpose, and the types of decisions they allow others to make on behalf of the individual.

So, the issue that we commonly see is that people do not fully understand the functions of each document and how they’re used. This inevitably leads to the documents not being legally valid, so although they both have a role to play in planning for the future, they need to be dealt with properly to ensure that they’re going to be able to do the job they were designed to do.

Robyn: Yeah, okay. So, let’s break it down. What is the main difference between an advanced health directive and an enduring power of attorney.

Natalie: So, the primary purpose of the advance health directive is to protect an individual’s autonomy by ensuring that their medical treatment and preferences are known and respected.

The best way to understand this document is to imagine you’re taken into the emergency department of a hospital. When you attend, the triage nurses conduct of a bit of a fact-finding mission. So, they’ve got some type of medical history to work with.

They need to know if there’s any medication that you’ve currently taken or that you’re currently taking any health diagnosis that you may have, any medication or allergies that are known to cause reactions in the past or about family history generally.

So ideally what you’re doing in an advance health directive is providing all of this information in a written form and by having this information, the medical practitioners can do their job more effectively.

So, the advance health directive communicates other important information as well, such as people that are authorised to make decisions for you. It informs of any personal opinions related to your care, such as religious beliefs or instructions of what you do, or you don’t want to happen to your body. So basically, it’s your voice in the event you cannot communicate your wishes yourself, and it’s particularly important for the elderly of our community to have in place.

The advance health directive requires consultation with your medical practitioner to ensure complete understanding. Medical matters are complex. For example, if you’re signing a legal document saying you do not wish to be resuscitated, you need to fully understand what that means.

It needs to be put in place while an individual still has capacity to make their own decisions, and it’s a document that only commences upon loss of mental capacity.

So as lawyers are concerned with this planning tool centres around the valid execution and also to ensure that the advance health directive does not jeopardise the validity of other estate planning documents, such as wills or enduring powers of attorney.

Robyn: So, what is different about the enduring power of attorney.

Natalie: Well, an enduring power of attorney, on the other hand, has a dual purpose. Firstly, and in my opinion, most importantly, the enduring power of attorney allows a person to appoint a person or people who we refer to as the attorney to make financial decisions on their behalf. So, this is a very serious power to give another person or people. And needs to be given great consideration. And this power is also exclusive to the enduring power of attorney. By that I mean an advance health directive cannot grant financial power. It’s merely a medical communication tool.

So, when it becomes a bit confusing is in relation to the second component of the enduring power of attorney, which covers personal, including health matters. Now it’s important to highlight if you choose to put an enduring power of attorney in place, you can choose to have it cover financial matters or personal and health, or you can opt for both. So, people can become confused because it can seem like a bit of a double up with the advance health directive.

In reality it’s not, it’s just about fully understanding each document, their purpose, and how they’re used.

Great care must be taken at the end of the day because they are both legal documents that come with a significant amount of power. Not only that, but a single mistake or misunderstanding can result in either being invalid or cancelling each other out because of inconsistencies.

So, like in advance health directive an enduring power of attorney can only be created while an individual still has mental capacity and must be signed and witnessed legally to be valid.

So, the enduring power of attorney can commence at any time chosen by the individual, and it doesn’t end with the loss of capacity. So, it’s important to note as well that the legal tests for capacity for the enduring power of attorney is actually much higher than a will. So, it’s essential that this document is not left to the last minute because you can lose the opportunity to put it in place.

Robyn: So, Natalie, do people really need to consider both documents or will one serve the purpose?

Natalie: Given that both documents do vary in their scope and the type of power and guidance you’re giving your decision makers, it’s definitely worth considering both and like all at legal advice, it’s very individual to a person’s particular circumstances.

As a bare minimum, absolutely everyone over the age of 18 should have an up-to-date enduring power of attorney. Whether you’re appointing your parents or a spouse or children, it’s vital that a trusted person can keep your financial affairs moving in the event you can’t.

So, the enduring power of attorney can also effectively cover you for personal and health matters. So, when it comes to the necessity of an advance health directive, it all depends on what stage of life you’re at. Or even the medical conditions that you’re facing.

For our elderly cohort, I would say it’s essential, but for younger clients, it’s not something I would see as being at the top of their priority list. So likewise, if a person doesn’t have specific medical wishes, the enduring power of attorney will suffice. But if you have very detailed beliefs and views or even religious views on medical interventions, you’d want to have the advanced health directive in place.

Oh, and just to add, these days we’re seeing a rise in residential care facilities requiring the advance health directive to be in place on admission.

So, while both documents may have some overlapping questions, they do serve distinctive purposes. Together they can provide a comprehensive legal protection for an individual’s autonomy and decision-making power.

They’ll ensure that you leave clear medical treatment instructions to your caregivers while someone you trust implicitly, the power to make the right decisions for you.

Robyn: And what’s the alternative if someone has neither of these documents and something suddenly changes in their health, and they lose capacity? Who then can make sure their wishes are honoured?

Natalie: Okay. So, without these documents, unfortunately, your family can’t simply step in and make these decisions for you, even if they know what you would have wanted. This can come as a big surprise to many who think that next of kin or family can automatically step in into that power position.

They can’t. So, if we’re talking medical decisions, there are specific categories of people that the legislation in each state allows to deal on behalf of a loved one. This is strictly not the case for financial matters. In some cases, the public trustee can be awarded the authority to make financial decisions for an individual, and the adult guardian can be appointed for health and personal decisions, if you have not prepared and put the document in place yourself.

If a family member wants to become the decision maker for a loved one, then an application must be lodged with the Queensland Civil Administrative Tribunal, which in Queensland we call it QCAT for short, and there’s an equivalent body in New South Wales.

Robyn: Yeah. I think Natalie, you just touched on probably what’s one of the biggest misconceptions is that I think families and loved ones just think they can automatically assume that role if something goes wrong. And what is one final takeaway you would like to leave our listeners with today?

Natalie: Alright, if nothing else, I hope this conversation gets people thinking about what it is they want for the future and who they trust in their life to make important decisions on their behalf if something unexpected happens.

Estate planning is simply more than just writing a will. As important as a will is, there are other documents like the enduring power of attorney and the Advanced Health Directive that can’t be ignored.

I think everyone should take the opportunity to sit down with an estate planning lawyer when drafting their will and find out about these additional documents and how they can give you and your family peace of mind.

A quick conversation can go a long way and ensure your best interests will always be protected today and in the future. So always get advice around these documents and find out what is the best way to plan for your future.

Robyn: Yeah, they’re so very important documents and the conversation should be had great advice as usual, Natalie, thanks for joining us today.

Natalie: Thanks for having me.

Robyn: You’ve been listening to law talks here on 4CRB, which you can hear every Friday morning from 9 o’clock.