Less Popular but Equally Important: Personal Directive and Enduring Power of Attorney

End-of-life planning remains a taboo topic of discussion among families. While I agree that it does not make for the best Thanksgiving dinner conversation, for most families, the right time to discuss such matters never comes.

Thankfully, having a Will has become more mainstream, and most people can agree on the importance of having one prepared before their passing. However, one should consider what happens to their affairs while they are still alive but incapacitated.

The solution lies with two documents: the Personal Directive and the Enduring Power of Attorney. Perhaps less popular than a Will but equally important, these two documents contain one’s wishes concerning any medical or financial decisions to be taken on their behalf by an appointed Agent or Attorney after they lose mental capacity.

Personal Directive

The Personal Directive is a legal document by which an individual (the “Donor”) can empower someone else (the “Agent”), to make personal and health care decisions on their behalf. The Donor may choose one or more Agents and may choose each Agent’s area of authority.

There are four defining features of a Personal Directive, namely:

1. The Donor must be over 18 years of age and of sound mind when they make the Personal Directive;
2. It only comes into effect once the Donor loses the mental capacity to make such decisions themselves. Lack of capacity is determined by:
   1. a capacity assessment by a healthcare professional; or
   2. by following the lack of capacity requirements contained in the Personal Directive document.
3. It only applies while the Donor is still alive; and
4. The Donor may revoke it if they regain capacity. A new capacity assessment would be required to confirm that the Donor can make their own decisions.

The Personal Directive can cover an array of personal and health care wishes of the Donor, such as:

1. Preferred medical treatment;
2. Preferred accommodation – e.g., long-term care or home care (if possible);
3. Preferred living arrangements;
4. Preferred associations;
5. End-of-life matters – e.g., use of pain medication, life support, wishes on organ donation, or medical assistance in dying; and
6. Other personal or legal decisions that do not relate to the Donor’s estate.

Enduring Power of Attorney

The Enduring Power of Attorney (“EPA”) is like the Personal Directive in that the Donor can empower an individual (the “Attorney”) to make legal and financial decisions on their behalf.

There are four key features of an EPA:

1. As with the Personal Directive, the Donor must be over 18 years of age and of sound mind when they make the EPA;
2. There are two main types:
   1. Springing EPA – comes into effect when the Donor loses capacity. Lack of capacity is determined either by:
      1. having two medical practitioners attest to the Donor’s incapacity; or
      2. through the capacity test contemplated in the EPA.
   2. Immediate EPA – comes into effect at the moment of signing and continues beyond the Donor’s incapacity;
3. It only applies while the Donor is still alive; and
4. The Donor may revoke it if they regain capacity.

The EPA deals with the Donor’s legal and financial affairs and can cover various matters, such as:

1. Managing the Donor’s property, bank accounts, or investments;
2. Signing legal documents on the Donor’s behalf;
3. Paying bills and dealing with their property;
4. Dealing with the Donor’s business;
5. Liquidating their assets to allow them to live in their home with assistance; or
6. Continuing to purchase gifts for family members on their behalf.

The Powers of Attorney Act[1] contains further guidance in terms of the requirements of an EPA, the responsibilities of an Attorney, and the termination of an EPA.

As you can imagine, being an Agent or an Attorney is a big responsibility, so it is important to have a conversation with those individuals before formally appointing them. That allows them to decide whether they wish to take on this task and familiarize themselves with your end-of-life wishes. It is equally important to appoint individuals you trust to manage your affairs, such as a spouse, a family member, or a close friend. It should be someone whose judgment you trust and who is familiar with your end-of-life wishes.

Preparation is the best approach when it comes to end-of-life planning. Having a Personal Directive and an EPA in place benefits both the Donor, who will have the peace of mind that their wishes are known, and their family members, saving them from having to make such complex decisions without guidance.

Any of the members of our McLennan Ross Wills & Estates team would be happy to discuss your estate planning needs with you.