If you become seriously ill or incapacitated, an Enduring Power of Attorney (EPOA) gives your chosen person, known as your attorney, the legal right to act on your behalf. This authority can cover decisions about both your property and personal care and welfare.
When should I set up Enduring Power of Attorney?
The best time to set up an EPOA is now, if you do not already have one. Every adult over the age of 18 should have an Enduring Power of Attorney for both their property and their personal care and welfare. It’s important to remember that these powers can only be set up while you still have mental capacity.
While many people assume that EPOAs are only necessary as they age, anyone can lose mental capacity due to an accident or illness. A good time to arrange your EPOAs is when you’re making your will. You can learn more about will creation here.
Types of Enduring Powers of Attorney
There are two types of EPOAs, each serving a different purpose. It’s often beneficial to have both types in place.
Enduring Power of Attorney for personal care and welfare
This type of EPOA allows your attorney to make decisions about your personal care and welfare if you become mentally incapable. Here are some points to consider as you prepare:
- You can only appoint one person at a time as your attorney, but we strongly recommend you name one or two successor attorneys in case your primary attorney is unable to act.
- The EPOA must meet specific legal criteria to be valid and only comes int o effect if you’re certified as mentally incapable of making decisions by a relevant healthcare professional.
- Your attorney may make decisions about your care, such as the medical treatment you do or do not receive, or where you stay.
Enduring Power of Attorney for property
An EPOA for property authorises your attorney to act on your behalf with respect to any property you own. This can include your home, land, bank accounts, businesses, and other assets.
When setting up an EPOA for property, consider the following:
- You may appoint multiple attorneys and specify whether they should act jointly, severally, or jointly and severally.
- Your attorney may be authorised to make decisions regarding gifts or charitable donations and, under certain conditions, benefit from your property.
- You can decide whether your EPOA takes effect immediately or only if you lose mental capacity.
What happens if I don’t have an Enduring Power of Attorney?
If you lose mental capacity without an EPOA in place, your family would need to apply to the Family Court for the appointment of a Property Manager and a Welfare Guardian. Although these court orders can have a similar effect to EPOAs, they require ongoing court supervision and can be costly, involving regular renewals and financial reporting.
Who should be appointed as my attorney?
You may appoint any trusted adult over the age of 20 as your attorney, provided they are not bankrupt and are mentally capable. Because attorneys have significant decision-making power, it’s essential to choose someone responsible and trustworthy.
- You may consider appointing different people for personal care and property management if you feel they have complementary skills.
- Trustee corporations can be appointed for property-related matters but not for personal care and welfare.
We also strongly recommend appointing successor attorneys. If your primary attorney cannot act for you, a successor attorney will step in.
How are attorneys monitored?
Although there are no automatic checks on how attorneys are exercising their powers, your attorney is legally required to act in your best interest at all times. They should not misuse funds, make reckless investments, or exceed their legal authority. They are also legally obligated to involve you as much as is practicable when making decisions.
To ensure accountability, you can require your attorney to provide specified information to people you name, which can help monitor their actions.
The Family Court can also oversee attorneys’ actions if an application is made, or if the attorney requests guidance on fulfilling their duties.
How long does an Enduring Power of Attorney last?
An EPOA remains in effect until any of the following occur:
- You revoke the power while mentally capable by notifying your attorney in writing.
- A court revokes the power if you are no longer mentally capable.
- You pass away.
- Your attorney becomes bankrupt or mentally incapable.
- The Court revokes your attorney’s power for any reason.
If you have been mentally incapable but have recovered capacity, you are entitled to suspend your attorney’s authority by giving written notice to the attorney. This is different from revoking the EPOA as your attorney will be able to act again should the Court determine or a relevant health practitioner certify that you are again mentally incapable.
What is an Advance Directive?
An Advance Directive, also known as a ‘living will,’ is a written statement outlining your healthcare wishes in case of future incapacity.
Although not legally binding, an Advance Directive can help guide your attorney when making decisions on your behalf.
Franklin Law can help you with legal advice when appointing your Enduring Power of Attorney.
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The information contained in this article is necessarily of a generalised nature and is correct as at October 2024. Specific advice should be sought in relation to any particular situation.