Enduring Powers of Attorney – just as important as a will?
A power of attorney is simply a written authorisation for one person (the attorney) to act on behalf of another (the donor). Sometimes if people are going to be, for example, travelling overseas for an extended period of time they might want someone to have the legal power to act in their stead and deal with their property and affairs. An ordinary power of attorney ceases if (amongst other things) the person who granted the power loses mental capacity. But a law called the Protection of Personal and Property Rights 1988 allows people to make enduring powers of attorney.
They’re called enduring because unlike an ordinary power of attorney the enduring one continues even if the donor ceases to have mental capacity. So if you have an accident or suffer from an illness that renders you mentally incapable, you can make sure you’ve appointed a person (or persons) to look after your bank account, pay your bills, honour your obligations, see to your accommodations, and so on.
Most people see the sense in doing a will. They don’t want to leave their family with a legal mess after they die and they want to decide who benefits from their property. But enduring powers of attorney (EPAs) are just as important. They allow you to decide who is going to be looking after your personal care and property if you become incapable rather than leaving it to your family to decide because you’ve already lost the ability to.
You get to decide the extent of your attorney’s powers. And it saves your estate money because without an EPA your family has to apply to the court to appoint guardians and managers: that process isn’t cheap.
Sometimes people put off getting EPAs. They say: “I don’t need them, I’m not old and senile yet!” But of course younger people can become incapacitated too. Alzheimer’s isn’t the only form of incapacity.
There are two types of EPA: one for property and one for personal care and welfare. You can have just one or both.
An EPA for property gives the attorney the power to act on your behalf with respect to property you own or debts you owe. Your attorney needs to act in your best interests and generally can’t benefit themselves without your authorisation.
An EPA for personal care and welfare gives your attorney powers with respect to your health, well-being, or enjoyment of life (for example, a permanent change in residence, entering residential care, or undergoing a major medical procedure). An EPA for personal care and welfare can’t be activated until a medical practitioner has provided a certificate proving you have lost capacity.
With both types of EPAs, they can be tailored to give the attorney power either generally or in relation to specific matters. You can also place conditions on the attorney, like they have to consult with certain people about their decisions. If your attorney starts running amok, your family can apply to the Court to have the EPA revoked.
If you would like to know more, the Law Society has prepared a helpful guide which can be found here.
-David Adams, Staff Solicitor