What is an enduring power of attorney and who should have one?

What is an enduring power of attorney?
 
An enduring power of attorney (“EPA”) is a legal document which allows you to appoint someone to make decisions for you during your lifetime. There are some circumstances in which you may be unable to make decisions. For example, you may be overseas, you may be too ill, or you may have lost capacity.
 
It is not only ageing people who lose capacity.  Losing capacity can happen to anyone at any time. Sadly, people lose capacity for many reasons, including as a result of dementia, temporary illness, intellectual or psychiatric disability or brain injury.

Who should have an EPA?
 
If you are over the age of 18 and have capacity to understand the nature and the effect of the power you are giving under an EPA, it is advisable that you have one in place.
 
Most people have a will in place, but not many think to have a plan in place for if they are unable to make important decisions about their own personal, health or financial matters. If you were in an accident and end up in hospital, will someone be able to pay your bills for you, make decisions about your assets, sell properties should the need arise?
 
Why have an EPA?
 
Having an EPA in place gives you peace of mind of knowing that if something were to happen to you, you have given someone the power to make the decisions which need to be made.  It may also be a relief for your family to know that you have arranged an EPA as it takes away the pressure of the family having to decide (and possibly disagree) over who should be making the decisions.
 
A properly drafted EPA gives your attorney the power to make decisions on your behalf when they need to be made. You can specify who makes the decisions, what sorts of decisions they can make and what factors would be taken into consideration.  You also nominate when the power begins.
 
You can put specific restrictions into your EPA such as a block from your attorney accessing a particular bank account or selling the family home. You can also include a requirement that your attorney must report regularly to another person on the actions they are taking, if relevant this could include your accountant or lawyer.
 
An EPA ensures that you have a say in who has a say.
 
What sorts of powers can you give to an attorney under an EPA?
 
You can appoint someone under your EPA to make decisions about your personal (including health) matters and/or financial matters.
 
An attorney appointed only for personal matters has the power to make decisions for you when you no longer have capacity to make the decisions yourself.  Examples of personal (health) decisions may include where and with whom you live, day-to-day issues like diet and dress, and whether to consent or not consent to particular types of health care for you (i.e. operations).
 
Attorneys appointed for financial matters may have to make decisions such as deciding how your income should be invested and the sale of assets.
 
Can you limit your attorney’s powers?
 
Once the power to make a decision begins, your attorney will have full control over that decision unless you have specifically limited that power in your EPA.
 
You can specify any types of decisions that you do not want your attorney to make. You can also provide specific instructions about what you would like your attorney to do. Your attorney is obliged to act in accordance with your instructions.
 
You may decide to limit your attorney’s power to act for you to matters involving property only, or a requirement that the attorney consult with a family member before acting.  You could even direct that an attorney be appointed only for a very specific purpose, such as paying your bills.
 
It is up to you to decide what types of powers you give and to whom.  You may nominate any, or all, of these matters for your attorney to have power to make decisions in.
It may be advisable not to place too many restrictions on your attorney’s power, as this may make it difficult for them to make decisions on your behalf.  This is something best discussed with a lawyer.
 
Is my attorney obliged to act in accordance with any legislation?
 
An attorney is also bound by legislation when it comes to some powers. For example, the Trusts Act (“the Act”) details the types of investment that a trustee (which is your attorney) is authorised to make. This means that if you lose the capacity to make financial decisions, the only investments your attorney can make on your behalf are those that are stipulated under the Act, unless the consent of the Court is obtained.
 
Your attorney’s role is to act in your best interests – they cannot act to benefit themselves.
 
Can I appoint more than one attorney?
 
Yes.  If you decide to appoint more than one attorney, there are a number of options available as to how they will act.

You may appoint 2 or more attorneys to act:-

• jointly (together); or
• as a majority; or
• severally (any 1 of your attorneys can sign); or
• successively (power is given to a particular attorney only when the other attorney’s power ends, or when the other attorney is not available to act).

 
If you choose two or more attorneys to make decisions jointly, it is important to be aware that they have equal authority and can act only with the agreement of them all. This is why it is important to consider and choose your appointment/s carefully.
 
If one of your attorneys dies, the remaining attorneys exercise the power.
 
Who should be my attorney/s?
 
Should an attorney need to exercise their power, your EPA will become a very important document. You should choose someone you trust completely and who you are confident would be willing and able to understand and act on their obligations.
 
The attorney/s you appoint will need to be able to make decisions whilst possibly facing a difficult time emotionally.
 
Many people choose their spouse or an adult child, but you may prefer to appoint another family member or friend with expertise in a particular area.
 
The attorney you appoint for financial matters should be someone who you know could manage your financial affairs if need be.
 
Often people appoint an attorney and they may also be the sole beneficiary of the will. There is no restriction on this however you should always get tailored advice on this from your lawyer.
 
There are some rules to consider when appointing your attorney:-

• they need to be over 18 years of age;
• they must not be your current paid carer or health-care provider (such as your nurse or your doctor); and
• for financial matters they must not be bankrupt or insolvent.

 
How can I be sure that my attorney will act in my best interests?
 
If it is the case that you are unable to oversee your attorney’s decisions (for example if you lose capacity), the Adult Guardian and the Court have the power to protect your interests.
 
Your attorney may be asked to provide evidence of receipts and expenditure or more detailed accounts, and these can be audited. An attorney who does not protect your interests can be removed or changed. If an attorney steals from you, it would be considered a criminal offence and would be dealt with under that legislation.
 
How do I appoint an EPA?
 
Once prepared and finalised, your EPA document has to be signed by you and your attorney/s in the presence of appropriate witnesses.  We will arrange all of this with you.
 
In our view, an EPA is as important as a will, and for this reason we suggest that you obtain legal advice to help you draft it according to your specific wishes.
 
When should I consider making an EPA?
 
You can prepare an EPA at any time and specify in the EPA when you would like your attorney/s power to start.  Sometimes, people decide to make an EPA when they have a significant life event coming up or when they are about to undergo a medical procedure.  EPAs are also regularly made when making a will.
 
We suggest that you prepare an EPA without delay so that you can have peace of mind.
 
When does an attorney’s power begin?
 
An attorney appointed for personal matters only has the power to make decisions for you when you no longer have capacity to make the decisions yourself.  Specifically, it does not begin until (if ever) you are incapable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision.
 
With respect to an attorney appointed for financial matters, you can specify when that attorney’s power begins.  It may be immediately, from a specific date under specific circumstances or only when you lose capacity.  If you do not name a date or an occasion, it begins immediately.
 
It is important to note that even if you give your attorney power immediately, you may also continue to make decisions yourself while you are able to do so.
 
When do the powers given under an EPA end?
 
For personal (including health) matters, the power given to an attorney continues for as long as you remain incapacitated.  If you regain capacity, you then take back the power to make decisions for yourself and the power ends.
 
With financial matters, the power will continue until it is revoked.
 
Can I revoke an EPA?
 
Yes.  You can revoke an EPA at any time you wish, provided you are capable of understanding what you are doing. If you do change or revoke this power, you must inform your attorney.
 
If you try to revoke an EPA when you have already lost capacity, it will continue to operate unless a Court decides that the power should come to an end.
 
Is there anything else that will end the power under an EPA?
 
Yes, here are examples of other situations which will bring an EPA to an end:-
 
Marriage – it is revoked unless your new spouse is already your attorney (if your new spouse is your attorney, the only power that is revoked is that of any other attorney).
 
Divorce – it is revoked to the extent it was given to your former spouse.
 
Death - if you die, it is revoked in its entirety. If your attorney dies, their power ends.
 
Inconsistency – if you make an inconsistent document. The power is revoked to the extent of any inconsistency with any later document you complete, such as an Advance Health Directive or another EPA.
 
Withdrawal by your attorney – your attorney may withdraw by giving you a signed notice or by getting the Court’s leave to withdraw.
 
Paid carer – if your attorney becomes your paid carer or health-care provider, the power is revoked.
 
Your attorney loses capacity – the attorney’s power is revoked if he/she becomes incapable of understanding/foreseeing the effects of a decision and of communicating that decision.
 
Bankruptcy/insolvency – if your attorney becomes bankrupt or insolvent.
 
What happens to EPA when it is completed?
 
We suggest you store the original EPA with your will and keep a copy to refer to.  If you wish, your EPA can be stored at the office of Arthur Browne & Associates in safe custody free of charge.
 
You should also give a copy to anyone else who may need to be involved, such as your attorney, doctor, solicitor, accountant and financial adviser.
 
Do I need to register my EPA?
 
No.  It is not necessary to register an EPA unless it is likely to be used in transactions related to buying or selling land. We can assist you in registering the document upon it being prepared or hold onto it and register it if it ever becomes necessary.
 
If the power is revoked, you need to then deregister the document by lodging a revocation form in the Land Titles Office. Again, we can assist you with this if required.