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An Enduring Power of Attorney is a legal document appointing an attorney to act on your behalf if you cannot or do not wish to. Unlike a Will, an EPA operates while you are alive

An Enduring Power of Attorney is a legal document appointing an attorney to act on your behalf if you cannot or do not wish to. Unlike a Will, an EPA operates while you are alive

By Tammy McLeod*

In my view Enduring Powers of Attorney (“EPAs”) are the most practical legal documents that we have.

Generally, wills are considered the most useful and common legal document, and while wills are exceptionally important and are not widely enough obtained, if you die without a will at the very least, there is a prescribed process that must be followed. However, if you lose mental capacity and you don’t have EPAs in place, a Court application must be made.

There are two types of EPAs. One that relates to property and one that relates to personal care and welfare. The property attorney relates to all personal property. This does not include trust property, but only deals with assets that are personal to you. Most commonly the role of the property attorney will include accessing bank accounts, paying bills and in some cases authorising the sale of personally held property. It may also include signing documentation such as insurance claims. This can be important where someone has been incapacitated as a result of an insurable event and they have insurance in place to pay out if that event occurs. 

A common misconception in relation to lack of capacity is that if someone loses capacity, his or her wife, husband or partner can sign on behalf of the incapacitated person, particularly in relation to jointly held property. This is simply not the case. If I lost capacity and my husband wanted to sell the home or access accounts where we were joint signatories and we didn’t have EPAs in place, he would need to make an application to the Court to be appointed as my attorney to sign those documents. It is much more simple, and cost effective, to have EPAs in place. 

EPAs relating to property can be invoked either only in the event of incapacity or they can be immediately effective and endure beyond incapacity. An elderly person might be more likely to have the power of attorney effective immediately so that their attorney can deal with their personal affairs even when they still have capacity, but it may be more practical for someone else to deal with their affairs for them.

You can appoint more than one person as your attorney in relation to property. You can also have alternate appointments in case the person you have appointed is unable to act, and you may also provide that other named persons have to be consulted with or are to receive information about the actions of the attorney. This can be helpful when someone wants all their children involved, but it isn’t practical to have them all named as attorneys.

Attorneys in relation to personal care and welfare only come into effect when the donor is mentally incapacitated. The attorney makes decisions in relation to hospital care, medication, surgery, life support and ongoing care when the donor is not able to make those decisions him or herself. Only one person at a time can be appointed as a personal care and welfare attorney. The reason for that is that doctors do not want to deal with committees and often decisions need to be made quickly. Once again, you can provide for alternate appointments and you can say that certain people have to be consulted or are entitled to receive information regarding the actions of the attorney.

The cost and time involved in an application to the Court in the situation where EPAs have not been put in place are excessive given the simplicity of completing EPAs. Sometimes there may be competing interests and a number of lawyers need to be involved to represent all parties. At the very least there needs to be a lawyer for the incapacitated person and a lawyer for the proposed attorney. However, think of the situation where there is a second marriage and there could be the new partner and a number of adult children all vying for the position of attorney. They would all need to be separately legally represented and costs and time will escalate.

EPAs are the most practical legal document you can do. Any one of us at any age or stage could be involved in an event which incapacitates us. They are not just for Granny or Grandpa in the rest home.  If you do not have them, speak with your lawyer now.


Tammy McLeod is the managing director at Davenports Law, specialising in the areas of personal asset planning, trust law and Property (Relationships) Act.

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4 Comments

Timely article, going through this process myself at the moment. Nothing here contradicts anything my lawyer said, although it's good to see it all written down.

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"EPAs are the most practical legal document you can do". I agree fully with that sentence from personal experience.

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I think people should have many caveats in place. Enduring power of attorney is enduring, not so for relationships.

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wd

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