No one likes to think about things going wrong, but planning ahead is invaluable if they do. Enduring Powers of Attorney let you decide who can make decisions about you and your property if you can’t make those decisions due to illness or injury.
People are often surprised to learn that your “next of kin” has no automatic right to make those decisions for you. If you want to be sure that they can, you need to appoint them as your attorney under an Enduring Power of Attorney. If you don’t, your family may need to go to court to have a property manager and welfare guardian appointed to make those decisions. We recommend that everyone over the age of 18 years sets up an Enduring Power of Attorney, after all, accidents can happen to anyone!
Often confused as being one and the same, there are also some important differences you should be aware of between a general Power of Attorney, and an Enduring Power of Attorney.
Enduring Power of Attorney (EPA)
There are two types of EPA, one related to ‘Personal Care and Welfare’ and one related to ‘Property’. Both kinds of EPA refer to the donor, or the person granting the EPA and the attorney, or the person given the power to make decisions on behalf of the donor. How many attorneys you can have, and the kind of decisions they are allowed to make, depends on the type of EPA.
Personal Care and Welfare
A Personal Care and Welfare EPA allows you (the donor) to appoint an attorney to deal with any of your healthcare decisions, but only if you lose your mental capacity, for example, due to an accident, illness or mental decline. A certificate from a medical practitioner is required before this type of EPA is active.
Only one person may act as your attorney, but you have the option of including a successor attorney in the event that your first attorney can no longer act.
The attorney is not permitted to make decisions for you related to marriage, divorce, adoption or medical experimentation, or to refuse consent to standard lifesaving medical treatment for you.
A Property EPA allows you (the donor) to appoint an attorney to deal with your property affairs, including bank accounts and anything you own – not just your house. However, with this kind of EPA you can appoint more than one attorney to act jointly (meaning both must work together), or jointly and severally (meaning they can act together or separately). You also have the option of allowing your attorney to act immediately, or wait until you have lost your mental capacity.
It is important when you are choosing an attorney to choose someone that is trustworthy, as there is potential for the role to be misunderstood or abused. Think about whether it is appropriate to give them general power to act on your behalf, or whether you wish to restrict the powers that you give your attorney, such as requiring them to consult with others before making a decision.
Power of Attorney (POA) and Deed of Delegation
A POA relates to the donor’s property affairs, and can often be confused with the EPA for property. A Deed of Delegation delegates trustee and company powers. They are often combined into one document. This document is similar to an EPA, and is used often to allow a family member to operate bank accounts or look after assets while a donor is overseas.
But the POA and Deed of Delegation has some important limitations. The main difference is that a general POA and Deed of Delegation stop being valid if the donor loses their mental capacity (unlike a property EPA).
It’s important to be aware that if you have a trust or company and you are planning on leaving the country, you should not to rely on your EPA for property to allow your attorney to sign documents on your behalf (in your capacity as a Trustee or Director). You need a POA and Deed of Delegation for that.
All of these documents stop working on the death of the donor.
Deciding on the kind of Power of Attorney you need depends on your individual circumstances, including whether you are a company director or a trustee. Our life planning team will be happy to talk with you and find out what is the best fit for you.