Enduring Powers of Attorney
An Enduring Power of Attorney is a document that enables an appointed person or persons to manage your finances and legal affairs on your behalf. They are called your “Attorney” (a different role to your “Executor” – see our Wills section on the Role of your Executor). Having an Enduring Power of Attorney is like having an insurance policy “just in case” you are suddenly incapacitated through accident or illness.
What is a Power of Attorney?
There are two types of Power of Attorney:
- a GENERAL Power of Attorney which ceases to operate if you become mentally incapacitated; and
- an ENDURING Power of Attorney which is specifically designed to be used after the time of any mental incapacity.
An ENDURING Power of Attorney is therefore the most important type as it allows the named person to act for you if you have become mentally incapacitated. You can have a General and Enduring Power which incorporates both types and can be used from when you sign it and continue on after any incapacity.
When Should I have an Enduring Power of Attorney?
It becomes more important to have an Enduring Power of Attorney as you get older. In comparison to accidents, age related illnesses are the most common ways of losing capacity. However it is important to consider at any age.
You should not assume that your wife or husband or other family member can automatically act for you. Without the right documents in place if anything happened to you, it may cause your loved ones additional stress and practical problems. Do not wait until you think you might need one before one is prepared as it could be too late.
When can an Enduring Power of Attorney be used?
You can nominate your Enduring Power of Attorney to be used in one of two ways:
- your attorney can commence acting anytime from the time you sign it; or
- your attorney can only act in the event that you are mentally incapacitated (as determined by a health professional) or while you have capacity, by your own written direction.
An Enduring Power of Attorney will cease to operate upon your passing.
Safeguards to limit an attorney’s power include:
- a medical certificate to be obtained before the person can act for you;
- naming more than one person and indicate how many signatures are required; and
- limiting the matters that the person can do for you.
What can my attorney do?
Whilst you are alive, your attorney will be able to handle almost all of your financial and legal affairs including but not limited to:
- operating and handing a business;
- signing documentation;
- dealing with real estate;
- handling money; and
- operating bank accounts.
Health and lifestyle issues should be dealt with by an Advance Care Directive as these decisions cannot be made by your attorney (see Advance Care Directive).
Your attorney can never make a new will for you, vote on your behalf in an election or sign a statutory declaration on your behalf. Given there is significant power given to the attorney you need to trust them implicitly. There is no real ‘policing’ of what attorneys do and there have been many examples where it has gone horribly wrong and the power has been misused which is hard to correct after the event.
How many people should I appoint?
You have many options available depending on your wishes. If you have more than one attorney nominated, you can choose whether they act together (jointly) or to act together or separately (jointly and severally). You can also nominate an alternate attorney to act if your first choice of person is unable to act. Some clients choose to nominate three or four people and nominate that it can be any two to act so there is some flexibility.
You must have utmost faith in the person you appoint. You must trust that they will act in your best interests and not follow their own agenda. Commonly husbands, wives and long-term partners give power to each other so that if one were incapacitated the other could continue to manage the joint affairs. You should discuss your requirements at your initial appointment so the documents can be set up to best suit your needs.
What if I do not have an Enduring Power of Attorney and I become incapacitated?
You cannot sign any legal document after you have become legally incapacitated. For another to act on your behalf, a family member will need to apply to the South Australian Civil and Administrative Tribunal (SACAT). SACAT will then appoint a person or a third party of their choosing (such as the Public Trustee) to act as your Administrator. This bureaucratic process may cause delays and unnecessary stress to your loved ones during a difficult time.
What about Power of Attorney kits?
Although you can buy Power of Attorney forms and kits, these are not recommended for the following reasons:
- you do not get legal advice or options that are available to you in setting up the power with inbuilt safeguards and/or flexibility;
- you may set up the power incorrectly or choose the wrong type;
- you may inadvertently have left yourself and assets open to greater risks;
- a friend or relative may present you with something to sign that you have not receive adequate advice about; and
- once you have become incapacitated, it is too late to correct any difficulties caused by incorrectly completing the forms.
These errors can cause delay and expense for your family, or losses to you if the person you appoint misuses the power you have given them. The cost of a properly drawn Power of Attorney, and legal advice about ways to protect you and your assets, provides peace of mind and is prudent insurance.
To download information on Enduring Powers of Attorney click here.
We have offices in the city, at Tea Tree Gully and Morphett Vale for the convenience of clients. In addition, for the elderly or infirm, visits can be made to clients at home or in hospital.
Call us on 08 8415 5000 or send an email to make an appointment.