The importance of having an Enduring Power of Attorney
An Enduring Power of Attorney (“EPOA”) is a legal document that specifies who you would like to manage your affairs during your lifetime.
They commonly take effect when you lose your capacity to manage your own affairs, whether temporarily or permanently. Losing your capacity is not only a concern when you are getting older, it can happen at any time, for example if you are too unwell to make decisions regarding your medical treatment or if you suffer an accident and are unable to communicate your wishes.
An EPOA will ensure that the person you nominate can step in to make financial, personal and/or health decisions on your behalf. For this reason, we advise that everyone over the age of 18 years should consider preparing an EPOA as an important part of planning your future.
What happens if you don’t have an Enduring Power of Attorney?
If you suddenly lose your capacity to make health decisions, your statutory health attorney will be able to make decisions for you. This is a person who is closest to you, such as your spouse, close friend or relative, or a person who is responsible for your primary care.
For personal and financial affairs there is no equivalent legislative power, your loved ones may be able to help with some of the decisions to assist in your daily living, however, formal authority will be needed for a number of decisions, especially if disagreements arise. If you don’t have an EPOA, then someone may apply to the Queensland Civil Administrative Tribunal (QCAT) to have a person appointed to act on your behalf. This process can be costly and complex, and it can take some time to obtain a decision.
The clear advantage to having an EPOA is that you have the ability to nominate who you want to manage your affairs and you can ensure that this is someone you trust and who knows what your wishes are.
What are the requirements for preparing an Enduring Power of Attorney?
Having an EPOA prepared is a process that we can assist you with either as part of your succession planning or on its own.
The first requirement is that you have capacity to enter into the document.
The person that you appoint as attorney must also accept the appointment by executing the document.
There are other formal requirements as to the form and to witnessing which we take care of when preparing the document for you.
Who should you choose to be your attorney?
It is important that you take care with who you chose, you are potentially giving another person total control over your finances and the ability to make decisions regarding your personal and health affairs, when you are unable to do so for yourself. Therefore, it should be someone that you trust and that understands the obligations and responsibilities of being an attorney.
In addition to being someone that you trust, they must also be:-
- at least 18 years of age;
- a person that is not your paid carer (a person receiving carer’s pension is not considered a paid carer for this purpose);
- a person that is not your health-care provider; and
- a person that is not a service provider for a residential service where you are a resident.
You don’t have to nominate only one person to be your attorney, you may also elect to nominate someone different to manage your financial and personal/health affairs.
When can an attorney act on your behalf?
You can nominate when your attorney’s power for financial matters begins. For example, you may wish for it to begin immediately upon you signing the EPOA or at a nominated date (for example, if you were to travel overseas) or not until a specified occasion, such as when you are certified by a medical practitioner as being incapable of handling your own financial affairs.
Your attorney’s power regarding your personal/health matters begins only when you are incapable of making those decisions for yourself.
What are the roles and responsibilities of your attorney?
While managing your personal and health affairs your attorney must:-
- act honestly and with care;
- recognise your right to confidentiality;
- consider your personal values, views, culture and personal relationships;
- apply the general principles under the Powers of Attorney Act 1998;
- comply with health principles under the Powers of Attorney Act 1998;
- ensure that decisions positively contribute to your health and well-being;
- choose the least intrusive method of treatment available; and
- consider advice from your doctors and health care providers.
Managing your personal and health affairs will generally mean that they manage your medication and any medical treatment you require, and organise your day-to-day life and care which includes where you live and what you participate in.
While managing your financial affairs your attorney must:-
- avoid entering transactions that may result in a conflict of interests between their role as an attorney and their personal interests;
- keep your property separate and distinct from their own;
- keep detailed records and accounts of transactions; and
- not give away or dispose of your property expect when giving reasonable gifts or donations that yourself would normally make.
Typically, while managing your financial affairs your attorney will ensure that your bills and debts are paid, prepare your tax returns, protect your assets and manage your investments.
We strongly recommend that prepare or update your EPOA. If you don’t have an EPOA or are considering updating yours, then please contact our office to arrange a convenient time to meet with one of our experienced solicitors.