A Guide to Enduring Powers Of Attorney
What would happen if tomorrow you got into a car accident and became brain damaged? Who would make those medical decisions for you? What if you suddenly felt too ill or fatigued to go to the bank to sort out your financial affairs? Who would be able to go on your behalf? What if you get dementia – an awful thought but one that numerous elderly are facing? Life can change instantly. All it takes is one accident, injury or illness and you can become unable to deal with your affairs and make your own decisions as you had before.
Many people may have thought about having a Will put in place, and that’s great. But many people don’t also think of putting Powers of Attorney in place. A Will will deal with your affairs once you’ve deceased but Powers of Attorney, enduring or not, help deal with your affairs whilst you’re still alive. Thus, they are just as important to have in place. This is so whether you are getting old or whether you’re young. Like a will, Enduring Powers of Attorney are required to meet legal requirements to make them valid.
What is an Enduring Power of Attorney?
Enduring Powers of Attorney (EPOAs) essentially give another appointed person who you trust to deal with your affairs the authority to do so. Having them in place can give you the peace of mind that you have been able to choose someone you trust to make your decisions for you should anything bad ever happen.
You can give the legal authority to act to persons decided by you while you are still able and they are in the form of two documents:
- Personal Care and Welfare
1. Personal Care and Welfare
Enduring Power of Attorney for Personal Care and Welfare will only take effect in the event of mental incapability and cover such situations as:
- A donor lacking the capacity to make a decision about a matter relating to his or her personal care and welfare; or
- Being unable to understand the nature of decisions relating to his or her personal care and welfare; or
- Being unable to foresee the consequences of decisions relating to his or her personal care and welfare or the failure to make those necessary decisions; or
- Being unable to communicate when decisions need to be made in regard to personal care and welfare.
For an Enduring Power of Attorney for Personal Care & Welfare there can be only one person appointed to act. An example of the decisions that may have to be made include where a person is to live and what medical treatment they are to have. Your wishes can be communicated to your attorney while you are still able.
Things to think about:
Who should be appointed?
The person would usually be a close family member or friend and somebody you trust to do the job appropriately. Another person can and should be appointed in the event that the original is unable to act. For example if they are adjudged bankrupt or become mentally incapable themselves.
Should there be general authority to act or authority to act only in specific aspects of your personal care and welfare?
It is usual for general authority to be given.
Should there be a requirement for the attorney to consult with others in their decisions?
This can be a general wish that consultation is with other family members. The attorney must always consult with the subject person if possible.
Should there be a requirement that the attorney must give information to others when acting?
This is often included so all family members are kept informed.
Should a particular doctor or specialist be required to assess capability before the Enduring Power of Attorney is activated?
A doctor with a particular scope of practice can be specified, for example, your own GP, a psychiatrist or geriatrician or instead this can be left open.
I already have a Power of Attorney or a Deed of Delegation, do I need an Enduring Power of Attorney?
Only an Enduring Power of Attorney for Personal Care and Welfare will be valid in the event of mental incapacity. The above documents are usually used for temporary absence or incapacity and only applied to property.
An Enduring Power of Attorney for property covers any real or personal property and includes any interest in property. It also comprises any money, business or undertaking and any right or power you may have in respect of any property.
The Enduring Power of Attorney can apply immediately or in the event of mental incapability and it does not apply to property owned by a trust or a company.
Things to think about:
Who should be appointed?
The appointee should be over 20 years of age, not bankrupt, trustworthy, mentally capable to deal with your property, on good terms with you and available to help should they be required.
The person or persons could be a family member, a close friend, your lawyer, accountant or a combination of these.
You decide whether you wish each person to be able to act independently or if they are to make decisions in consultation with each other.
What authority should they have?
There usually is general authority to act in all property affairs.
Should there be any limitations, conditions or restrictions on what the attorney can do?
Usually not, apart from having to act entirely in your interests at all times.
When should the Enduring Power of Attorney for Property take effect?
This can be immediately or when the subject person becomes mentally incapable.
Should a successor attorney be appointed?
This is recommended if there is only one original attorney appointed. It would apply if the original attorney dies, was adjudged bankrupt or became mentally incapable themselves.
Should the attorney be required to consult with and give information to others?
They must do these things with the subject person (“the donor”) otherwise consideration should be made to a requirement to inform and consult with other persons (e.g. other family members).
Should the attorney be given the power to sign a Will for the subject person?
Usually the subject person will also sign a Will at the time of attending to the Enduring Power of Attorney or a review of any current Will takes place to ensure it is appropriate.
To what extent should the attorney be allowed to benefit themselves?
An attorney can reimburse themselves for out of pocket expenses and pay themselves only if acting in a professional capacity. (E.g. a solicitor or accountant). Anything else needs to be specified in the Enduring Power of Attorney.
What are the obligations of an attorney?
An attorney for Property has an obligation to keep a record of all transactions if the person is mentally incapable. No other reporting obligations are required unless ordered by the Family Court.
How does an Enduring Power of Attorney come to an end?
- Death of the subject person
- Bankruptcy of an attorney
- Death of an attorney – if no successor was appointed
- Mental incapability of an attorney
- Disclaimer of Enduring Power of Attorney by an attorney
- Suspension of Enduring Power of Attorney by the subject person
- Revocation of Enduring Power of Attorney by the subject person
How are any problems dealt with?
The Family Court has the power to deal with any problems or issues arising. An attorney or interested family member can apply.
Why should you have an Enduring Power of Attorney?
The reasons are similar to the need for insurance – you hope you never have to use it, but if you do having it is essential.
The convenience of having an Enduring Power of Attorney for Property is that if you still have capability, or have a slow decline in the ability to manage your own property, a document is already in place to assist you.
If you don’t have an Enduring Power of Attorney and become mentally incapable the Family Court can make orders appointing a property manager for your property and a Welfare Guardian for your personal care and welfare issues.
In the event that this occurs this can be an expensive and time consuming process requiring medical evidence and the appointment of a lawyer for the subject person.
Why is it important to involve a lawyer?
Enduring Powers of Attorney must be in the prescribed form as described in the Protection of Personal and Property Rights Act 1988.
They must be witnessed by a Lawyer, Registered Legal Executive or an authorised trustee company employee.
A signed certificate from the witness must be attached to the Enduring Power of Attorney.
Enduring Power of Attorney – Common Terms
A person appointed under an Enduring Power of Attorney to act on behalf of the person who has appointed him or her (the donor) in respect of the donor’s property and/or personal care and welfare matters.
A person (the donor) who appoints another person (the attorney) under an Enduring Power of Attorney to act for him/her in respect of the donor’s property and/or personal care and welfare matters.
Enduring Power of Attorney (EPA)
An Enduring Power of Attorney is a power of attorney which a person (the donor) appoints another person (the attorney) to act for him/her in respect of the donor’s property and/or personal care and welfare matters. The difference between an Enduring Power of Attorney and an ordinary power of attorney is that an Enduring Power of Attorney does not become ineffective in the event that the donor becomes mentally incapable.
An Enduring Power of Attorney in relation to your personal care and welfare.
An Enduring Power of Attorney in relation to Property.
The sooner you grant them the better. Don’t think you are too young to do it. Even if you have only just bought a house or are thinking of starting a family, it’s a good idea to not only have a Will drawn up by a lawyer, but to grant Powers of Attorney at the same time. That way you can feel reassured that if anything were to happen to you, you and your property will be looked after. It’s also nice to think that things will be made a bit easier for family if that were to happen. They can manage you affairs and have the ability to make any urgent decisions regarding your welfare.
It is always best to have a lawyer help you with granting Powers of Attorney as they can explain what needs to be done and often point out the implications you might not have thought about. Legal advice and guidance will make the whole process a lot easier and ensure your plans are effective.