What is Power of Attorney
Read on for Enduring Power of Attorney explained.
Enduring Powers of Attorney are normally considered at the same time as a will. They are used for making decisions for family members who have ill health, these decisions can be of a health, welfare or financial nature.
However as well as being commonly used to care for family members when they need loved ones to make decisions for them, Enduring Powers of Attorney and Powers of Attorney have other uses.
They can also be useful for dealing with assets and companies, in their own right as stand alone measures for asset protection for families.
Finally they are often used as part of making effective estates plans generally - especially where there are business or investments controlled through business or investment entities.
A brief explanation about Enduring Powers is provided below as these are the types of attorney power most often used in most cases for estates planning.
What does an Enduring Power of Attorney do ?
An Enduring Power of Attorney (EPA) is the legal power to make decisions on someone else’s behalf upon the terms specified in the document, while that person is still alive.
An EPA should not be confused with a will. A will only comes into effect upon death, whereas an EPA is only valid during the lifetime of the principal. Therefore, these two documents are both important as they cover different time periods.
Why give someone enduring power of attorney?
There are some circumstances in which you may be unable to make decisions about matters that concern you. For example, you may be overseas, or you may be too ill.
An Enduring Power of Attorney (EPA) is recommended over a General or Ordinary Power of Attorney as an EPA continues to be able to be used even when the person giving the power loses his or her mental capacity. A General or Ordinary Power of Attorney is only valid while there is mental capacity.
Who should you select as an attorney for your EPA?
It is very important that the principal appoints as his or her attorney someone that they know and trust as the powers of the attorney are very comprehensive. The attorney can be any person who is at least 18 years of age, is not a paid carer or health provider for the principal, and is not bankrupt.
Most couples appoint each other as their sole attorney and this is usually fine in majority of situations. However, there can be some difficulties when couples have children from previous marriages. Sometimes it might be wise to appoint one of your own children or an independent person as a co-attorney with your spouse.
What types of decisions can an attorney make?
You may give your attorney power to make decisions about personal/health matters and financial matters.
Financial matters include operating the principal's bank accounts, paying bills and dealing with land or property. Examples of personal/health matters are decisions about where and with whom you live, whether you work or undertake education or training, whether you apply for a licence or permit, day-to-day issues like diet and dress, and whether to consent, refuse to consent or withdraw consent to particular types of health care for you (such as an operation).
Personal matters include making decisions as to where the principal will live, with whom, whether they will work and if so where, as well as day to day issues such as diet and dress. Health matters include normal health care and medical treatment.
In an EPA, the principal can insert specific information about his or her wishes and also restrict or limit the powers that the attorneys have. When an attorney acts for a principal, the attorney must follow not only the wishes of the principal specified in the EPA, but also a number of principles which are set out in the Powers of Attorney Act.
If you require further information or would like to discuss an Enduring Power of Attorney, please contact our office to arrange an appointment with our Legal Practitioner Director to discuss.