An Enduring Power Of Attorney is a document that enables you to appoint a person or entity to make decisions on your behalf if you lose capacity or for other reasons would have difficulty managing your own affairs. It is different to a general Power of Attorney for the reason that a general Power of Attorney comes to an end once you lose capacity.
Do I need an Enduring Power of Attorney?
Yes. Everyone over 18 years should have an Enduring Power of Attorney (EPOA), especially:
- anyone who is facing the prospect of declining health, particularly if their condition affects their ability to make decisions; and
- anyone who is a member of a self-managed superannuation fund (SMSF).
What happens if you don’t have an Enduring Power of Attorney?
People often assume that their spouse will be able to manage their affairs if they are incapable of doing so themselves. Unless the assets are jointly owned, this will not be possible.
It may be necessary for someone interested in your affairs to apply to the NSW Civil and Administrative Tribunal (NCAT) to be appointed as your decision-maker. This can take time, and, in the meantime, your affairs may come to a stand-still.
Questions to ask yourself when considering the use of an EPOA?
- Do I need an EPOA that continues to have effect even if I can manage my own affairs?
- Who is the best person to manage my affairs?
- Have I been diagnosed with a physical or psychiatric condition which may affect my decision-making capacity?
- Do I need to consult my doctor?
- Should I appoint more than one attorney and, if I do, will they make decisions jointly, unanimously, individually or by majority?
- Should I limit the amount of money an attorney can deal with at any one time or limit the sorts of decisions the attorney can make?
- Do I have specific views on medical matters (including the use of life support or blood transfusions) that should be recorded in an Advance Care Directive? (Refer to Catherine Henry Lawyers information sheet: Advance Care Directive)
- Should the financial powers under an EPOA commence immediately or only if and when I lose capacity?
Enduring Powers of Attorney – essential for members of self-managed super funds
If a trustee of a SMSF loses capacity and there are no other trustees remaining, an administrator or other legally recognised substitute decision-maker must be appointed within six months or the fund becomes non-compliant, causing significant tax ramifications. Rather than running this risk, it is much simpler to have an EPOA in place.
Centrelink allows recipients to nominate a friend or family member (called the nominee) to administer their financial affairs. The nominee can be paid some or all of the recipient’s pension and can then decide how it is spent. Centrelink can advise on when a nominee is appropriate and will help make arrangements if necessary. There are two sorts of nominees for Centrelink purposes. If the principal can sign the nominee form, Centrelink is usually satisfied.
What to do if things go wrong?
Speak to NCAT or a solicitor as soon as practicable.
We recommend you consult with one of our experienced legal practitioners before you complete an EPOA document. Our expert solicitors can help you to understand clauses that can be inserted to better protect your interests, can take steps to reduce the risk of the validity of the document being challenged. Our team is also able to advise you in deciding who to appoint, the power given and as to when the power should start.
Call Catherine Henry Lawyers on 1800 874 949 or (02) 4929 3995 for a confidential chat about your estate documents, or simply complete our confidential online enquiry form.