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When considering estate planning, we often only think about needing a will. It is however just as is important to consider what would happen if you were not capable of making decisions for yourself due to serious physical and/or mental illness, such as Dementia.
The Protection of Personal and Property Rights Act 1988 (PPPR) allows you, when mentally capable, to make enduring powers of attorney for your personal care and welfare and for your property affairs. An enduring power of attorney allows you to choose who will manage your personal or financial affairs and how they will be managed should you not be in a position to do so yourself.
Enduring Power of Attorney for Care and Welfare (EPOA for Care and Welfare)
In an EPOA for Care and Welfare:
- You (as donor) appoint a person (your attorney) to have the power to make decisions relating to your personal wellbeing and care, for example your living arrangements and medical care. You can elect that your attorney can make decisions in respect of all your personal care and welfare affairs or only specific matters.
- Only one attorney at a time can be appointed to act in this role. You are however able to appoint a successor attorney, should your attorney not be able to take on the role.
An EPOA for Care and Welfare is only “invoked” or activated when you become mentally incapable. To activate an EPOA for Care and Welfare a certificate is required from a provider, qualified to assess mental capacity, confirming that due to mental incapacity you are unable to make decision relating to your personal care and welfare (“capacity certificate”).
Enduring Power of Attorney for Property (EPOA for Property)
In an EPOA for Property:
- You can appoint more than one person to act as your attorney or successor attorney. Your property attorney(s) will be able to make decisions relating to your property affairs like paying bills, managing your assets and selling your home. You can elect that your attorney(s) can make decisions in respect of all your property affairs or only specific property matters.
- You can specify, if more than one attorney is appointed, whether they must act jointly or severally(separately) or jointly and severally, when making decision in respect of your property affairs.
- You may also elect when your EPOA for Property is activated:
- (i) when you are mentally incapable (this would require a capacity certificate); or
- (ii) while you are mentally capable and continuing when you become incapable. It is important to note that if you elect this option the EPOA for Property will activate as soon as it has been signed and witnessed by you (as donor) and your attorney(s).
It is very important when appointing an attorney to appoint someone you trust and someone who you are confident will be able to undertake the role as your attorney to act in your best interests. You do not need to choose the same attorney(s) to act under your EPOA for Care and Welfare as in your EPOA for Property.
If you had no enduring powers of attorney in place, your family or loved ones would need to seek the Family Court’s help to appoint a Welfare Guardian and/or Property Manager(s) to act on your behalf in respect of your personal care and welfare and/or property affairs. This can be costly and a time-consuming process and can create stress at what may already be a difficult time.
Important questions to ask yourself when creating an Enduring Power of Attorney
- Do I have to revoke any existing enduring power of attorney? If you prepare a new enduring power of attorney and do not revoke your prior enduring power of attorney, it remains valid and will run alongside your new enduring power of attorney. This may cause difficulties or conflict.
- Do I want my attorney to deal with all matters on my behalf or only specific matters? If your attorney is authorised to deal with specific matters only, these will need to be specified in your enduring power of attorney. It is important to discuss the consequences of your enduring power of attorney not covering of all property or welfare and care matters with the person preparing your enduring power of attorney.
- Do I want the Family Court to authorise my property attorney(s) to make a Will for me? Your Will may become unworkable due to changes in circumstances. If so, you may wish to authorise your property attorney(s) to prepare a new Will. Note the Family Court will closely scrutinise any proposed new Will and anyone benefiting under the existing Will will be involved in the process.
- Do I want my attorney(s) or any other person to be able to benefit from my property? If yes, you will need to provide for this in your EPOA for Property, to ensure that your attorney(s) have the authority to act for the benefit of someone other than you. Understanding your asset and income structure is essential. If assets are held or income generated in your sole name this may have an effect on your partner/spouse and people that are financially dependent on you.
- Do I want my attorney(s) to consult and provide information to anyone? You can specify that your attorney(s) is to consult with and/or provide information to a specified person(s) in respect of any decisions or particular decisions they make under either your EPOA for Care and Welfare or EPOA for Property.
- Do I want my attorney(s) to report to anyone? You can specify that your attorney(s) are to report to a particular person, for example to an accountant, your lawyer, or another family member, about the actions they have taken. This would provide an additional review of your financial situation by an independent person and ensure that your attorney(s) are acting in your best interests.
Need more information or help?
The team at Brookfields can provide practical advice and assistance tailored to your specific circumstances. We have decades of experience in advising on family trusts and generational ownership structures to record your intentions. Please let us know how we can help.
© Brookfields Lawyers 2024 – All Rights Reserved
14 November 2024
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