Relationship / Family
What you need to know about the Enduring Powers of Attorney and the Protection of Personal Property Rights Act 1988.
It’s a reality that as we age, many of us may face unexpected illnesses and accidents that could mean we lose the ability to take care of ourselves and manage our property. During these times we can lean on our family and friends to support us and look after us as best they can. But what happens if we need someone to make a significant decision on our behalf such as accepting medical treatment, selling a house, or operating a bank account?
In such situations, doctors, lawyers, and banks need to see what is called an enduring power of attorney (“EPOA”). This is a legal document in which you as the donor give authority to a person or persons known as the ‘attorney’ to make decisions on your behalf.
What are enduring powers of attorney?
EPOAs are governed by the Protection of Personal and Property Rights Act 1988 (“PPPR Act”) which sets out the obligations of your attorney. There are two different EPOAs, one for your personal care and welfare and one for your property. You can only appoint one person to act at a time for your personal care and welfare EPOA, but you can choose multiple people or even a trustee corporation for your property EPOA. There is the option to also choose a substitute or successor attorney which we always recommend.
Who should act as your enduring power of attorney?
When deciding who to appoint as your attorney for personal care and welfare, we recommend choosing someone you trust and who understands your lifestyle and wishes. It is common for couples to choose each other for this role; however, people also choose their children, nieces and nephews, and brothers and sisters. It may be appropriate to choose someone who has experience in business, property and financial matters for your property EPOA. The Partners at Brookfields are available to take on the role of your attorney or substitute attorney in relation to property if you are not sure who to appoint.
When does an enduring power of attorney take effect?
An EPOA will not come into effect unless a doctor certifies that you are incapable of making decisions for yourself. However, in relation to a property EPOA, you have the option to choose whether it comes into effect immediately should you wish for your attorney to handle a business or property matter for you.
You can also place certain conditions on your attorney to suit your circumstances such as:
- Limiting how much money your attorney can spend on your behalf before being required to check in with someone such as your accountant or lawyer.
- Requiring your attorney to consult and/or provide information about their actions and decisions to certain people such as other family members, friends, or professionals.
- Preferences as to rest homes and other care facilities if you need to move into care.
What happens if you don’t have an enduring power of attorney in place?
If you do not have EPOA in place and you require someone to act on your behalf later in life due to incapacity, an application will need to be made to the Family Court pursuant to the PPPR Act to appoint a welfare guardian and/or property manager. This can be a costly and lengthy process. For this reason, we recommend having EPOA in place, particularly as you get older. Many rest home and hospital facilities may also require you to have EPOA. This is to ensure that you have someone to look after your affairs and pay your fees if you lose capacity.
It’s important to put an EPOA in place at a time when you can feel confident about your decisions for yourself, and for your loved ones in the future. If this has been a reminder that it’s something you need to arrange, or that your current EPOA needs updating, reach out to our team. While we’re available to act as your attorney or substitute attorney in relation to property, we can also provide the advice you need to make the right decision for your personal situation.
