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Changes to powers of attorney

24 Jul 2017

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By Gillian Stuart, Family Law specialist, Aspiring Law

Few acts in our lifetime require more trust than giving another person the right to legally act on our behalf. And, there can be few more onerous responsibilities than taking on that significant duty.

The reasons we can be left unable to do something for ourselves are myriad. We might be out of the country and require someone else to finalise a deal in our name, or it could be a case of being completely incapacitated by illness and needing someone to make significant medical or financial decisions for us.

There are various types of “powers of attorney” tailored to the particular need at hand. With an ordinary power of attorney, authority is given by one person (the donor) to one or more others (the attorney/s) – it might be to act on one specific issue, or all matters, on the donor’s behalf. An ordinary power of attorney is valid until it expires if it’s for a fixed term, or from when it is cancelled. It’s really important to understand, the arrangement can only stand as long as the donor has the mental capacity to make decisions. The law, under this particular framework, prohibits the attorney having more power than the donor.

Enduring powers of attorney (EPA), however, have a different set-up all together. There are two types of EPA: personal care and welfare, and property. Your personal care and welfare EPA can only come into effect when a medical professional has confirmed you have lost the mental capacity to manage your own affairs, at which point your attorney – and there can be only one – will take over, but only in relation to matters relating to your personal care and welfare. A property EPA is different again – it centres solely on property, and can be designed to come into effect immediately, or, alternatively, only if the donor loses mental capacity. A property EPA can, and often does, include more than one attorney.

Following a recent review, important changes have just been implemented to better protect donors, ensure EPAs are as accessible as possible to everyone and also make the role of the attorney clearer for all to understand.

New forms, more guidance

The reforms include the implementation of new, prescribed standardised EPA forms, which are an improvement. In years gone by, EPAs often appeared light on detail, and attorneys sometimes didn’t really understand what they were meant to be doing, and how they were meant to do it. These new forms provide a huge amount more information in clear and, the hope is, user-friendly language.

Among other amendments, solicitors are now required to confirm they are satisfied the donor fully understands the implications of granting an EPA, as well as highlighting the attorneys’ obligations to consult, which are both good safeguards.

If you’re approached to be someone’s attorney, it’s vital you completely understand what you’re signing up for. It is a very serious, onerous and a potentially stressful, undertaking, which brings with it stringent duties and obligations. Whichever power of attorney is in play, your role must always centre on acting in the donor’s best interests. Be aware, too, if the courts become involved, you will be required to follow its orders, which can override the EPA.

Your duties as attorney

Other important factors to note as an attorney for a personal care and welfare EPA include that you can’t:

  • Act as a trustee on a trust in place of the donor
  • Make an oath or declaration on the donor’s behalf
  • Act outside any restrictions in the EPA
  • Decide the donor will get married or divorced
  • Make a decision about the adoption of any children
  • Refuse consent to any medical treatment that might save the donor’s life or prevent serious damage to health
  • Consent to the donor having electroconvulsive therapy or any brain surgery which is meant to change the donor’s brain/ behaviour
  • Consent to the donor being part of any medical experiment, unless it is to save the donor’s life.
  • Act for your own benefit, or for anyone other than the donor’s benefit

If you become an attorney, the overarching advice is: be crystal clear on all of your obligations and duties; stick to the rules; maintain good financial records for any periods when you are acting for the donor, understand your obligations to consult both the donor and any other attorneys and respect their views. And, if in doubt, take immediate legal advice. As an attorney, your greatest protections are acting in good faith, taking reasonable care at all times, and seeking help if the way seems unclear.

Choose ‘your voice’ wisely

Putting the shoe on the other foot, if you are choosing an attorney, do so carefully and judiciously. While there are few restrictions on who can be appointed – essentially, they must be at least 20 years old, not be bankrupt and have the mental capacity – you must have total faith in their honesty and their complete willingness to take on the role.

I was involved in a case some years ago where a son had been appointed attorney. It transpired he had been dipping into his dad’s bank account. Thankfully, in that particular EPA, the donor had stated that his daughter had a right to get information from her brother regarding his handling of his dad’s financial affairs. That safeguard did its job, and her investigations uncovered her brother’s fraud.

If you’ve never looked into an enduring power of attorney, it’s really important you do. Many people incorrectly assume they’re just for senior citizens who might need someone to make the call whether they need to go into care. Sadly, we see it all the time – people can be incapacitated in the blink of an eye at any age and need someone authorised to speak up, and act, for them.

Nowadays, no hospital, bank or any other institution will allow you to assist anyone, even if they’re a close family member, unless you have been formally appointed attorney. Make no mistake, if you fail to proactively sort an EPA, should something happen to you, chances are your loved ones will be hamstrung, left forced to face the unnecessary cost and stress of applying to the courts to have an appointment made.