The Importance of Having an Enduring Power of Attorney.
Many people assume that having a Will is the main focus of any personal asset planning or business planning. Unfortunately having a legally binding will is only half the protection you need. A will covers you when you pass away and who should look after your affairs; but who will look after your affairs if something happens to you and you are still alive?
So what is an Enduring Power of Attorney?
An Enduring Power of Attorney is a legal document where you appoint another person or persons to manage your affairs, including both financial and personal as well as health decisions while you are alive.
An Enduring Power of Attorney can commence immediately for financial affairs so that your attorney can deal with your financial affairs straight away or at a pre-determined time in the future.
This may be important if you go overseas or you want to enjoy your retirement years without having to deal with paying the bills and worrying about dealings with Centrelink.
Alternatively, the power in the document can start on you losing capacity (this is most common). Losing capacity can be either temporary or permanent. You can lose capacity in a number of ways but some examples are as follows: dementia; Alzheimer’s Disease; car accidents; workplace accidents; illnesses; psychiatric illnesses; during medical operations; being in a coma.
Why should I make an Enduring Power of Attorney?
If you have an Enduring Power of Attorney, you have the peace of mind knowing that your affairs will be managed by someone that you choose and trust.
If you do not have an Enduring Power of Attorney, then your family has to apply to the Queensland Civil and Administrative Tribunal to be appointed as your legal Guardian to make those important decisions. If a decision needs to be made urgently, then you may be disadvantaged by any delay in an application having to be made to the Tribunal and waiting for the outcome of any hearing.
Accordingly, by having an Enduring Power of Attorney this will prevent any such delays. It will also give you certainty over who will make those decisions as the Tribunal may appoint someone in your family who you do not necessarily wish to manage your affairs.
Who can be my Attorney?
You should appoint someone who you absolutely trust. The law states your attorney must also:
- be over 18 years old;
- have mental capacity;
- not be a bankrupt (for financial decisions); and
- not be your health care provider (such as your doctor or nurse) or a paid carer (although someone in receipt of a carer’s allowance from Centrelink would not be excluded).
We would strongly recommend that you appoint more than one person and the second or subsequent persons can act in the event the first person appointed is unable to act. For instance, most husbands and wives appoint each other then if both lose capacity their child or children are appointed. This saves the need to update your Enduring Power of Attorney in the event that your spouse passes away or loses capacity.
Can I limit my Attorney’s powers?
Yes – you can limit your Attorney’s powers. Examples are as follows:
- my Attorney is not to sell my shares in XYZ company;
- my Attorney is not to sell my home;
- should I need to be admitted to a nursing home, my Attorney is to try XYZ nursing home first.
We can discuss any limitation of powers with you.
What if my Attorney does wrong by me?
An Attorney should not be appointed lightly. You need to ensure that the person appointed is trustworthy as they will have access to your finances.
Unfortunately, there are some instances where attorneys do the wrong thing, such as sell property and retain the proceeds or transfer property to themselves for little or no value.
Whilst these “conflict of interest” transactions are legally forbidden, because the attorney has power there is still a possibility for those transactions to take place. Accordingly, you need to assess the risk for your nominated attorney doing the wrong thing with the risk of not appointing an attorney.
If you do appoint an attorney and they do the wrong thing, your other family members can apply to the Tribunal to have that person removed. Legal action can be commenced against an attorney who does the wrong thing to recoup assets which have been stolen or transferred at little to no value.
Can I appoint a professional?
Of course. There are professional organisations that deal with managing people’s affairs, such as the Public Trustee of Queensland and the Adult Guardian.
If you appoint a professional organisation, it is important to understand the fees they charge for this service as this will be payable by you during any period the professional organisation acts for you.
If you are considering appointing a professional organisation, we suggest you contact that organisation for further information.
If you need an Enduring Power of Attorney, do not hesitate to call our law firm on 3345 4388, or drop by one of our offices and speak with the experienced wills/estates solicitors to discuss this further.