What is an enduring power of attorney?

What is an enduring power of attorney?

A “power of attorney,” is a document that allows a person to appoint a third party as their legal representative. Usually, the power is not subject to conditions or restrictions. Notwithstanding conditions or restrictions may be imposed. An attorney is empowered to make legal decisions as if standing in the shoes of the Donor (the person giving the power). The power lasts only during the life of the Donor. A person can only appoint two attorneys to act at any one point in time. The attorneys can act jointly (by consensus decision making) or severally (independently of one another).

People often put in place an estate plan for after their death. They commonly forget to put in place a plan for their lifetime. Prudent estate planners establish a strategy for a persons advanced age, unforeseen health issues, or unexpected incapacity.

An EPOA is created by a Donor when they are of sound mind. Once capacity is lost, the power of attorney continues to have legal force. In other words, it “endures” the Donor’s incapacity.

You cannot sign an EPOA retrospectively after capacity is lost.  If a person has not made an active EPOA during their lifetime, then on the incapacity of that person, problems will arise.

It is possible to have a condition imposed in your EPOA whereby the document only comes into force in the event of incapacity. This is not recommended. Doing so imposes an obligation on the attorney to prove to the State Administrative Tribunal (“SAT”) that capacity has been lost.

Residential property is commonly sold to downsize or pay for aged care. Spouses are often required to sell their husband or wife’s interest in land (held jointly with their now incapable partner). This problem is not unique to the elderly or to dementia sufferers. It is equally applicable to persons injured in serious accidents, people who have terminal illnesses or degenerative disabilities (both physical or intellectual).

The common question asked by real estate agents, conveyancers, lawyers,accountants, financial institutions, social security agencies and the land title’s office (Landgate) is: who is authorised to sign documents required to affect a sale or transfer of land?

The family may be forced to apply to the SAT for an order to become the persons Plenary Administrator. In uncontested matters the problem can be overcome with relative ease. Notwithstanding the SAT’s  user friendly process, applying for an administration order is both time consuming and emotionally stressful. Regrettably, some families dispute who ought to control their parents financial/legal decision making. Tribunal appointed administrators are required to file annual accounts with the Public Trustee. By comparison, a person acting under an EPOA is not required to file accounts.

For an attorney to deal with land transactions the document must be registered at Landgate. To do so the EPOA must meet certain formal requirements.

2020-09-14T08:41:12+00:00 June 22nd, 2020|Uncategorized, Wills and Estate Planning|0 Comments