An Enduring Power of Attorney (‘EPA’) is a legal arrangement governed by the Protection of Personal and Property Rights Act 1988. It allows for one person (‘the donor’) to authorise another person (‘the attorney’) to act on their behalf. Depending on the donor’s wishes, an EPA can either grant the attorney wide general rights, or rights limited by conditions and restrictions imposed by the donor.
A donor authorises their attorney to act in relation to the donor’s personal care and welfare. This can be either generally or in relation to specific matters, such as medical treatment and selection/admission of the donor into residential care.
A donor authorises their attorney to act in matters concerning the whole, or a specified part, of the donor's property. Unless restricted, this EPA can be used for any ‘property’ of the donor, including borrowing, operation of bank accounts, and almost all financial or property decisions the donor would otherwise make personally.
In recent years EPAs have become subject to much tighter controls. Stringent mandatory requirements are imposed by The Protection of Personal and Property Rights Amendment Act 2007 (‘the Act’), which came into effect on 26 September 2008.
An EPA for property can either
be effective immediately and continue when the donor no longer has mental capacity, or
can become effective only upon the donor’s mental incapacity.
Under a personal care and welfare EPA an attorney cannot act unless the attorney believes on reasonable grounds that the donor is mentally incapable. For more significant matters, certification of mental incapacity from a relevant health practitioner, or determination by a court, is also required before an attorney is able to act.
In all cases there is a presumption that the donor is mentally capable until the contrary is proven.
Witnesses – the effects and implications of the EPA must be explained to the donor by:
a registered legal executive, or
an officer of a trustee corporation independent of the attorney
This person must explain to the donor the scope of authority being handed to their attorney, provide certifications that this has occurred and witness the donor’s signature.
The attorney’s signature cannot be witnessed by the same person who witnesses the donor’s signature, so a separate independent witness is required.
Consultation – changes under the Act also provide a donor with the ability to require their attorney to reasonably consult with, or provide information to, certain people named in their EPA before a decision is made. Despite such discussions, the ultimate decision will be at the attorney’s discretion.
While the Act endeavours to provide donors with greater control over the powers they give to their attorneys, the ultimate decision-making will rest with the attorney. It is therefore critical for a donor to carefully consider who may be a suitable attorney.
If you are considering an EPA, your lawyer will be able to discuss what powers are given to your attorney, and will prepare an EPA to best suit your circumstances.