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 person’s advanced age, unforeseen health issues, or unexpected incapacity.
What is Enduring Power of Attorney “EPOA”
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 this, 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 a maximum of 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).
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 onset of 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 your subsequent incapacity. This is not recommended. Doing so imposes an obligation on the attorney to prove to the State Administrative Tribunal (“SAT”) that your 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 those with 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 effect 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.
Enduring Power of Guardianship “EPOG”
An EPOG is a document similar in characteristics to an EPOA. The purpose of an EPOG document is to appoint a person to make healthcare and lifestyle decisions on behalf of the Donor. Without an EPOG the following hierarchy of decision making applies.
Powers of guardianship are used to alter a family member’s priority in the decision making process. They do so by taking members of a particular category or class, and giving them higher priority than someone of another category. It is common for couples to appoint one or two children as guardians and thereby avoid several children having to make decisions. An EPOG is invaluable where children do not get along with one another, or where they reside interstate or overseas. EPOGs are commonly used where “non-immediate family” are given priority over “immediate family.”
An EPOG only comes into force upon the incapacity of the Donor. You may appoint as many Guardians as you want but this is not recommended. You may choose to appoint a “substitute,” or backup guardian/s.
Advanced Health Directive “AHD”
An AHD is a document that allows you to direct medical staff to limit the scope of the medical treatment you wish to receive. These documents are often referred to as “living wills.” They are most commonly used to fetter or limit the discretion of decision making by guardians or next of kin.
An AHD may prevent your death being unnecessarily prolonged by invasive medical treatments. They can prevent families feeling guilty in deciding to discontinue treatment. AHDs prevent trusted family members from “back flipping” on promises made during a Donor’s lifetime to not apply certain medical care. An AHD can limit the opportunity for conflict between family members by taking some of the decision making out of their hands.
To find out how we can help you in matters of Enduring Power of Attorney, contact our experienced estate planning lawyers today.
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