An enduring power of attorney (“EPOA”) is one of the most important legal documents that you should have in place. An EPOA appoints a person (or persons) to manage your affairs and make decisions on your behalf. In Queensland, an EPOA can enable an attorney to make decisions about both financial and personal/health matters. However, other jurisdictions like New South Wales require a separate document for personal/health matters.
While an EPOA (at least in respect of financial matters) can start immediately, it is more common that they are expressed to start if the person making the EPOA were to lose the capacity to manage his or her own affairs. This may occur because of an unexpected accident or because of an illness such as dementia.
As suggested by its name, an EPOA gives someone else a lot of power. When making an EPOA, it is important to carefully consider who is the appropriate recipient of this power. Choosing an inappropriate attorney can have dire consequences. As such, we suggest using the following four C’s to assess whether someone is appropriate to act as attorney.
Does the person have the requisite skills and experience to make the sorts of decisions required by the document? For example, if the person is to make financial decisions on your behalf, you should consider whether he or she is good with money. If the person is a gambling addict or a bankrupt, he or she may not be suitable for that role.
On the other hand, just because someone possesses the requisite skills to act as an attorney does not necessarily mean he or she is suitable. Arguably, more important than the person’s competency is his or her character. The person you choose to act as your attorney should be honest and trustworthy. This is important because, while there are tribunals and courts that can review the actions of an attorney, this intervention can sometimes be too late.
In addition to a person’s competency and character, you should also consider whether he or she has the capacity to act as your attorney. In other words, would the person be prevented from acting promptly as attorney because of geography or time commitments? For example, you might wish to appoint as your attorney your trustworthy son who is an accountant but, if he resides in the USA or is a single father to five children, these factors may hinder his ability to act as your attorney.
Finally, the person you appoint must consent to acting as your attorney. This is reflected in the fact that most EPOAs require the attorney to sign an acceptance of his or her appointment before the appointment can become effective. Once you have decided on an appropriate attorney (or attorneys), you should ask the person whether he or she would agree to act as your attorney. If he or she refuses, you will need to appoint someone else.
By turning your mind to these four criteria, you could save you and your loved ones stress down the track once the document becomes activated. If you do not have a valid EPOA in place or you would like to update an existing EPOA, please contact us so we can ensure the proper procedures are followed.