An Enduring Power of Attorney is a document whereby you appoint a person ‘the Attorney’ to act in your place, in making and carrying out financial and property decisions. The power can come into effect at a time chosen by you, such as immediately, or if a doctor states you are no longer able to manage your own affairs.
An Enduring Power of Attorney is necessary if you lose competency. For instance, you would lose competency if you were in a coma or suffered with dementia. In addition, if you needed to be admitted into a care facility, the facility will stipulate that you need to have one in place.
The downside of not having appointed an Enduring Attorney, is that if you do unexpectedly lose competency, there is no named person that can automatically manage your financial affairs, such as manage your bank accounts, and pay your bills. If a loved one needs to have you placed in a care facility, they will need to use their own funds to pay for this, as they will not be able to access yours. This could be a heavy burden.
If an Enduring Attorney has not been appointed, your loved ones will need to apply to the Tribunal in order to be appointed as your Attorney. This could be a long and costly process. You could have a situation where loved ones are now arguing in the Tribunal as to who should be appointed Enduring Attorney. If the Tribunal does not appoint a family member, then the only alternative may be that the NSW Public Trustee and Guardian is appointed to manage your financial affairs and you will be charged an ongoing fee for this.
An Enduring Power of Attorney can be revoked at any stage, whilst the person still has competency to do so.
If an Enduring Power of Attorney comes into effect because you are no longer capable of looking after yourself, the person you appointed as Attorney will have the power to:
- assume complete authority over your financial affairs; and
- do anything with your property that you would have been able to do had you remained capable.
- The power would be irrevocable without an order of the Court.
It is possible to appoint two Attorneys and direct that they are appointed jointly (which means they must work together), or jointly and severally (which means they can work together or work on their own i.e. a decision can be made by one of them, or by both of them together). It is also worth noting that one Attorney will not be held liable for the wrongdoing of another provided they have not implicated themselves in the wrongdoing.
If Attorneys are appointed jointly it can be decided by you at the outset, whether in the event of one of the Attorney’s death whether the appointment of the other will cease, or whether the remaining Attorney to continue acting in his capacity as Attorney.
Substitute Attorneys can also be chosen if your original Attorney vacates office (i.e. dies, resigns, loses mental capacity, becomes bankrupt or the authority is revoked).
The Attorneys themselves cannot appoint a substitute Attorney unless you give them the power to and an express authorisation to this effect can be drafted into the document.
Please note that an Attorney cannot make medical decisions and the power to do this is granted under an Enduring Power of Guardianship explained below.