Many people have heard the phrase “power of attorney” but not everyone knows what is involved and what this important legal document can do for you and your loved ones.
As we get older, it is not uncommon that our children, grandchildren or friends will need to make decisions on our behalf in the event that we become incapacitated through a medical emergency or lose mental capacity. An EPOA makes it easier to manage your affairs.
What is an EPOA?
An enduring power of attorney is a legal document that allows you to appoint a person you trust as your attorney to look after your welfare, property and affairs and make decisions on your behalf if you are unable to do so.
EPOAs are an important legal document for any individual–no matter their age–to provide a sense of security and peace of mind. Age is irrelevant, because no one knows what’s around the corner, which is why we advise all our clients to prepare early with an EPOA.
EPOAs are part of the Protection of Personal and Property Rights Act 1988 and are handled by Carlile Dowling’s property and commercial teams. They’re not something that can be handled informally. The documentation is prescriptive and long, which is why the person you’ve chosen as your power of attorney may wish to take legal advice too. Ideally that person would also understand your personal goals and values so they can act in the spirit and to the letter of your wishes.
Is this simply a Power of Attorney?
People in business may be familiar with an ordinary power of attorney. This can take many forms and is usually a limited authorisation for somebody to manage a specific aspect of your life. The law states that these are automatically revoked if the person who gave the power of attorney loses their mental capacity. Only a properly-created enduring power of attorney can give your loved ones the broad powers they need to manage your affairs on your behalf. Better yet, it will remain effective if you lose your mental capacity.
Why EPOAs benefit everyone
A big benefit of having an EPOA in place is protecting your family from uncertainty about how you want everything managed.
In addition to helping with day-to-day expenses, a power of attorney can be used for financial and tax purposes as well. For example, they could sell assets such as property or shares that you own to help alleviate any financial stress. They can also make sure that you are receiving the care and treatment that you require to get better.
Of course, there are many other circumstances in which an EPOA would be useful. Simply think of what would need to continue uninterrupted if you were incapacitated.
An example of when an Enduring Power of Attorney is beneficial is if an elderly family member lives independently in their own family home and suddenly becomes incapacitated through a medical emergency or loses mental capacity and needs a higher level of care. If this was to occur the attorney appointed under the Enduring Power of Attorney can manage the family member’s affairs. e.g. the attorney can then act on their behalf to sell (if necessary) their family home and use the sale proceeds to ensure that the elderly family member receives the higher level of care required. In the absence of an Enduring Power of Attorney no family member is able to legally manage any of the personal assets of that family member without first obtaining a Court Order.
Doesn’t a will cover me?
You may be wondering why it is important to have an EPOA in place, rather than relying on a will or appointing someone as a trustee for your assets when you die. An EPOA ensures your wishes are carried out while you are alive, and your property can be managed for you and your family’s benefit even if you can’t physically or mentally do so anymore.
What happens if I don’t have an EPOA?
Once you have lost the capacity to sign an EPOA, managing your welfare and affairs, means your loved ones getting a court order. This is a time consuming and expensive process during what is usually a stressful period. Once obtained, court orders only last 3-5 years before they need to be renewed – which is additional time, expense and stress for those managing your welfare and affairs. Also, if you have more than minimal assets, there will be additional annual reporting requirements on the person managing your property. An EPOA avoids all of this and your loved ones will thank you for having one in place.
What do I do if I need an EPOA or court order?
A little planning now will make managing your affairs as stress-free as possible. There is no time like the present to get the ball rolling. If you’re interested in learning more about this process, please contact Jessica or Patrick who can talk you through the steps to get an EPOA set up. If, on the other hand, you have a loved one who has already lost capacity, Megan can assist you with the court process.
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