An enduring power of attorney (EPA) is a legal document wherein a person appoints another person, who’s usually a trusted person, to act as attorney to make decisions on their behalf, even after they lose their full mental capacity. The scope of what they can decide on would usually involve how to spend the money and administer the property of the person who made and executed the EPA.
It’s called enduring because it continues or endures even though you lose full mental capacity. Anyone who’s above the age of 18 years and has full legal capacity can execute an enduring power of attorney. This is different from when a person willed the properties in their estate to another person by executing a will (you may visit Willed if you’re planning to create one with utmost convenience). It takes effect when the person dies. EPA takes effect during the person’s lifetime.
The phrase ‘full legal capacity’ refers to the ability and capacity of the person granting the authority to fully understand the nature and effect of the legal document they’re executing. They should also be fully aware of what they have in their estate, the sums of money, and extent of their properties to be covered by the EPA.
One of the benefits of an EPA, but also one of its most controversial aspects, is that it continues to be in force even though the person who made and executed it loses full legal capacity, such as when they become insane or senile.
To cancel or revoke an EPA, the person who executed it must have full legal capacity. It should be done in writing. But, if the executor is no longer in possession of full legal capacity, then the affected party has to lodge an application with the State Administrative Tribunal. The latter will decide whether the EPA should be cancelled or revoked.
The attorney granted an EPA can’t make decisions on the personal affairs and lifestyle of the grantor of the EPA. The attorney can only make decisions about what to do with the donor’s property and money.
If you don’t make an enduring power of attorney appoint someone to be your attorney, then the State Civil and Administrative Tribunal (such as Victoria Civil and Administrative Tribunal and Queensland Civil and Administrative Tribunal) will be the one to do so. They can appoint either the public advocate or a trustee company.
It’s important to note that in appointing your attorney, you should select someone you really trust and you’ve proven to be someone who’d genuinely do what’s best for you, and make decisions you would’ve done so yourself, were it not for your lack of capacity. You should choose someone who, in the normal course of events, is most likely to outlive you.
You’re allowed to appoint more than one attorney.
You can specify the extent and limits of what your attorney can decide about. You’re allowed to appoint someone who’ll be in charge of paying your bills and making decisions about your financial affairs; and then appoint another person to have the final say on your personal matters, such as where you’d live when you can’t decide for yourself anymore. You can set limits and you can say when they’ll begin to have such powers or enter upon their appointment.
When you appoint an attorney specifically to deal with your financial affairs, they can do the following:
Prepare your tax returns
Pay your bills
Manage your investments
If you appointed an attorney specifically to deal with your personal or health matters, they can make decisions about where you’ll live, who’ll be permitted to live with you, and what you can do as part of your recreational activities. The attorney for health matters will also be the one to make decisions about medical care for you, including how to respond to the recommendations and prescriptions of doctors who attend to you.
While it’s recommended that you appoint someone you trust as your attorney, there are still instances when those appointed betray the trust bestowed on them, or mismanage the money and property of the person who made the EPA.
There are still ways to hold your attorney accountable should they mismanage your affairs, money, or properties. Whether it was because they’re negligent or they did it on purpose for their own or another person’s benefit, they can be held liable. They can be sued before the State Civil and Administrative Tribunal (CAT). They can even be made to face criminal charges.
In Australia, it’s the public guardian who’s tasked with the responsibility of investigating complaints against an attorney who has mismanaged the money and properties of the person who made and executed the EPA.
There are many stories and cases of friends and even family members who betrayed the trust of the person who executed the EPA, and mismanaged the money or properties entrusted to their care and administration. One of the common cases was they sold the properties and kept the money so they can spend it like their own. Some of them even gave excuses to justify what they did.
Here are some of the stories made up to justify their betrayal:
They don’t need the money. It would be better spent for the expenses and welfare of their grandkids.
That’s what they would’ve wanted if they’re still in the right mind.
They don’t need that much money in their residential care.
The State Civil and Administrative Tribunal doesn’t accept these kinds of excuses to justify an attorney’s betrayal of the trust given by the person who made the EPA. If they do this, the concerned parties can go after them in court to compel them to repay the money that they took for their own benefit.
Trusting someone to look after you is, perhaps, one of the most difficult decisions you’ll make in your lifetime. It’s even harder when you have to choose who to trust with the money you saved up, and the properties you acquired when you’re still strong enough to work and your mind was still well enough to make choices for yourself. You can make an enduring power of attorney if you trust someone enough.