What is an EPA?
An EPA is a legal document allowing you to appoint another person to make financial and property decisions on your behalf.
A person who makes an appointment under an EPA is called the DONOR. A donor can authorise another person or persons to be their ATTORNEY to act for them if they become mentally ill or lose their decision-making ability.
An EPA is different from a normal Power of Attorney, which only remains valid so long as the donor is still capable of making decisions. Under an Enduring Power of Attorney, an Attorney can act even after the donor loses their legal capacity.
What does an EPA authorise my Attorney to do?
An EPA does not authorise your Attorney to do everything on your behalf. It will only authorise them to make decisions about your FINANCIAL and PROPERTY affairs. It is important to remember that an EPA does not cover non-financial decisions – for example decisions regarding your health care or medical treatment.
If you are unsure about the types of decisions that an Attorney can make under an EPA, you should seek legal advice.
Why Should I Make an EPA?
An EPA is necessary to protect your assets and ensure that they are managed by someone you know and trust in the event that you suffer a mental disability.
If you own any property, you should consider making an EPA. A loss of legal capacity can be gradual or sudden, occurring as a result of an accident, injury or through illness or trauma later on in life.
It may not be possible to predict or prevent the onset of mental disability, but by appointing an Attorney under an EPA, you will be safeguarding your interests by putting your financial affairs in the hands of someone you trust.
Who should I appoint as my Attorney?
You can appoint anybody to be your Attorney, including your spouse, partner, children, relatives, friends, lawyer or financial adviser. You can also appoint more than one Attorney, for example where you want your children to act together (or separately) as your Attorneys.
The most important consideration you must make before appointing an Attorney is whether you can trust that person to make decisions about your financial affairs. Ideally, it should be someone who you know will manage your affairs and make decisions in your best interests.
I often tell my clients to consider the following:
If you appoint one of your children to be the attorney, is that child going to put you in the cheapest nursing home or the most expensive. Bear in mind that when you pass away eventually, that child may stand to inherit a more valuable asset if he or she placed you in an “el cheapo” nursing home.
What happens if I don’t make an EPA?
If you lose your ability to make decisions and have not appointed an Attorney under an EPA, the State Administrative Tribunal may appoint an Administrator on your behalf to manage your affairs.
Take note that a state appointed Administrator may not necessarily be someone who you trust to manage your financial matters. It is very important that you consider the need for an EPA to be in place to prevent this possibility from arising.
In most cases, an EPA will be preferable because it gives you the power to appoint someone to be your Attorney. At the end of the day, the time and cost involved in making an EPA will be a small price to pay for your peace of mind.
How do I make an EPA?
For an EPA to be valid, it must comply with the requirements set out in the Guardianship and Administration Act of 1990.
In addition, a person making an EPA must be of sound mind when the EPA is made. If there is any doubt as to the mental state of the donor, a medical opinion should be sought to confirm their legal capacity.
There are standard EPA forms that are available for download on the State Government’s website. As a donor, you can complete an EPA yourself or you can arrange for a lawyer or Trustee Company to prepare the documents for you.
You can also specify in your EPA exactly how you want your Attorneys to carry out their responsibilities. All Attorneys will have obligations under the Guardianship and Administration act and it is open for you to provide special conditions that apply whenever they make decisions for you.
If you are unsure about the legal effect of an EPA or what rights and obligations an Attorney has, you should seek legal advice.
When does my Attorney’s appointment come into effect?
An Attorney appointment can come into effect either immediately after the EPA has been signed, or only once the donor has been declared legally incapable of making decisions.
In your EPA, you must specify whether you want the Attorney to assume power immediately, or whether the appointment will only be valid after the State Administrative Tribunal makes an official declaration that you do not have legal capacity to make your own decisions.
If you appoint an Attorney to act immediately, it is important to remember that your Attorney must act in accordance with your directions whilst you are still legally capable.
An EPA can be revoked at any time, provided that you are still of sound mind at the time you revoke it.
As we get older, we may need to consider arrangements that can protect our assets if we are unable to do so ourselves.
As the population gets older, it is imperative that EPAs be considered as early as possible before it is too late.