As lawyers focussed on ensuring people are in the best possible legal position, we often ask our clients if they have an EPOA. But what exactly is an EPOA and do you really need one?
The short answer is yes, if you’re over 18 you should have an EPOA!
EPOA stands for Enduring Power of Attorney. An EPOA is a vital tool to enable you to prepare for the unknown. It allows you to appoint people you trust to make decisions on your behalf about your personal and health matters and your financial matters.
An EPOA equips the people you have appointed (known as your attorneys) to step into your shoes and make decisions on your behalf. Your attorneys can do most things you can do. Naturally, there are some things they cannot do – such as make a Will for you or consent to you getting married for example.
Your attorneys can make decisions in relation to 2 types of matters: personal and health matters; and financial matters. You can appoint the same attorney to perform the two roles, or you can appoint separate attorneys for the separate roles.
Your personal and health attorneys can only make decisions on your behalf if you do not have the capacity to make those decisions. They might have to make decisions about your personal care (ie. where you might live and support services you need) and about health care (ie. medical treatments and procedures).
Your financial attorneys’ powers begin at the time you specify in the power of attorney. This could be an immediate power (so on the day you sign the document), at a particular time or for a particular activity or only when you do not have capacity to make the decisions yourself.
Your financial attorneys can make decisions which relate to your financial or property matters, including decisions about paying bills, selling or buying property and carrying on your business. If you have investment or business structures in place such as companies, trusts or a self-managed superannuation fund, having validly appointed financial attorneys is vital to your business or investment plan. If you lose capacity and do not have financial attorneys properly authorised to act in relation to your entities, the inability for time critical decisions to be made on your behalf may have a devastating impact on your business or investments.
An attorney can have very wide power over you and your assets, this is why it is so important for you to appoint the people you trust implicitly. Your attorneys must ALWAYS act in your best interest and severe penalties exist for attorneys who use their powers for their own benefit.
So why are we (as lawyers) so hell-bent on making sure you have an EPOA? Of course, we can’t force you to have an EPOA, but it is in our nature to try and prevent problems before they arise. If we are acting for you in another matter, for example your purchase or sale of property, a debt dispute or a family law matter, an EPOA can avoid costly problems if you suddenly lose capacity mid-matter.
An EPOA gives you (and us) peace of mind knowing your affairs will be looked after by someone you trust if you cannot do so yourself.
If you don’t have an EPOA or need to update your existing one, please get in touch with a member of our estate planning team.
For more information please contact a member of our estate planning team at Fox and Thomas.