Last month, I discussed how important a Will can be to ensure your estate is distributed in accordance with your wishes once you die. Three other documents that are really worth considering are:
- an Enduring Power of Attorney (EPA) – the document that deals with your financial and land dealings;
- an Enduring Power of Guardianship (EPG) – the document dealing with your personal matters such as health care and where you will live when you can’t make decisions for yourself; and
- an Advance Health Directive (AHD) – the document used to specify your health wishes (such as do-not-resuscitate) when you are incapable of giving reasonable instructions.
I will discuss each of the above documents separately in coming issues of the Gazette.
An EPA is a formal document which gives another person the authority to make decisions on your behalf regarding financial matters and land dealings in Western Australia. As each State has different EPA requirements, if you own land in other States or move to another State, you should consider signing an EPA which meets that particular State’s requirements.
An EPA is a really useful document should you ever become mentally incapacitated or if you are absent for extended periods of time (such as overseas travel or for FIFO workers), as the EPA enables you to specify who is to be in control of your financial affairs. It can also be a really useful document during times of physical incapacity such as a lengthy recovery from surgery.
The person or people you appoint to act for you under your EPA are called “Attorneys”. You can appoint up to two Attorneys to act for you at a time. You can also nominate one or two substitute Attorneys to replace the original Attorneys should they not be able to take on (or continue) the role when needed.
Depending on your particular situation, you could appoint a partner, family member, adult child, family friend, accountant or other professional to act as your Attorney. Considering the importance of the position you are giving to them, it is important that your Attorneys are people that you can really trust. Your Attorney must be at least 18 years of age, have full legal capacity when you make the EPA and not have been declared bankrupt.
If you nominate more than one Attorney, you can specify they act “jointly” or “jointly and severally”. “Jointly” means they must act together. If they can’t agree, the act doesn’t proceed. This can be a really good check-and-balance on your Attorneys to make sure that they make proper decisions in your best interests. It can also give them the assurance of a second opinion with the other Attorney when making any decisions for you. “Jointly and severally” means that the Attorneys can act together or can act on their own. This can be helpful where your Attorneys require flexibility.
Your EPA can be made to come into effect immediately upon signing or only once you have been declared mentally incapacitated. An immediate EPA can be helpful for those who work away for long periods of time, whereas an incapacity-only EPA gives you the reassurance of having an EPA in place for when it’s needed, but also doesn’t allow your Attorneys to make decisions for you whilst you are capable of making your own decisions.
It is also important to remember that the EPA comes to an end when you die. It is not uncommon to find that Attorneys are still relying on the power that comes from the EPA after the person who signed the EPA (the Donor) has died. This is improper. Once you die, the EPA immediately ends and your Will, if you have one, comes into effect.
You can use kits to draw up your own EPA. If you decide to do this, you are at risk that if the EPA isn’t properly prepared, the document may be invalid and not work when you actually need it. An improperly prepared EPA may even result in circumstances which are not what you had envisaged when you signed the EPA. It is recommended that you have an EPA prepared by an experienced lawyer to give you peace of mind that your nominated Attorneys won’t have unnecessary problems looking after your financial affairs.
It is important to remember that it is when you lose capacity that you really need an EPA and it is at that time, that you will no longer have the ability to make one. However you decide to have your EPA prepared, if you decide that it’s a document you should have, then it’s important that you actually get onto it and get one EPA prepared and signed.