As we age, we must eventually turn our minds to what happens if because of accident, illness or just plain old age, we can no longer manage our own affairs.
Enter the Protection of Personal and Property Rights Act 1988, which allows us to appoint people we trust to manage our affairs under documents known as Enduring Powers of Attorney. These documents come in two forms, one for personal care and welfare; a second for property matters.
In relation to personal care and welfare, you can only appoint one person at any given time, while in relation to property matters, you can appoint one or more attorneys and can specify whether they can only act jointly, or jointly and severally, meaning any one of them can act as your attorney on his or her own.
An Enduring Power of Attorney in relation to property can be created to also act as a general power of attorney which can be used by your attorney(s) while you have mental capacity. Alternatively, you can choose to set up the Enduring Power of Attorney for property so it only comes into effect if you lose mental capacity. However, an Enduring Power of Attorney in relation to personal care and welfare can only be activated if you have lost mental capacity. You are presumed to be competent unless an assessment by a registered medical practitioner shows otherwise.
Significant changes were made with the passing of the Protection of Personal and Property Rights Amendment Act 2007 and, in 2016, new standardised forms were introduced. The 2007 changes included:
• The ability to appoint a successor attorney, in the event the original attorney is unwilling or unable to act
• The capacity to authorise your attorney to act on certain specified matters or all matters
• The ability to require your attorney to consult with or provide information to specified persons
• The power to authorise your attorney to ask the court to make or amend your will.
If you wish to change your appointed attorney while you have mental capacity, you can revoke the attorney’s appointment at any time. If however, you have lost mental capacity and family or friends are concerned about an attorney’s actions, the only redress is through the courts.
Similarly, if you lose mental capacity and do not have Enduring Powers of Attorney in place, an application may be made to the Family Court for someone to be appointed as your welfare guardian and/or your property manager. This is more expensive, both in time and cost. Adding insult to injury, the process must be repeated after the first three years and every two years thereafter. It is much cheaper to put Enduring Powers of Attorney in place of your own choice while you still have the capacity.
Retirement villages insist on all residents having valid Enduring Powers of Attorney, so if you are contemplating this type of community, it is essential your Enduring Powers of Attorney are in place, up to date and meet your needs.
Enduring Powers of Attorney are one of the most important and valuable estate planning tools available that everyone should have in place, regardless of age, so in the event of an unforeseen loss of capacity, your affairs can be managed by someone you trust. Kannangara Thomson has a specialist senior law team. Contact Brent Selwyn on 03-377 4421 to discuss putting Enduring Powers of Attorney in place.