Understanding Enduring Powers of Attorney: Kannangara Thomson

It is a common misconception that Enduring Powers of Attorneys (EPAs) are only relevant for ‘old people’. The reality is that a health mishap, medical or accident related, can befall anyone at any age. The fact is that everyone should have these important estate planning tools in place. Having EPAs prepared now means that you get to determine who will represent your interests should you lose mental capacity rather than leaving this to chance in court proceedings.



The other important difference is the cost. At worst, EPAs will cost you a few hundred dollars per document, whereas an application for the appointment of a welfare guardian and/or property managers through the court will cost thousands of dollars.

The process can also become quite prolonged if all family members are not in agreement. If you get the documents right you should not need to redo them for many years to come, whereas court orders need to be renewed at regular intervals, so the expense may be incurred over and again.

Another common misconception is that if we lose mental capacity, our spouse or partner can manage our affairs. That is not the case. This is where the EPA comes in. It’s important to highlight the difference between an EPA and a general power of attorney (GPA). A GPA is a power commonly given to a person during a temporary absence from the country or a temporary physical incapacity. In the event of an unexpected loss of mental capacity, the GPA is revoked and of no further use.

An EPA on the other hand is a power-of-attorney which survives an unexpected loss of capacity for any reason, be it accident, illness or old age. The EPA takes two forms, one for personal care and welfare and another for property. You should not be fooled into thinking that you can do without either form of EPA because, particularly for seniors going into a rest home or retirement village facilities, the operators require residents to have both forms in place.

EPAs are possible because of the Protection of Personal and Property Rights Act 1988. Since the Act was passed into law there have been significant changes on two occasions. The forms are now more than 20 pages long compared to their 1988 predecessors which were two pages long. As a result, the modern forms allow for far more comprehensive documents.

Among the options provided for in the modern forms is the ability to appoint a successor or successors, require your attorney to consult with or provide information to certain specified persons and state whether the power of your attorney relates to all of your welfare or property matters or just certain specified matters.

According to the team at Kannangara Thomson, having EPAs in place is vital but it is equally important that they are well drafted and you get them right first time in order to avoid further expense.

To talk to one of the experienced practitioners at a local law firm about putting EPAs in place, contact Kannangara Thomson on 03 377 4421.




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