What is an Enduring Power of Attorney and what does it actually do?
Enduring Powers of Attorney were first introduced in New Zealand in 1988, and they have made a big difference to the way we approach elder care – for the better! By having these in place it allows other people to make decisions on your behalf.
Why is it called an “Enduring” Power of Attorney?
They are called “enduring” powers of attorney because they continue to have effect even after a person loses mental capacity. This is the very time when people need care.
Do I need Enduring Powers of Attorney?
For most people the answer will be a simple “YES”.
It is always good to have your affairs in order and to have proper arrangements for the future. Enduring Powers of Attorney give you control over who will look after you and how your affairs could be managed. It’s all about peace of mind.
Enduring Powers of Attorney assume more importance today because organisations have burgeoning legal concerns about respecting privacy. You do not ever want your “privacy” getting in the way of the right people being informed and listened to.
Another reason for having Enduring Powers of Attorney is that this gives your family a focal point for decision making. We are often asked about whether other family members can be consulted, and of course they can. But it is important to have someone to act as the decision maker too.
What kind of decisions could be made on my behalf?
There are two types of Enduring Powers of Attorney, and most people have both.
One type is for Personal Care and Welfare – Your attorney can make decisions about your welfare, care and wellbeing if you lose mental capacity. The most common decisions relate to living arrangements and health care treatment. The other type is for Property – Your attorney can look after your property and finances. Commonly this involves managing bank accounts, paying bills, and committing to a suitable residence for you. You can decide whether you would like your attorney to have immediate power or only if you lose mental capacity.
How many attorneys can I have?
You may only appoint one attorney to act at any one time for Personal Care and Welfare. However you can appoint as many successor attorneys as you wish.
For Property, you can appoint any number of attorneys and successor attorneys. If you appoint more than one attorney you can also instruct that they have to act together.
There are some matters that you attorney cannot decide for you, for example they cannot make decisions for you on marriage or divorce, or consent to you being part of a medical experiment.
Who should I appoint as my Attorney?
Your attorney should be someone you can trust, someone who understands you, and someone you know will act upon your best interests and wishes.
If you are married or have a partner, it is permissible to choose each other, and most people do that. Otherwise you can choose a family member or a close friend.
When should I make an EPOA?
Most people make Enduring Powers of Attorney nowadays when they see us about making a Will. That begs the question, when should I make a Will. Any time is a good time for both, and the sooner the better!
What happens if I don’t make Enduring Powers of Attorney and I can’t manage my own affairs?
Someone may have to apply to the Family Court on your behalf. If this is needed, a welfare guardian and/or property manager will be appointed by the Judge.
The biggest issue with not having Enduring Powers of Attorney is creating avoidable stress for family members or loved ones trying to look after you. Moreover, applying to the Family Court can be a very costly exercise, and it takes TIME.
While you wait for a court order to come through it is difficult for anyone to act. Even simple tasks like paying your bills can become a headache.
What other matters do I need to ensure my personal affairs are in order?
The usual things that people review are Wills, Enduring Powers of Attorney, and any Trust documentation.
An asset planning issue could be whether there is any possible claim against your estate. Another concern for many people, especially as they age, is eligibility for rest home care subsidies.
If you are married or in a relationship it is often a good idea to consider the combined effect of both your Wills, particularly where one or both of you are in a second relationship.
Some couples choose to enter into contracting out agreements. Such agreements obviously set out what happens in the event of a relationship breakdown. Furthermore, they can impact significantly on what happens when each person dies.
For anyone looking at their personal affairs it is important to address any potential clashes of interest between family members. Family trusts often play a role in helping parents preserve assets for their children.
If you control a family trust, you can and should review what will occur on your death. One of the issues is who the trustees will be and how they will be chosen. Another question is whether the trustees who come after you have enough of an understanding to administer the trust. Most settlors will leave a memorandum of wishes, and documents of that kind should be reviewed from time to time.
What is the cost?
We are most often instructed to carry out a general review of people’s personal affairs. This typically involves spending up to an hour or more meeting with the client, ascertaining what is required, and looking at what has changed since their last review. Sometimes nothing is required, sometimes only a “tweak” is required and other times the client may need a complete overhaul. We normally endeavour to estimate or fix a price at the first interview, or as soon as we have the required information. We don’t do free consultations, but if a client does not wish to proceed with a personal review we don’t charge.
The isolated cost of preparing and advising a person as he or she signs up Enduring Powers of Attorney for both Property and for Personal Care and Welfare is about $520.00 plus GST (and minor disbursements) for one person and approx. $780.00 plus GST (and minor disbursements) for a couple.
For further information, or to make an appointment please contact Sandy Lauder or call on 03 477 8080.