An Enduring Power of Attorney is a legal document which gives another person or persons the ability to manage and run your affairs in the event that you become mentally incapable of doing so yourself.
Ask yourself what would your family do if they didn't have the power to access bank accounts or manage your business affairs if you were in a car accident and in a coma. Further what would happen to your finances if you became mentally incompetent. An Enduring Power of Attorney allows you to appoint a trusted individual who will have authority to run your affairs while you are mentally incapacitated.
If you do not have an Enduring Power of Attorney, you will have no control over who becomes your trustee and your spouse and/or family may be forced to hire a lawyer to bring a Dependant Adult Application. There could also be a delay factor in appointing such a trustee which could be detrimental to your estate or business interest.
It is my opinion that an Enduring Power of Attorney is an important piece of estate planning and should be considered at the time of drawing up a will.
There are two basic kinds, one which takes effect immediately upon signing and another which takes effect upon you becoming mentally incapacitated. It is likely that you would only consider the enduring power of attorney to become effective upon sickness, but there are a variety of instances where a power of attorney can be used. All powers of attorney are not enduring powers of attorney and all enduring powers of attorney do not come into effect necessarily upon mental incapacity. I recommend that you discuss with your lawyer which power of attorney would best meet your needs. Those needs may change as your circumstances change.
You may designate in your enduring power of attorney a person or persons who can sign a written declaration declaring you to be mentally incapacitated. Once this declaration is signed, the enduring power of attorney takes effect. Obviously, before you give such person or persons the power to determine whether you are mentally incapacitated, you want to make sure that you trust that person to act in your best interests.
If you wish, you may leave your enduring power of attorney silent on this matter and the enduring power of attorney will then take effect only when two medical practitioners declare in writing that you are mentally incapacitated.
The Powers of Attorney Act provides that you must attend before a lawyer, who will sign a certificate of legal advice declaring, among other things, that you gave the enduring power of attorney voluntarily and that you understood what you were signing. The Powers of Attorney Act also prescribes a list of notes which must be reviewed with you by your lawyer.
When you are signing any important legal documents, such as an enduring power of attorney, it makes good sense to consult with your lawyer regardless of whether the Powers of Attorney Act requires it. Your lawyer should review with you the reasons you want an enduring power of attorney and discuss whether your enduring power of attorney should have any special provisions. Your lawyer should also discuss with you the powers your appointed attorney will have.
Section 7(1) of the Powers of Attorney Act provides as follows:
An attorney under an enduring power of attorney has the authority to do on behalf of the donor anything which the donor can lawfully do by an attorney, subject to any conditions or restrictions in the instrument creating the power.
In other words, your attorney will have the authority to do anything that you are legally capable of doing while you are well. For example, the selling of your home, the selling of automobiles, the changing of bank accounts and investment decisions.
Your attorney may also have the authority to take care of your spouse and children's financial needs. This is not to say that your spouse cannot be you attorney.
Section 10 of The Powers of Attorney Act provides a mechanism whereby
any interested party can make application to the court to terminate the
authority of the person appointed as attorney. The Act also makes provision
for allowing people to bring an application to have the accounts of the
person who is appointed as your attorney verified and approved by the court.
Section 13 of the Powers of Attorney Act allows you to revoke in writing an enduring power of attorney, providing that at the time you revoke it, you are mentally capable of understanding the nature and effect of the revocation.
It is automatically revoked and is no longer of any effect.
Please feel free to contact me. I would be happy to discuss with you whether you need an enduring power of attorney. It is my opinion that an enduring power of attorney is a useful aid in estate planning and one which should not be ignored.
