Often confused with a ‘standard’ or ‘general’ power of attorney (in which someone appoints an individual, or entity, to sign documents on their behalf for a specific purpose) enduring powers of attorney (EPAs) go a few steps further. While an ordinary power of attorney will remain in force for as long as the appointer (or ‘donor’) has mental capacity, EPAs remain effective even when the donor loses such capacity, or is otherwise unable to make decisions for themselves. Therefore EPAs are an important tool to ensure that your property affairs and welfare are looked after in the event you cannot do these yourself.
How do EPAs work?
EPAs come in two different forms: one deals with an individual’s ‘personal care and welfare’ matters (e.g. their medical affairs) while the other relates to one’s ‘property’ (which includes bank accounts, paying bills, and the buying and selling of assets). In both cases, a donor appoints someone to act on their behalf, subject to certain terms and conditions. These can include whether or not an attorney is required to consult with anyone prior to making any decisions, whether an attorney must provide anyone with information regarding decisions after they’ve been made, or the extent to which an attorney is entitled to any personal benefits or compensation out of the donor’s assets.
How many attorneys can I appoint?
When dealing with EPAs for property, multiple attorneys can be appointed (and act) at once. Such appointment can either be joint (meaning that all attorneys must be in agreement prior to any decision being made), several (where each attorney can make decisions independent of one other), or joint and several (which allows attorneys to make decisions either alone, or together, as may be required). When dealing with personal care and welfare EPA’s, however, only one attorney may act at one time, despite multiple attorneys having been appointed. This is to avoid any situations in which a disagreement between attorneys could potentially delay, or halt, a donor from receiving any urgent or life-saving medical treatment.
In addition, donors have the option of appointing ‘successor’ attorneys, if they wish. Successor attorneys essentially step into the role as ‘back-ups’ for the initially appointed attorney, in situations where the initial attorney is unable to continue acting.
Donors also have the ability to appoint a “Trustee Corporation” to act as an attorney, if they’d prefer professional trustee services.
When do EPAs come into effect?
In terms of implementation, EPAs relating to property can come into effect at different times, depending on a particular donor’s preferences. This can be either immediately, at a specific point in time, or when a donor loses their mental capacity. This differs from personal care and welfare EPA’s, which come into force only upon a donor’s mental incapacitation. In cases where an EPA is triggered by a donor’s mental incapacity, a medical professional’s official diagnosis will first be required.
What happens if I don’t have an EPA in place?
In the event of someone becoming incapacitated without a valid EPA in effect, applications for the positions of ‘property manager’ or ‘welfare guardian’ will need to be made to the Family Court, which will then make an order regarding who can act in this regard, and on what basis. Following such appointment, managers and welfare guardians (unlike attorneys under an EPA) are required to report to the Court on an annual basis, and must seek reappointment every three years. Though this process is in place to ensure the continued protection of vulnerable and incapacitated individuals, it unfortunately carries the potential to add further emotional stress and cost to an already difficult situation.
Any further questions?
With all of the above in mind, if you would like to discuss putting in place an arrangement that best suits the interests of both you and your loved ones, please don’t hesitate to get in touch with a member of our LifeLaw team.
