Ensuring Power of Attorney
Ensuring Power of Attorney appoints a person to make decisions in respect of your welfare and property should you become mentally incapable
Farmer Freddy and Ned have now sorted out which piece of land Freddy is buying. They have cancelled the old agreement and signed a new one. Now Freddy just has to sign the necessary documents to grant the mortgage and to register the transfer and the mortgage.
Freddy heads off to the golf course for a spot of relaxation, when disaster strikes. He's so absorbed in the line of his putt, he doesn't heed the call of "fore!" and gets knocked out by a wayward golf ball.
The next thing he knows, he is waking up in hospital, to the gentle sound of the machine that goes "ping". He pays his lawyer to visit. "What's going on with that piece of land?" asks Freddy. His lawyer explains that settlement isn't for another week. "We can sort it out over the next few days," she explains. "But you really need to finish the will we discussed in August and grant an Enduring Power of Attorney in case this sort of thing happens again."
"Enduring Power of what?" asks Freddy.
Freddy's lawyer explains that an Enduring Power of Attorney (EPA) usually only comes into effect if Freddy becomes mentally incapable (this is different from a Power of Attorney, which iss where you appoint another person to act for you temporarily, say, if you go overseas.)
She explains that there are two types of EPA.
Under a Personal Care and Welfare EPA, Freddy appoints a person as attorney to make decisions about the aspects of his personal care and welfare specified in the EPA. These could be decisions like whether to go into a rest home or what medical treatment to accept. Although only one person can be appointed to be a Personal Care and Welfare Attorney, the Protection of Personal and Property Rights Act allows Freddy to require the attorney to consult with other people (say, other family members) in the exercise of his or her powers as attorney. This EPA can only come into effect when a person becomes mentally incapable.
Under a Property EPA, Freddy could appoint one or more attorneys to make decisions about his property, which could include spending and investment decisions, and decisions about his house and farm. Again, the EPA can set the limits on the attorney's powers.
Unlike the Personal Care and Welfare EPA, Freddy's Property EPA could provide that the attorneys can exercise their powers while Freddy is still mentally capable. However, Freddy is unlikely to want to do that. "But," Freddy asks, "what's to stop my property attorney spending my hard earned money on a new boat?"
Freddy's lawyer explains that the attorney cannot use the EPA for his or her own benefit. Anyway, the EPA can set any limits Freddy likes around the attorney's powers. This makes Freddy feel much better.
The lawyer leaves Freddy to consider what protection he needs in place.
But first, Freddy needs some sustenance. He rings the bell. "Nurse, any chance of a cup of tea?"