Enduring Power of Attorney
An Enduring Power of Attorney (EPA) gives authority to another person to sign legal documents on his or her behalf. The EPA can give the power to deal with bank accounts, investments, cars, houses, etc. It can give another person power to sign any legal document which the grantor could legally sign. The document is “enduring” because it continues to have legal effect if you lose your mental capacity and are unable to care for your financial affairs.
WHY SHOULD YOU SIGN AN ENDURING POWER OF ATTORNEY?
If you did not sign an EPA and became mentally incapacitated, your nearest relative would have to bring a Court Application to have you declared a Dependent Adult and to be appointed your Trustee. No one could deal with your financial affairs, such as paying bills or selling your house, until they obtain a Court Order. The Court Order appoints a Trustee who will have to file his accounts with the Court and obtain the court’s approval on a regular basis which will be once every two to three years.
This process is expensive since it involves retaining a lawyer, and often an accountant, to prepare the accounting records in a proper fashion. This procedure, however, does provide considerable safeguards in ensuring that your property will be used for your exclusive benefit. If you want to avoid these expenses and have chosen a trusted family member or adviser who can take care of your financial affairs, you should sign an EPA.
WHEN DOES AN EPA COME INTO EFFECT?
An EPA can take immediate effect if you state this and it will also continue if you become mentally incapacitated. Most people state that the EPA will take effect only on them becoming mentally incapacitated and that this event will occur if two medical doctors write letters to this effect. An EPA can be changed or revoked anytime you wish, if you maintain your mental capacity, but it cannot be changed if you have lost your mental capacity.
WHO SHOULD I CHOOSE AS MY “ATTORNEY”?
In the EPA, the Attorney is the person (or persons) you choose to handle your financial affairs. This person is most often a spouse or close family member. The person should know your wishes and you should trust them to make financial decisions that you would have made if you had maintained your mental capacity. You can choose more than one person or a corporate Trustee to act as Attorney, and if the first chosen Attorney is unwilling or unable to act, you can choose an alternate.
In the EPA, you can specify the powers and direction you give to your Attorney. For example, you can state that you want to live in your house as long as possible and be provided with home care, but that if two medical doctors deem it advisable that you not live in your home, then the Attorney will have power to sell the house. You could also put in powers to continue giving Christmas or birthday gifts to grandchildren.