ENDURING POWER OF ATTORNEY
An Enduring Power of Attorney is a legal document used to appoint another person (an “attorney”) to manage your financial affairs and make financial decisions. You can decide if the Enduring Power of Attorney becomes effective immediately or only in the event that you suffer an incapacity in the future.
You can make an Enduring Power of Attorney if you have LEGAL CAPACITY. If there is a question about your legal (mental) capacity, you may need an opinion from your doctor.
If you do not have an Enduring Power of Attorney and you become unable to make financial decisions at a later stage in your life, your loved ones may need to seek orders from the South Australian Civil and Administrative Tribunal (SACAT).
A Donor (also known as an Appointor) is the person who is ‘donating’ their power, appointing another person to act on their behalf in financial matters
A donee (also known as an Attorney or Appointee) is the person who is receiving the power to act on a person’s behalf. A donee should be a person who you trust completely, as you are entrusting your finances to that person.
Legal / mental capacity is the ability to understand the effect of legal documents, to be able to communicate and make decisions.
Legal / Mental incapacity can result from accident or illness and is defined in the Guardianship and Administration Act 1993 as “the inability of a person to look after his or her own health, safety or welfare or to manage his or her own affairs”.
Ask yourself these questions:
- Who do you trust?
- Does that person have the skills to manage your finances?
- Is that person a good money manager?
- Do you want to appoint more than one person?
- If you appoint more than one person, should they act jointly?
Ask yourself these questions:
- Do you want to limit the type of financial decisions? (e.g. cannot sell house)
- Do you want another person to monitor your attorney? (e.g. accountant or financial adviser to receive financial statements)
- Do you want your attorney to consult with family or friends?
- Do you want your assets or income managed in a certain way?
- Do you want to continue to give gifts or donations?
You need to change your Enduring Power of Attorney if:
- One of more of your attorneys die
- One or more of your attorneys say they are unwilling to act
- Your relationship changes and you no longer trust your attorney and do not want them involved
- You want to change the written instructions or conditions
If you change or revoke your Enduring Power of Attorney – you need to notify anyone who has a copy of that document (e.g. bank, accountant) and anyone who was appointed previously as an attorney.
When the Enduring Power of Attorney document becomes active, the attorney becomes legally responsible to manage your finances. The attorney does not become responsible for your debts.
An Enduring Power of Attorney can become effective immediately or only when a doctor states that you no longer have legal (mental) capacity and can no longer make decisions.
The attorney has an absolute duty to act in your best interests at all times. It is an offence to act otherwise. An attorney who acts improperly can be held personally and criminally liable for losses – the attorney’s house, valuables and income may be at risk.
If a person loses mental / legal capacity and has not made an Enduring Power of Attorney in advance, it will be necessary for an application to be made to the South Australian Civil and Administrative Tribunal (SACAT) for an administrator to be appointed to manage the person’s financial affairs.