A power of attorney is an authority that a person (the donor) gives to another person or company to act on their behalf.
There are two types of power of attorney:
An ordinary power of attorney is the authority given by one person (the donor) to one or more others to act on the donor’s behalf, either in all matters or only on specific issues stated in the power of attorney (for example, to manage a bank account while the donor is overseas).
An ordinary power of attorney is valid until it expires (if it is for a fixed term) or is cancelled (revoked). In addition, an ordinary power of attorney is only valid while the donor has the mental capacity to make decisions. If the donor loses this capacity (for example, through illness or accident), the ordinary power of attorney is cancelled. This is because under an ordinary power of attorney, the attorney cannot have more power than the donor.
Unlike an ordinary power of attorney, an enduring power of attorney can have effect if the donor is not able to make decisions for themselves, or to communicate those decisions. An enduring power of attorney (sometimes referred to as an EPA) usually comes into force only when a donor has become mentally incapable of managing their own affairs.
Giving someone an enduring power of attorney is a way of making sure that someone trusted will make decisions if the donor becomes unable to make those decisions alone – for example, if they suffer a serious head injury, disease or mental illness.
There are two types of enduring power of attorney:
Note: If someone becomes incapable of managing their own affairs, but has not completed an enduring power of attorney, the Family Court has the power to make orders for that person (see “Court orders when you can’t make decisions for yourself” in this chapter). The court will not make an order unless it is absolutely necessary, and will intervene as little as possible into a person’s affairs.
A great deal of care should be taken when choosing an attorney under an EPA. It is crucial that the attorney is trustworthy and the donor is confident that the attorney will always act in the donor’s best interests. The donor should feel sure that the attorney would make decisions reflecting the donor’s own views.
The attorney should also have the skills to manage the donor’s affairs and, if they’re dealing with property, to keep proper records and accounts.
There are some legal restrictions on who can be appointed as an attorney under an EPA.
Note: In many cases a family member or close friend is appointed as attorney. While it is natural to choose such a person, care should be taken to ensure that the attorney will act in the donor’s best interest.
The law allows the same person to be appointed as attorney for property and for personal care and welfare. However, a donor may choose to appoint different people for each of these roles. The personal skills needed to look after someone’s personal care and welfare are different from those needed to look after someone’s financial affairs, which usually require some business knowledge.
If a person has different attorneys for personal care and welfare and for property, both attorneys are required to consult each other regularly, to ensure that the donor’s interests are not harmed by any breakdown in communication between them.
If a donor has more than one attorney and there is a conflict between them, the personal care and welfare attorney prevails, but either attorney can apply to the Family Court asking for directions.
The property attorney must give the personal care and welfare attorney any financial support that attorney needs to carry out their duties, unless giving that financial support is contrary to the powers the attorney has been given, or if the court has directed otherwise.
Note: The donor cannot give authority to a trustee company to be an enduring attorney for personal care and welfare. If a trustee company (for example, the Public Trust) is the attorney for property, the donor would need to appoint someone else for personal care and welfare.
Note: If an enduring power of attorney was created before 25 September 2008, not all of the following requirements apply. For appointments made before this date, the donor’s signature only has to be witnessed by an independent person and there is no requirement for the donor’s witness to complete and attach a certificate. The new requirements place more responsibility on the donor’s witness.
An enduring power of attorney must be created using a particular form. These forms are set out in regulations under the 3PR Act and are available from lawyers, the Public Trust and other trustee companies and online at Office of Senior Citizens.
In order for an enduring power of attorney to be valid:
Note: Despite the requirement for independent witnesses, if two people appoint each other as attorneys, they can use witnesses who work in the same firm as each other.
A donor is not legally required to have a lawyer: their signature to the EPA can be witnessed by either a lawyer, a qualified legal executive, or a representative from a trustee corporation.
However, there are a number of advantages to being fully and independently advised by a lawyer with experience in this area. A lawyer can advise a donor about what terms they might want to include in the EPA, can ensure that the EPA properly expresses a donor’s wishes, and can explain to a donor the legal effect and consequences of the EPA.
Certain issues must be dealt with in an EPA, such as whether a property attorney can act only if the donor becomes mentally incapable or whether they can start acting for the donor immediately, while they still have mental capacity.
An EPA can also include a number of optional provisions:
Note: You could also consider making an “advance directive” about future medical treatment. This means instructions about the kinds of treatment you do or don’t want to receive if you lose the ability to give informed consent (for example, if you’re in a coma after a car accident). For information about advance directives (sometimes also called “living wills”), see the chapter “Health and disability”, under “The Code of Health and Disability Services Consumers’ Rights” (Right 7).
An enduring power of attorney for personal care and welfare comes into effect only after the donor becomes mentally incapable (see below in this section, “Mental incapacity”).
An attorney must not act in respect of a significant matter relating to the donor’s personal care and welfare unless:
In respect of any other matter relating to the donor’s personal care and welfare, the attorney must not act unless they believe on reasonable grounds that the donor is mentally incapable.
Note: A significant matter relating to the donor’s personal care and welfare is a matter that has, or is likely to have, a significant effect on the donor’s health, well-being, or enjoyment of life (for example, entering residential care, or undergoing a major medical procedure).
The enduring power of attorney can be general, or can relate to only certain matters. If the donor wants it to relate only to certain areas, these must be specified in the EPA.
Even if a personal care and welfare EPA gives an attorney general authority to decide all issues, the 3PR Act sets out some types of decisions that the attorney cannot legally make for the donor.
An attorney for personal care and welfare cannot:
The person or trustee company appointed as a property attorney should be told by the donor: what the donor owns, where a donor’s possessions and documents are kept, and what the donor’s exact wishes are.
The donor should:
Note: If the donor specifies that the enduring power of attorney will only take effect when they become mentally incapable, the attorney must not act in relation to the donor’s property unless a relevant health practitioner has certified, or the court has determined, that the donor is mentally incapable.
It is up to the donor to decide how much power the property attorney will have. The attorney can have a general power (for example, to act generally in all matters relating to the donor’s property), or a specific power (for example, over a car).
The donor can also impose specific conditions and restrictions on the power of attorney (for example, limiting a power to borrow only up to a certain limit).
If the donor doesn’t expressly provide otherwise:
Yes. The Family Court has wide powers of jurisdiction, including the power to monitor an attorney’s performance, and, if necessary, to vary the terms of the enduring power of attorney.
The Family Court can be asked to decide any disputed issues about an enduring power of attorney and its effect, or about how an attorney has been carrying out their role. Among other things, a person can ask the court specifically to:
Any of the following people can apply to the Family Court to review any decision made by an attorney acting while the donor is, or was, mentally incapable:
Yes. An attorney can apply to the Family Court for directions about how to exercise their powers. The attorney might do this if they are facing some difficulty carrying out some of the donor’s instructions.
Unlike an ordinary power of attorney, an enduring power of attorney can have effect when the donor becomes mentally incapable – that is, they become unable to make decisions or communicate those decisions.
An enduring power of attorney for property can begin before or after the donor becomes incapable, according to the terms of the EPA. In contrast, an enduring power of attorney for personal care and welfare only comes into effect when the donor loses mental capacity.
The meaning of “mentally incapable” depends on whether the context is personal care and welfare or property.
The decision about whether a donor is mentally incapable is made by a relevant health practitioner, who is qualified to assess mental capacity, or by the court.
The donor may specify in the enduring power of attorney that the health practitioner should have a specific field of practice (such as a doctor specialising in elderly care), but only if that field of practice includes assessing a person’s mental capacity.
An assessment of mental capacity will include looking at:
The law assumes that someone is competent to manage their own property and to make and understand decisions about their personal care and welfare, until it is proven otherwise.
A person is not presumed to be mentally incapable simply because someone has arranged for their mental capacity to be assessed. A person must not be presumed to lack mental capacity just because they:
A donor who has been, but is no longer, mentally incapable may suspend the attorney’s authority to act under the enduring power of attorney by giving him or her written notice. However, the suspension does not revoke (cancel) the enduring power of attorney.
The attorney whose authority is suspended may only act under the enduring power of attorney if a relevant health practitioner has certified, or the court has determined, that the donor has again become mentally incapable.
The donor also has the right to revoke the enduring power of attorney at any time while the donor is mentally capable (see below, “Can a donor change their mind about giving someone power of attorney?”).
Yes. An enduring power of attorney can be changed, varied or revoked (cancelled) at any time while the donor is still mentally capable. Changes to an enduring power of attorney should be done in writing, in a document that is signed and witnessed in the same way that the original power of attorney was witnessed (see in this section, “Making an enduring power of attorney / Legal requirements for making a valid enduring power of attorney”). However, it does not need to be witnessed by the same person as on the first occasion.
Different procedures apply for changing, cancelling and replacing an enduring power of attorney, and the donor should get legal advice as to which of these procedures best suits their situation.
Note: Any bank or other agency likely to be affected should be notified that the power of attorney has been revoked.
An enduring power of attorney ceases to have effect when:
The court must cancel the attorney’s appointment if it is satisfied that:
The Family Court may, but does not have to, cancel the attorney’s appointment if it is satisfied that: