An enduring power of attorney is an extremely powerful legal document, so it’s not only important to have one but even more important to appoint the right people for the job.
An enduring power of attorney allows you to appoint someone you trust to make legal and financial decisions on your behalf and remains in place should you lose mental capacity. This means your attorney (or attorneys if you appoint more than one person jointly) can step into your shoes and enter into contracts, operate your bank accounts and pay your bills for you. They even have the ability to sell your house or incur debt on your behalf.
It is a position that carries great responsibility and your attorney(s) should always act in your best interests. So, you can imagine the possible problems and difficulties that can ensue if your appointed attorneys don’t get along or can’t agree on important decisions that need to be made. Worse still, what if temptation is too great and they abuse their appointment by accessing your money and assets for their own benefit?
Sadly, there have been many cases where financial abuse and conflict have occurred.
Therefore, you should give great care and consideration when you appoint your attorney(s). If you can foresee conflicting issues are likely to arise amongst your attorney(s), or if there is no one that you can absolutely trust, a reputable, professional trustee company is a good option.
What happens if you don’t have an enduring power of attorney?
If you do not get around to putting an enduring power of attorney in place and suffer a loss of mental capacity, an application would need to be made to the Guardianship Board for a financial administrator to be appointed to act on your behalf.
If the Guardianship Board feels there are no appropriate family members or friends who can be appointed, they would usually appoint the Public Trustee to manage your affairs. Private trustee companies can also be appointed, however, the Public Trustee is usually the Guardianship Board’s default appointment.
If you would like more information about enduring powers of attorney in the context of your financial plans, please contact us today.
Top five tips for preparing your Estate Plan:
1 Get professional advice – consult a solicitor, estate planner or trustee company that is a specialists in estate planning and talk to your other professional advisers about your current situation and what you would hope the outcomes would be.
2 Choice of executor is vital – an important role of the executor is to communicate with the beneficiaries and also distribute the assets according to your wishes (as outlined in your Will). Ensure your executor is someone you can trust and will be reliable in carrying out your wishes.
3 Once prepared, your Will should be kept in a safe place – you should inform your executor(s) or family members where you keep your original Will.
4 Your Will should be reviewed whenever your personal circumstances or structure of asset ownership change – for example in most states and territories marriage or a civil union revokes a Will, in South Australia, marriage revokes a Will unless that Will was prepared in contemplation of marriage.
5 When including an organisation or charity in your Will, it is essential to get the name of the organisation correct – If an organisation is incorrectly described in your Will, it is possible that it may end up not receiving the benefit or there may be significant legal costs incurred before it does.