Enduring Powers of Attorney

Contributed by Katie Binstock, McInnes Wilson Lawyers and current to March 2018

An Enduring Power of Attorney is a legal document by which a person (the Principal) appoints another person or people (the Attorney) to act on their behalf or to make decisions for them if they lose capacity to make decisions for themselves.

Enduring Powers of Attorney are different from General Powers of Attorney. General Powers of Attorney only give the Attorney the power to act on the Principal’s behalf as directed while the Principal has capacity. In contrast, Enduring Powers of Attorney endure a loss of decision-making capacity.

General Powers of Attorney and Enduring Powers of Attorney are governed by the Powers of Attorney Act 2006 (ACT).

General and Enduring Powers of Attorney must use the form approved by the ACT Legislative Assembly. The most recent Enduring Power of Attorney form was updated on 8 March 2017. The General Power of Attorney form has not been updated since May 2007.

Enduring Powers of Attorney must be witnessed by two adults (who are not appointed as Attorneys). One witness must be a person authorised to witness the signing of a statutory declaration. The witnesses are effectively confirming that the Principal understands the nature and the effect of the document and has the mental capacity to decide to sign it.

Attorneys are required to sign the document to accept their appointment. Their signatures are not required to be witnessed by anyone. Attorneys can opt to take legal advice on their obligations under the document.

Who can be appointed as an Attorney and how are they appointed?

A Principal can appoint one or more people to act as their Attorney. An Attorney must be over the age of 18. A person who is bankrupt cannot be appointed in relation to property and financial decisions.

A Principal can also appoint different people as Attorneys for different types of decisions.

A Principal can also appoint a substitute Attorney (or Attorneys) to act if the primary Attorney is unable or unwilling to act. This is commonly used by couples who appoint each other as their primary Attorney and then their children as their substitute Attorneys.

It is always best to choose an Attorney who is trustworthy and who will respect the Principal’s wishes. Often people appoint family members and close friends.

Attorneys can be appointed together, separately or together and separately.

If more than one person is appointed, the Enduring Power of Attorney must specify how decisions are to be made. That will be either together, requiring Attorneys to make unanimous decisions, or separately, in which case Attorneys can make decisions independently.

If Attorneys are appointed together they must all act jointly at all times. This provides accountability and scrutiny between Attorneys but may be impractical or inconvenient if Attorneys live interstate or overseas.

If Attorneys are appointed separately they do not need to act together and can separately make decisions and sign documents. This may be convenient, as only one Attorney needs to sign documents and Attorneys can allocate tasks between themselves. This may put the Principal at a disadvantage because each Attorney can act unilaterally with limited accountability. If the Attorneys do not cooperate they may make conflicting decisions which may require external intervention to resolve.

The Principal can elect whether to allow their Attorneys to delegate their power to someone else who is not appointed as a primary or a substitute Attorney. The Principal can give the power to delegate generally or name people who they are happy with their Attorneys delegating their power to.

Types of decisions Attorneys can make and when they can start acting

An Attorney can be given the power to make decisions in relation to:

• property and finances (see section 10 of the Powers of Attorney Act 2006 (ACT) for the types of decisions);
• personal care (including deciding where the Principal lives) (see section 11 of the Powers of Attorney Act 2006 (ACT) for the types of decisions);
• health care (including refusing or requiring medical and dental treatment) (see section 12 of the Powers of Attorney Act 2006 (ACT) for the types of decisions); and/or
• medical research matters (see section 12A of the Powers of Attorney Act 2006 (ACT) for the types of decisions).

If an Attorney is dealing with real property (buying or selling land) then the Power of Attorney must be registered with Access Canberra. More information is available on the Access Canberra Website.

People should consult lawyers when making Enduring Powers of Attorney. Lawyers can give advice as to whether the Attorney’s power should be increased or restricted, for example:

• when the power should commence;
• whether the Attorneys should be required to report back to each other, say, monthly on all transactions;
• whether any assets should be excluded or restricted;
• whether the Attorney should be able to deal with the Principal’s superannuation;
• whether the Attorney should be authorised to use the Principal’s money for someone else’s benefit;
• whether the Attorney should be able to obtain a benefit or act in a transaction where their interests conflict with the Principal;
• whether the Attorney should be able to pay their reasonable living expenses;
• whether any specific medical directions should be inserted regarding withdrawal of futile treatment or life support, organ donation, blood transfusions; or
• whether any specific personal directions should be inserted about where the Principal lives and/or who they have contact with.

If you do not have a lawyer, the ACT Law Society can recommend lawyers who regularly practise in this area.

The Enduring Power of Attorney will specify when the Attorney’s power to deal with property and financial matters begins. It will either commence once the Principal has ‘impaired decision-making capacity’, on the happening of a specific event or immediately (once the Attorney signs the document). If the power is immediate then the Enduring Power of Attorney operates like a General Power of Attorney and the Attorney can only act as directed, while the Principal has the capacity to make decisions about their property and finances. If the Principal later loses capacity then the Attorney can make decisions for them in relation to property and financial matters.

The power to make personal care, health care and medical research decisions can only commence if the Principal has impaired decision-making capacity.

The power to make decisions under an Enduring Power of Attorney will stop if the Enduring Power of Attorney is revoked by the Principal, by operation of the Law or by the ACT Civil and Administrative Tribunal. An Enduring Power of Attorney is also revoked if the Principal dies. On the death of the Principal, their executors will start carrying out the terms of their Will and there is no further work for the Attorney to do.

When does a person have ‘impaired decision-making capacity’?

The common law presumption is that all adults have capacity. Therefore, for an Enduring Power of Attorney to be fully operative it needs to be established that the Principal has impaired decision-making capacity.

A person has impaired decision-making capacity if the person ‘cannot make decisions in relation to the person’s affairs or does not understand the nature or effect of the decisions the person makes in relation to the person’s affairs’ (see section 9 Powers of Attorney Act 2006 (ACT).

Capacity is decision specific. A person might, therefore, have capacity to make one decision but not others. For example, they might have capacity to decide how to manage their finances on a day to day basis but not decide whether to enter into more complex financial transactions. A person is not taken to have impaired decision-making capacity only because the person makes unwise decisions (see section 91 Powers of Attorney Act 2006 (ACT).

There is no standard form required to be completed which says when a person has lost capacity. A medical certificate from a General Practitioner stating that the Principal has, or does not have, decision-making capacity either generally or in relation to a particular matter on the day or during the period is usually sufficient. In some cases a report from a psychiatrist, psychologist, neuropsychologist, psychogeriatrician, geriatrician, gerontologist, neurologist or Aged Care Assessment Team may be required.

Lack of capacity may be due to brain injury, intellectual disability, mental illness or neurodegenerative deceases (e.g. Alzheimer’s, dementia).

There a number of red flags which suggest that a person might not have capacity to make a decision:

• a diagnosis which affects capacity;
• memory loss or difficulty with recall;
• ongoing difficulty communicating;
• disorientation and confusion;
• lack of mental flexibility/inability to solve problems with simple calculations;
• being withdrawn or a deterioration in personal presentation or mood;
• lacking motivation;
• anxiousness;
• inability to understand simple questions and respond;
• inability to make decisions;
• inability to pay attention;
• limited ability to interact with the people and professionals (i.e. solicitor); and
• changing solicitors many times over a short period or changing solicitors from a longtime family solicitor for no apparent reason.