Enduring Powers of Attorney

Contributed by Felicity Child and current to 1 September 2005

A power of attorney is a formal written legal document by which one person (the donor) gives another (the donee) power to represent them or act in their place for certain purposes.

An ordinary power of attorney lapses upon incapacity, that is it ceases to have effect when the person giving the power becomes unable to make decisions for himself or herself.

Events such as an accident, a sudden illness or the onset of dementia may affect a person’s legal capacity to make decisions for himself or herself, or to arrange his or her financial or other affairs. Once a person no longer has legal capacity it is too late to sign a power of attorney. This includes informal arrangements such as nominee arrangements for Centrelink (arrangements whereby someone else has authority to contact and deal with Centrelink on behalf of a person with disability), and “signing authority” at the bank. This can create all sorts of difficulties, especially where property is involved. In order to prepare for such an event it is possible to draw up an enduring power of attorney.

The Guardianship and Administration Act sets out the requirements involved in the creation of a valid enduring power of attorney. For the enduring power to be a valid one it must be signed while the donor still has capacity.

An enduring power of attorney can be made in two ways:

• to come into effect immediately and to continue once the donor loses capacity; or
• to come into effect only on declaration by the Tribunal that the donor has lost capacity.

Which type of power to use will depend on the circumstances of each individual and which best suits his or her requirements. For a valid enduring power of attorney to be created one of these two options should be chosen and the other crossed out of the document. Care should be taken to make sure the choice is clearly marked.

In the case of the second type of power, the Tribunal must make a declaration that the donor lacks legal capacity in order for the power to come into effect. The Tribunal must be satisfied that the donor is unable by reason of mental disability to make reasonable judgments about all or any of his or her estate. Medical evidence to this effect should be provided in support of the application to the Tribunal for such declaration.

WHO CAN BE A DONEE

The enduring power of attorney can be given to anyone whom the donor trusts. This may be a spouse or other family member, a trusted friend, a solicitor, the Public Trustee or a private trustee company. It can be given to one person, to two people who act together, or to two people who act together or separately (jointly and severally).

WHAT FORM IS USED

The Guardianship and Administration Act sets out the form in which the document should be drawn up. The simplest thing to do is to use a standard form which can be obtained from a stationer. Alternatively, the Department of Justice’s website contains an Enduring Power of Attorney kit which can be downloaded free of charge from www.justice.wa.gov.au (click on Guardianship, Administration and Advocacy and then Enduring Power of Attorney).

The enduring power of attorney authorises the donee to do anything in relation to his or her estate that the donor can lawfully do but the donor can impose conditions or restrictions. It must be signed in the presence of two qualified witnesses at the same time. If the witnesses are not qualified witnesses the document will not create a valid enduring power of attorney. Care should be taken to check that the witnesses are qualified by referring to the list available with the kit. Information about this issue can also be obtained from the Office of the Public Advocate. The power must have endorsed on it or attached to it a statement of acceptance signed by the donee. The kit also provides advice regarding execution of an EPA by a person who cannot write and for persons who cannot read or write English.

THE OBLIGATIONS OF A DONEE

The donee must act with reasonable diligence to protect the donor’s interest. If the donee fails to do so, she or he (or they, if more than one is appointed) are liable for any loss suffered by the donor.

The donee must keep accurate records and accounts of all dealings and transactions.

There is a penalty of $2,000 for failing to keep and preserve accurate records.

The donee cannot renounce the power during any period of legal incapacity but can apply to the Tribunal to have the power revoked or to have another donee appointed.

The donee can also apply to the Tribunal for directions as to how the power should be carried out or for clarification of the meaning of terms used.

In making the choice of the donee the donor should be aware that, unlike guardianship or administration orders (which generally require the lodgement of accounts each year by the Administrator with the Public Trustee, and which are reviewed by the Tribunal), there is no such automatic scrutiny of the donee of an Enduring Power of Attorney, except in some limited circumstances where an application for intervention is brought to the Tribunal. In that case, any person who, in the opinion of the Tribunal, has a proper interest can apply for an order requiring the donee to file with the Tribunal a copy of all records and accounts kept by the donee. Such records and accounts can be audited by an auditor appointed by the Tribunal.

APPLICATION FOR INTERVENTION IN EPAS

If there are issues with the management of the estate by a donee, the conduct of a done or scope of the Enduring Power of Attorney, the Tribunal can, on application by a person with a proper interest, intervene in an enduring power of attorney. The type of orders which the Tribunal could make include:

• revoking the enduring power of attorney and appointing an administrator;
• varying the terms of the enduring power of attorney;
• appointing a substitute donee;
• where the donee is the applicant, giving the donee directions;
• specifying how the power is to be exercised.

Information on how to make an application for intervention (together with the requisite form) is available from the Tribunal or can be downloaded from the Department of Justice website : www.justice.wa.gov.au.

RECOGNITION OF ‘FOREIGN’ EPAS

The Tribunal can make orders recognising an EPA created under the laws of another state, territory or country, where it is satisfied that the power of attorney created corresponds sufficiently to an EPA created under the WA legislation. The donee needs to apply to the Tribunal for an order recognising the EPA.

“LIVING WILL”

There is no existing arrangement in Western Australia by which a person can plan in advance for personal health care or medical treatment decisions. In some places, such planning documents are called living wills. It is not possible to give such powers under an enduring power of attorney. In Western Australia at present the only way of ensuring that your wishes are known about such matters is to discuss them with family, friends and your doctor. See further in HEALTH CONSUMERS’ RIGHTS .

REGISTRATION AT DEPARTMENT OF LAND INFORMATION

If the donee is going to be involved in any dealing with land which will be recorded at the Department of Land Information (DLI), the enduring power of attorney must be registered or the dealing handled by the donee will not be valid. There is a registration fee of $79.00.

To register an enduring power there must be compliance with DLI’s requirements: the power must not be older than 3 months, otherwise it is necessary for the donee to sign a statutory declaration declaring that the power has not been revoked.

See the contact points at the end of this chapter or LEGAL ASSISTANCE .

IMPORTANT

For an enduring power of attorney to be valid, it is essential that the donor understands what he or she is signing. Particularly in the case of people in the early stages of dementia, it may be necessary to have an opinion as to the donor’s capacity in order to be assured that the document will be valid. A doctor can be a witness to an Enduring Power of Attorney.

Keeping the document safe

The enduring power of attorney should be kept somewhere safe where the donee can locate it when it is needed. This can be in a safety deposit box or anywhere secure.