What is an Enduring Power of Attorney?

Introduction

An Enduring Power of Attorney is a document which confirms the nomination by the "Donor" (the person making the Enduring Power of Attorney) of an "Attorney" to look after either some or all of the financial affairs of the Donor in the event that they become unable to do so themselves.

Despite the meaning of "Attorney" in other countries, for the purposes of this summary, an Attorney is not an advocate/solicitor/legal practitioner. The Donor can in fact appoint their spouse, relative, friend etc to be their Attorney.

An Enduring Power of Attorney should not be confused with a General Power of Attorney. The main difference between the two documents is that an Enduring Power of Attorney continues beyond mental incapacity. For example, if a Donor makes an Enduring Power of Attorney now when they have full mental capacity and subsequently becomes mentally incapable of managing their affairs, the Enduring Power of Attorney will remain valid during the period of the Donor's incapacity and will not be revoked by the deterioration in their mental health.

As an Enduring Power of Attorney has far reaching consequences, it is important to be aware of the consequences of signing such a document.

This summary is intended for guidance only and is not intended to be an all-inclusive guide to the implications of making an Enduring Power of Attorney.

An Enduring Power of Attorney should be drafted by an Advocate who must explain to the Donor and the Attorney not only the characteristics of an Enduring Power of Attorney but also its potential consequences.

Why make an Enduring Power of Attorney?

It is recommended that everyone with family commitments or who owns property should complete an Enduring Power of Attorney.

You should particularly consider making an Enduring Power of Attorney:

• If there is a history of mental illness in the Donor's family;
• If the Donor is planning for their retirement;
• If the Donor is suffering from a debilitating illness or condition;
• If the Donor has suffered from a heart attack, stroke or similar condition; or
• If the Donor is not mobile or otherwise free to manage their affairs.

What are the consequences if I don't make an Enduring Power of Attorney?

If someone becomes mentally incapable of dealing with their affairs without having made an Enduring Power of Attorney, receivers would need to be appointed by the court in order to deal with the Donor's assets, e.g. bank account(s), property etc.

The appointment of a receiver is a costly exercise and would grant no immediate relief to those who are financially dependent upon the Donor (e.g. their children), who would have to wait until a receiver had been appointed by the court.

How long will an Enduring Power of Attorney last?

An Enduring Power of Attorney will last until one of the following events occur:

• the Enduring Power of Attorney is cancelled by the Donor;
• the Donor dies;
• the Donor becomes bankrupt;
• the Enduring Power of Attorney is cancelled by the court.