Upcoming changes to Enduring Powers of Attorney 02 Feb 2017
As from 16 March 2017, certain changes are being made to the Protection of Person Property Rights Act 1988 ('the PPPR Act'), as well as the accompanying Regulations, which will affect Enduring Powers of Attorney ('EPOA').
Some of these changes affect the making of an EPOA, while others affect how existing and new EPOA's will operate.
This article provides a brief overview of the upcoming changes.
As from the "go-live" date, all new EPOAs will need to be made via new, plain language on-line forms. Previous standard forms will not be able to be used. Existing EPOA's are not however affected by this change.
The forms are designed to be easier to understand and will:
- Be in PDF style;
- Have tick box options;
- Be in an on-line format;
- Include a notes section and glossary;
- Have info sections alongside the left hand side; and
- Include option sections.
Previous changes to Enduring Powers of Attorney brought confusion as to when one solicitor/legal executive/trustee corporation could witness the signature of two people making mutual EPOAs (i.e. a husband and wife appointing each other as their attorney).
A witness was required to be independent of each attorney so, where they had previously acted for both a husband and a wife, this could prevent them witnessing both signatures. This often necessitated the involvement of another law firm resulting in additional time and cost or, in smaller centers, difficulty in getting an EPOA completed.
While some further changes were subsequently made to try and address these issues, there was still uncertainty about what the witnessing requirements meant and how they should be carried out in practice. They were also applied differently across law firms/trustee corporations.
The new changes now mean that one solicitor/legal executive/trustee corporation can witness the signature of both donors (the person making the EPOA) in the case of mutual appointments so long as the witness is satisfied that doing so does not constitute "more than a negligible risk of a conflict of interest". In other words, so long as the interests of the parties making the EPOA (or the witness and the parties) do not conflict or there is only an insignificant risk of any conflict, one witness may act for both.
Currently an attorney (the person who has the right to make decisions in respect to someone's property or care and welfare) must consult, if practicable, the donor and any other person specified in the EPOA.
Likewise, if different attorneys are appointed for property and care and welfare, each must consult the other regularly.
Now any Attorney must also consult any other attorney under the EPOA, as well as any other attorney appointed under another EPOA.
This does not include any "successor attorney" which is an attorney who steps in if an earlier attorney can no longer act (i.e. they die, step down).
This change applies to new and existing EPOAs. If you are currently acting under an EPOA therefore, you will need to ensure that you consult, if practicable, the person who made the EPOA, any person specified by the donor in the EPOA, and all other attorneys, whether they act in respect to the donor's care and welfare or their property or both.
An attorney cannot act under an EPOA which only takes effect when a person loses mental capacity until either a relevant health practitioner has certified, or the Court has determined, that the donor is mentally incapable.
Likewise, an Attorney under a Care and Welfare EPOA, cannot act in respect to a "significant matter" until the same has happened.
Currently a certificate as to mental capacity must be in the prescribed form. As from March 2017, this is changing to a requirement that it must simply contain the prescribed information. This means a particular form does not have to be used so long as it contains certain required information.
Cancelling the appointment of one attorney where there are attorneys with "several" authority
A person may make an EPOA which appoints more than one attorney with what is known as "several" or "joint and several" authority. This means that the attorney can, in theory, act independently of the other attorney(s).
The changes now make it clear that, if the donor cancels the appointment of one of the attorneys while mentally capable of doing so, the EPOA remains in effect so long as there is at least 1 remaining attorney.
Cancelling an EPOA
To cancel an EPOA it is not enough to simply write or state that an EPOA is cancelled (revoked).
The new changes provide that, if a new EPOA states that it revokes an earlier EPOA and both are “of the same kind”, they both have effect until the earlier is revoked by notice (or cancelled under certain conditions specified in the PPPR Act).
Notice means giving a copy of the later EPOA to the earlier Attorney(s). That notice however can be given by someone other than the donor, such as a solicitor or a friend, including down the track in the event that the donor becomes mentally incapable.
This section also applies to EPOAs made before March 2017. If you want to cancel an existing EPOA therefore, you will need to ensure that the new EPOA is given to your previous Attorneys.
"Same kind" means:
- both EPOAs relate to the donor's property or donor's care and welfare; or
- if the earlier EPA relates to the donor's property or the donor's care and welfare or both, the later relates to both.
If you have previously been hesitant to make an EPOA due to time and cost or you simply haven't yet got around to it, it is good time to reconsider. The changes we have outlined are aimed at making it easier to make an EPOA.
If you don't have an EPOA, managing your affairs can be extremely difficult. Family and friends don't have an automatic right to make decisions on your behalf. In most cases, if you want someone else to have authority to handle your affairs you need to arrange that ahead of time. If you become incapacitated without an EPOA in place, your family and/or friends must apply to the Family Court before they can do anything to help with your affairs. This takes time and is considerably more expensive than making an EPOA. It may also provoke family tensions as family members may not always agree on who should be appointed. The Court may also appoint someone who you don't wish to make decisions on your behalf.
If you already have EPOAs, now is also a good time to review them to make sure that they still reflect your wishes. Likewise, if you have been appointed an attorney and there have been changes in your donor's capacity, it may be a timely opportunity to consider seeking a medical certificate.