Changes To Enduring Powers Of Attorney: What Does this Change, And How Does This Affect You?
Enduring Powers of Attorney are often used by individuals in anticipation for a sudden deterioration of mental or physical health. By appointing an Enduring Power of Attorney, the testator has the flexibility to continue to make changes in both their Will and in general Estate Planning despite a lack of mental capacity.
An Enduring Power of Attorney allows you to appoint a person to act in your best interests. More often than not, this person will take care of your financial and legal affairs on your behalf. Once appointed, the person you appoint will sign all documents on your behalf and will effectively ‘stand in your shoes’. Naturally, granting this power to a person has enormous implications for your legal and financial well-being, so it is absolutely crucial that you appoint someone who is trustworthy.
In 2015, a number of amendments were passed that add extra layers of protection for people signing Enduring Powers of Attorney, as well as creating more stringent obligations on appointed persons to act as honestly and beneficially as possible.
The Powers of Attorney Act 2014 (Vic) came into effect on 1 September 2015. As a result of these amendments, however, any unsigned Enduring Powers of Attorney documents drafted prior to this date will be invalid.
So What Do These Amendments Do?
Under the previous regime, an Enduring Power of Attorney and Enduring Guardian (a separate grant used to elect someone to manage your personal affairs) were separate documents. Under the new amendments, however, the two are now merged. This being said, it is still possible to appoint one person to manage your financial and legal affairs and another to manage your personal affairs – as well as any combination of the three.
Another interesting amendment is the option to appoint a number of people and have them reach a consensus through majority. Although this may in practice appear to be an unnecessarily costly thing to do, where an Estate or your affairs involve large sums of money or corporate structures, having a number of voices weighing to reach a decision may prove to be enormously beneficial.
In keeping with the commitment to add extra layers of protection for people signing Enduring Powers of Attorney, there are now a number of new obligations and restrictions placed on appointed people. These include:
- An obligation that an appointed person avoid conflicts of interest.
- The requirement that an appointment be witnessed by two persons, one of which must be authorised to take affidavits (e.g. a police officer, lawyer, pharmacist, registrar, etc.).
- A requirement that an appointed person, if found guilty or convicted of an offence involving dishonesty, must disclose their conviction before being appointed.
- The creation of a criminal offence where an appointed person dishonestly obtains an Enduring Power of Attorney for the purpose of gaining financial advantage for his/herself.
Speak to Your Estate Professional About These Changes to Enduring Powers of Attorney
Given the vast number of changes made to Enduring Powers of Attorney, it is always wise to ‘touch-base’ with your Estate Law Professional if you are considering, or have already signed, an Enduring Power of Attorney. He or she will be able to advise you of any changes that may need to be made to get your Estate plans up to speed and in accordance with these new rules. At Hentys, our experienced lawyers can also provide you with professional assistance in settling estate disputes, and provide expert advice if you wish to defend a will.