Essential Advice and Understanding
When we prepare an Enduring Power of Attorney for our clients to sign, we also arrange for them to sign an acknowledgement of their understanding of the essential aspects of the document.
This represents an overview of the information that we want clients to know and to understand:
- An enduring power of attorney is one of the most powerful documents I will ever sign.
- If I lose the mental ability to look after myself, either temporarily or permanently, my financial attorney may have complete control over all my assets and my personal/health attorney may have complete control over my personal and lifestyle matters.
- I am able to appoint one or more attorneys and to decide how they are to operate, alone, jointly or successively. If I appoint multiple attorneys and do not specify how they are to operate then they will be required to operate jointly.
- I can choose when the power of a financial attorney begins;
- immediately on signing the document; or
- at some other future time (which will be set out in the document).
- I am aware that if I appoint a personal/health attorney, their power can only begin when I have lost the mental capacity to make these types of decisions myself.
- I can choose to explain or limit the powers of my attorney(s). However, if I do not specify any limits to the powers, then my attorney(s) will have the maximum power that could be given to them.
- If I choose to explain or limit the powers of my attorney(s), I understand that options include:
- providing a specific power to my attorney(s) to act in transactions where they (or someone associated with them) may receive a benefit. For example, the power to act in a conflict of interest transaction means my attorney(s) may:
- sell my motor vehicle at less than its market value to their friend or relative; or
- use my funds to acquire retirement or nursing home accommodation for myself and my attorney(s) where, at the end of those arrangements, the amount to be paid to me or to my estate will be less than what is invested;
- If my financial attorney works in any occupation that may assist me or my assets, my financial attorney can charge the attorney’s normal fees and outlays for doing so. For example, if I appoint my accountant or solicitor as a financial attorney, and I would expect them to charge their normal fees and outlays for any work they may do in that role, regardless of whether that work is of an accounting or legal nature;
- If I wish, I can authorise my attorney(s) to make gifts on my behalf which I would normally make in my lifetime, not limited to gifts to well-known charities. For example, I might make cash gifts each birthday or Christmas, or on other events to members of my family or specified friends and I would like the continuation of that, provided of course my assets allow for it.
Power of Attorney
- I acknowledge that if my attorney(s) sell any of my assets, that may impact upon specific gifts I might have made under my will and the intended beneficiary(s) may not receive the asset and the intended beneficiary can apply to the Court for compensation from my estate.
- After making an enduring power of attorney:
- If I die, the enduring power of attorney is automatically revoked and my estate will be administered under my will or, if no will, the intestacy rules.
- If I marry or enter a civil partnership, the enduring power of attorney is revoked to the extent that it gives power to someone other than my new husband, wife or civil partner.
- If I divorce or terminate a civil partnership, then the enduring power of attorney is revoked to the extent that it gave power to my divorced spouse or previous civil partner.
- If I enter into a defacto relationship my enduring power of attorney is not automatically revoked and if I wish for my defacto partner to act as my attorney, I must make a new enduring power of attorney.
- If I separate from my defacto partner, my enduring power of attorney is not automatically revoked and he/she may still act as my attorney.
- Any existing enduring power of attorney or advance health directive (an “Enduring Document”), is revoked to the extent that it is inconsistent with this or any later Enduring Document.
- I can revoke the enduring power of attorney at any time if I have the mental capacity to do so.
- If I wish to revoke an attorney(s)’ appointment, there are formal requirements on how I must give notice to an attorney (for example the revocation will usually need to be in writing and in the approved form). If I wish to revoke an attorney’s power in the future I understand I should seek legal advice at that point in time to ensure that the revocation is effective.
- In choosing my attorney(s), I have not been unduly influenced and have come to my own decision.
- It has been explained to me that if I am appointing anyone to be an enduring attorney for either financial or personal/health matters, I should have implicit trust in them, and if I have any reservations, I shouldn’t appoint them at all.
- I am aware that the attorney(s) I appoint will be granted legal powers to conduct my affairs on my behalf and will also be under certain duties imposed by law.
- I am aware that in financial matters, my financial attorney is not strictly liable for everything that is done or not done but has the duty of care, diligence and skill a prudent person engaged in that occupation would expect to exercise.
- If my attorney(s) act outside the limits of the powers or breach a duty imposed on them then I (or if I am deceased, my estate) may claim compensation from my attorney(s). I am aware that the Courts and Tribunals have power to review the actions of attorney(s). I am equally aware that in many cases, there might be only limited assistance for any loss already suffered.
- Any attorney I appoint is free to resign as my attorney by giving me a signed notice. However, if I have impaired capacity for a matter then my attorney may be prevented from resigning as my attorney unless the Court gives leave for my attorney to resign. The Court may decide to appoint a replacement attorney in the resigning attorney’s place.
- I agree that whilst I remain mentally capable, I should regularly review the enduring power of attorney to see whether the attorney(s) continue to be suitable, and whether any special powers continue to be required.
- I have received advice from my solicitor that any communication I have with my solicitor will be treated in the strictest confidence, and I can contact the solicitor at any future time, should I have any queries about the enduring power of attorney. However, if a dispute arises as to my capacity to enter into this enduring power of attorney or a will, then my solicitor may be called to give evidence as to my capacity and my solicitor’s file including file notes will need to be disclosed.
- I have signed this statement as an acknowledgement of the advice I have been given, and my understanding of an enduring power of attorney, and request this statement be kept with my enduring power of attorney.