EPAs have in recent years become subject to much tighter controls, with stringent mandatory requirements imposed by The Protection of Personal and Property Rights Amendment Act 2007 (‘the Act’), which came into effect on 26 September 2008.
The two types of EPAs are:
An EPA for property can be immediately effective and continue when the donor no longer has mental capacity, or can become effective only upon the donor’s mental incapacity. However, for a personal care and welfare EPA, an attorney cannot act unless the attorney believes on reasonable grounds that the donor is mentally incapable. For more significant matters, certification of mental incapacity from a relevant health practitioner or determination by a court is also required before an attorney is able to act.
In any event, there is an automatic presumption that the donor is mentally capable until the contrary is proven.
Witnesses: A lawyer, registered legal executive or an officer of a trustee corporation independent of the attorney must explain the effects and implications of the EPA to the donor to ensure he or she fully understands the scope of authority being ceded to their attorney, and provide certifications that this has occurred and witness the donor’s signature.
The attorney’s signature cannot be witnessed by the same person and so a separate independent witness is required. In some circumstances this can be another practitioner in the firm. However, if those circumstances don’t apply it must be an independent solicitor in a different firm.
Consultation: – changes under the Act also provide a donor with the ability to require their attorney to reasonably consult with or provide information to certain people named in an EPA before a decision is made. Despite such discussions, however, the ultimate decision will be at the attorney’s discretion.
While the Act endeavours to provide donors with greater control over the powers they yield to their attorneys, the ultimate decision making will rest with the attorney. It is therefore critical for a donor to carefully consider who may be a suitable attorney. If you are considering an EPA, your lawyer will be able to discuss what powers are given to your attorney, and be able to prepare an EPA to best suit your circumstances.