December 01 2016
Throughout life, people give you advice: parents, friends, doctors… the list goes on and on. Hindsight can be a tough teacher when we don’t listen, which is why lawyers constantly remind us of the need to get our affairs in order with a Will and a Power of Attorney. No amount of hindsight will help if you haven’t done this… but preparing for the beyond isn’t as hard as you may think.
It isn’t just property owners who need to get their affairs sorted, but if you do have property and assets, and haven’t reviewed your wishes recently, make an appointment with our legal champions today.
The Basics: A Will and an EPA
You work hard to build up your assets over your lifetime, so you should decide what happens to them if you become incapacitated and when you die. If you own property, having a Will and Enduring Powers of Attorney (EPAs) will ensure your wishes can be followed by your family and business colleagues.
We all know the purpose of a Will: to record your wishes as to what happens to your property and assets when you die. Many people don’t have a Will or don’t update it often. When was the last time you updated yours?
We strongly recommend you review your Will every five years, or immediately if there are significant changes to your immediate relationships, such as a marriage or similar.
What happens if you don’t have a Will?
Simply, your property will be distributed in accordance with the Administration Act 1969. Your property will most likely be given to your spouse and immediate family. Families are complex structures, so this may not conform to your wishes. Dying without a Will is also likely to increase the chances of claims made against your estate, which incur significant costs.
Why do I need an EPA?
An EPA allows the person you elect as your attorney to look after your affairs, manage your property and make decisions about your welfare. This is especially important if you’re unable to do this. Your attorney doesn’t have to be your lawyer. Anyone can fill the role: family members, a trusted advisor or a close friend. An EPA differs from a general power of attorney as it allows the attorney to act for you if you become too unwell to make decisions for yourself, i.e. ‘mentally incapable’ in the professional opinion of a health practitioner. There are two kinds of EPA: a property EPA, and a personal care and welfare EPA.
How a property EPA works
A property EPA gives the attorney the power to manage your assets including your property, bank accounts, shares, businesses, debts and so on. You choose between restricting your attorney to deal with specific matters or give them unlimited power. You can also appoint more than one property attorney.
You can also choose to bring your property EPA into effect if you are mentally capable as well as the opposite. This is useful if you need someone to manage your affairs while you’re overseas, or if you don’t want the day-to-day hassle of paying bills and paperwork.
How a personal care and welfare EPA works
A personal care and welfare EPA gives your attorney the power to make decisions about your medical treatment or whether you need special care. Unlike a property EPA, the personal care and welfare EPA only takes effect when you are mentally incapable, and you can only appoint one attorney. However, you can insist that your attorney has a responsibility to consult with other family members, even though they have the power to make final decisions. It’s a good idea to appoint a ‘successor attorney’ to act as a substitute in case your attorney is unwilling or unable to act for any reason.
Who should you ask to be an attorney?
By appointing an attorney, you’re giving someone great power, and as we all know, that comes with great responsibility, so you should choose someone who will act as your superhero. We recommend you give thorough consideration to this and discuss the idea with the person first.
Any attorney must act in your best interests and protect your welfare. While you have mental capacity, you can change attorneys at any time and appoint replacements. All EPAs cease when you die and those powers are assumed by the executors named in your Will.
What happens if you don’t have EPAs?
It can be a costly and lengthy process to appoint an attorney if you are considered mentally incapable. The matter is handled by the Family Court, but that doesn’t mean the court will appoint the person you would have wanted to look after your affairs.
It’s never too early to act...
But it can be too late. If you’re over 18, we recommend you have a Will and EPAs in place. Life is unpredictable, but these two documents will give people certainty about how to handle your affairs.