1 July 2009
Enduring Powers of Attorney – Law Change
A Power of Attorney is a legal arrangement whereby you (the donor) appoint another person to act on your behalf.
Enduring Powers of Attorney are distinctive as they continue to operate, or only comes into effect, should you become mentally incapable.
There are two types of Enduring Power of Attorney, one for your money and property affairs and the other for your personal care and welfare.
- A Property Enduring Power of Attorney appoints an attorney to manage and make decisions about your property affairs.
- A Personal Care and Welfare Enduring Power of Attorney appoints an attorney to make decisions about your personal care and welfare on your behalf.
A change in law has provided extra protection in Enduring Powers of Attorney when the Protection of Personal and Property Rights Amendment Act 2007 came into force on 26 September 2008.
Key changes to the Act include:
- a clearer definition of mental incapacity in relation to personal care and welfare enduring powers of attorney
- strengthened witnessing requirements when setting up an enduring power of attorney
- new duties on solicitors to consult with donors and act in donors’ interests as well as a restricted ability for solicitor to benefit themselves or people other than the donor.
A new section was added to the Act, focusing on Enduring Power of Attorneys witnessing requirements. Its states that the donor making the power of attorney must have the contents of the document explained to them by a solicitor or related professional.
The implication of this change means that the person or people you appoint as your attorneys will also have to sign, but they cannot have the same witness as you.
This requirement for independent legal advice gives protection for people setting up Enduring Power of Attorney, particularly for the frail or the elderly into signing.
If you already have an Enduring Power of Attorney in place this law change does not affect you. However should you have any concerns then, it may be an appropriate time to review your Enduring Power of Attorney documents.
This law change impacts positively on all parties involved:
- The donor making the enduring powers of attorney is better informed.
- The attorney granted the power to act on the donor’s behalf is more accountable.
I hope that this article illustrates the impact of this law change.