Enduring powers of attorney are special because they are effective if the donor becomes incompetent to manage his or her property affairs or loses the capacity to make and communicate decisions in relation to his or her own personal care and welfare, whereas general (non-enduring) powers of attorney are automatically revoked if the donor ceases to be competent or loses mental capacity.
The role of an attorney appointed under an enduring power of attorney (“EPA”) is therefore significant and not to be taken lightly or abused.
The Protection of Personal and Property Rights Act 1988 (the “Act”) sets out the powers, responsibilities and duties of attorneys appointed under an EPA.
If a donor of an EPA in relation to property becomes mentally incapable, the attorney must:
- Use the donor’s property in the promotion and protection of the donor’s best interests; and
- At all times encourage the donor to develop his or her competence to manage his or her own property affairs.
If a donor of an EPA in relation to personal care and welfare becomes mentally incapable, the attorney must:
- Promote and protect the welfare and best interests of the donor; and
- Encourage the donor to develop and exercise his or her decision-making capacity and communication of decisions; and
- Encourage the donor to act on his or her own behalf as much as possible; and
- Seek to ensure that the donor can be involved in the community as much as possible; and
- Consider the financial implications of any decision the attorney makes in respect of the donor’s property.
A property attorney must keep records of all financial transactions entered into by the attorney while the donor is mentally incapable. Failure to do this is an offence and may result in a conviction and a fine of up to $1,000.00.
If the donor has specified in the EPA that the attorney must provide information to other people on request, the attorney is bound to do that.
The attorney has a duty to consult with the donor at all times, and, if there is a requirement written into the EPA, the attorney must also consult with any people specified in the EPA about the decisions the attorney makes.
If different people are appointed to be attorneys for property and personal care and welfare, then those attorneys must consult with each other.
An attorney may recover out-of-pocket expenses reasonably incurred while acting as attorney, and a professional attorney may charge for professional fees and expenses reasonably incurred, but otherwise, while a donor is mentally incapable, an attorney cannot act to his or her own benefit or recover any expenses from the donor’s property unless the EPA specifically allows that, or a court authorises it.
Certification of Mental Incapacity
If an EPA depends upon the donor being mentally incapable before it becomes effective, an attorney may not act unless a relevant health practitioner has certified in writing, or a court has determined, that the donor is mentally incapable. The health practitioner may be the donor’s GP or a specialist in that particular area of medical or psychiatric practice.
Review of an Attorney’s Decisions
The Act provides for review by the court of an attorney’s decisions while a donor is mentally incapable if there are concerns about the legality of the attorney’s decisions.
Application for review can be made by:
- The donor of the EPA
- A relative or other attorney of the donor
- A social worker
- A medical practitioner
- A trustee corporation, eg Public Trust or Guardian Trust
- The principal manager of a hospital or care facility where the donor is a patient or resident
- A welfare guardian who has been appointed for the donor
- A person authorised or contracted by the government to provide elder abuse and neglect prevention services
- Any other person, with leave of the court
The court can revoke the appointment of an attorney if it finds that the attorney is not acting or has not acted in the best interests of the donor and has failed to comply with the attorney’s obligations.
How Does an Attorney “Resign” from the Role?
If an attorney does not want to continue to act as attorney, the attorney can disclaim the power by giving written notice to the donor while the donor is mentally capable.
If the donor has become mentally incapable, the attorney must file a notice in court stating that:
- The attorney considers it in the best interests of the donor that a welfare guardian and/or property manager be appointed; or
- That it is not necessary to appoint a welfare guardian and/or property manager, and the reasons why.
The responsibilities and duties of attorneys appointed under EPAs can be onerous.
There is no requirement for attorneys to be legally advised before signing EPAs, but they may not fully appreciate what they are committing themselves to when accepting an invitation to be appointed.
We recommend that anyone who has been asked to be an attorney under an EPA takes the time to read carefully the notes in the EPA forms and become fully informed about the role before accepting.
This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.