15 May 2018

The truth about why you need an Enduring Power of Attorney

“I find that the importance of an enduring power of attorney is often overlooked by many simply because they believe that their spouse or next of kin will be able to look after their affairs if they were to lose capacity.  This is not entirely correct.  The truth is, it would be very difficult, if not impossible, for your spouse or other family members to deal with your affairs if they are not appointed as your attorney.

Let’s use the example of Jane and Tom:

  • Jane and Tom are in their mid‑50’s.
  • Tom works full-time as an engineer and Jane works part-time as a sales assistant.
  • Jane and Tom own their family home jointly, worth about $600,000.00.  There is a mortgage over their property for $250,000.00.
  • Tom is involved in a car accident and suffers serious brain injuries.  As a result, Tom is unable to make complex financial or legal decisions for himself and requires care on a full‑time basis.
  • Jane is physically unable to care for Tom on a full-time basis.  She is also unable to cover the mortgage repayments on her wage, and decides that it is best to move Tom into an aged care facility.
  • In order to pay for the facility, Jane has no other option but to sell their family home.
  • Jane contacts a real estate agent to list the property, however the sale of the property comes to a standstill when Jane encounters a problem; Jane and Tom do not have enduring powers of attorneys in place.
  • As Jane is not appointed as Tom’s power of attorney, she is unable to sign the contract for sale or land title transfer documents on Tom’s behalf to effect the sale of the property.

The consequence of not having an enduring power of attorney in place means that an interested party (i.e. family member or friend) would need to make an application to the Queensland Civil and Administrative Tribunal (“QCAT”) to be appointed as the administrator for financial matters and/or guardian for personal and health matters.  So in the scenario above, Jane would need to make this application to have the power to sell their property.  As you can imagine this process is stressful, especially if an urgent appointment is needed, and can be costly.

If no one is willing to take on this responsibility then the Public Trustee and the Public Guardian will be appointed to take control of your finances and personal and health matters.  There is also the risk of these statutory offices being appointed if there is a dispute between family members about who is the most appropriate person(s) to act.

I understand that the thought of losing capacity is a scary topic that no one likes to discuss.  However the reality is, any person can unforeseeably lose their capacity at any time during their life, either permanently or temporarily.  So wouldn’t you prefer to appoint someone who you choose and trust to look after you and your affairs if this situation were to arise?”

For more information, contact our wills and estates lawyer, Bianca Stafford.

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