What Does an Enduring Power of Attorney Do?

17 Sept

Most people know they should probably have an Enduring Power of Attorney (“EPA”). Far fewer people know what it does.

An Enduring Power of Attorney allows you to appoint someone you trust to make certain personal, health, and/or financial decisions for you if you are unable to make those decisions yourself.

Depending on how your EPA is prepared, your attorney might be able to make decisions about:

your finances
your property
your legal and financial affairs
where you live
the support and services you receive
your healthcare.

It can be one of the most important parts of your estate plan because it operates to protect you during your lifetime, not after your death.

Your Will deals with what happens to your estate after you die. Your EPA helps deal with what happens if you are alive but can't make decisions for yourself.

Quick Answer

What does an Enduring Power of Attorney do?

An Enduring Power of Attorney allows you to appoint one or more people to make certain decisions for you if you lose decision-making capacity.

Depending on the powers you give them, your attorney may be able to make decisions about your:

finances
property
legal and financial affairs
living arrangements
personal matters
healthcare.

You can choose what types of decisions your attorney can make and can include conditions or instructions about how those powers are exercised.

An EPA can continue to operate after you lose capacity. That's what makes it "enduring".

What Is an Enduring Power of Attorney?

An Enduring Power of Attorney is a legal document that allows you to appoint a named person, called your attorney, to make decisions on your behalf. The person making the EPA is called the principal.

The powers your attorney has depend on what you have given them under your EPA. You can appoint someone to make:

financial decisions
personal decisions
health decisions
or a combination of these.

Queensland law allows an adult to authorise one or more eligible attorneys to make financial and/or personal (including health) decisions that the principal could lawfully make themselves.

Why Is It Called "Enduring"?

The word “enduring” is important. A normal authority to act for someone may not continue if that person loses capacity. An enduring power is designed to continue despite the principal losing decision-making capacity.

For example, imagine you have an accident and suffer a serious brain injury. Before the accident, you could manage your own bank accounts, property and other financial affairs. After the accident, you can't make those decisions yourself.

If you have a valid EPA covering the relevant financial matters, your attorney can continue to exercise the authority you've given them. That's the point of the document. It allows you to choose who will make certain decisions for you before you need them to.

What Can an Attorney Decide?

This depends on the powers you've given them. There are two broad categories under Queensland's EPA framework:

Financial matters

Your attorney can potentially deal with things such as:

paying your bills
managing your bank accounts
collecting your income
dealing with investments
buying or selling property
managing your financial affairs
dealing with your business.

Personal matters

Your attorney can potentially make decisions about matters such as:

where you live
who you live with
what support services you receive
your lifestyle and personal arrangements
healthcare decisions.

This is why an EPA isn't simply a document about your bank account. It can be about you.

What Does an EPA Have to Do with Healthcare?

This is one area where people often get confused.

An attorney appointed under an EPA can make certain healthcare decisions for you if you have given them the relevant personal powers and you no longer have decision-making capacity for those matters.

For example, this could involve decisions about:

medical treatment
medications
surgery
dental treatment
therapies
other healthcare.

However, an Advance Health Directive (“AHD”) can also play an important role.

An AHD allows you to record your own directions about future healthcare, including decisions about medical treatment and end-of-life care. Where your AHD gives a binding direction about treatment, healthcare providers must follow that direction rather than asking your attorney to override it.

So your EPA and AHD can work together, but they do different jobs.

Enduring Power of Attorney vs Advance Health Directive

Think of them this way:

Your EPA: "Who do I trust to make decisions for me?"

Your Advance Health Directive: "What healthcare decisions do I want to make in advance?"

An EPA can appoint someone to make personal and healthcare decisions for you if you can't make them yourself. An AHD allows you to record your own directions about future healthcare.

Having both documents forms an important part of planning for incapacity.

Does Your Attorney Take Over When You Sign Your EPA?

Not necessarily. This is one of the biggest misconceptions about an EPA.

For personal and health matters, your attorney's authority only starts when you no longer have the ability to make those decisions yourself.

Financial matters work differently. You can choose for your financial attorney's authority to begin immediately, from a particular date, or only when you no longer have capacity to manage your finances.

Signing an EPA doesn't automatically mean you've handed over control of your finances. The way the document is prepared matters.

Can You Still Make Your Own Decisions?

Yes. If you still have decision-making capacity for a matter, you can continue making your own decisions. Your attorney isn't there to make decisions for you simply because they have been appointed.

The Queensland framework is based on supporting a person to make their own decisions where possible and respecting their views, wishes and preferences. The aim is to have someone ready to step in when you genuinely need them.

What Happens If You Lose Capacity Without an EPA?

This is where things can become difficult.

You or your family might assume that your partner or adult children can simply step in and manage everything for you. They can't necessarily do that. Being your spouse, parent, or adult child does not automatically give someone authority over all of your financial affairs.

If you don't have an EPA and lose decision-making capacity, a formal decision-maker may need to be appointed through QCAT. That person may be a guardian for personal and health matters and/or an administrator for financial matters. You and your family do not get to control that process, and it is facilitated by QCAT. That's one of the biggest reasons to put an EPA in place while you have capacity.

What If Your Family Just Needs to Pay Your Bills?

This is a common situation.

Imagine you're in hospital after an accident. Your mortgage payment is due. Your electricity bill needs to be paid. Your investment account needs attention. Your insurance claim needs to be dealt with. Your partner knows exactly what you would want to do. That doesn't necessarily mean they have legal authority to access or deal with everything in your name.

An EPA can give the person you've chosen the legal authority to deal with your financial affairs within the scope of the powers you've given them.

What If You Own Property?

Property is one of the areas where an EPA can become particularly important.

Your attorney may need to deal with property on your behalf, including potentially selling property where the relevant authority has been given.

For example, you might become unable to live independently and need to move into residential care. Your home may need to be sold to fund your ongoing needs. If you can't make that decision yourself, your attorney may need appropriate authority to deal with the property.

Can Your Attorney Sell Your House?

Potentially, yes, if the EPA gives them the relevant financial authority and the circumstances allow it.

This is one reason choosing your attorney is so important. You're potentially giving someone significant authority over your property and finances. Your attorney must exercise their powers properly and in accordance with their legal obligations. They aren't entitled to simply treat your money as their own.

Can Your Attorney Access Your Bank Account?

If your EPA gives them the relevant financial authority, your attorney may be able to deal with your bank accounts and other financial affairs on your behalf.

This might include:

paying your bills
managing your income
paying expenses
managing investments
dealing with financial institutions.

Your attorney must use their authority for your benefit and in accordance with their obligations. The role comes with significant responsibility.

Can Your Attorney Make Decisions About Your Children?

This is an important limitation.

An attorney cannot simply take over decisions about your children or other dependants under an EPA. This is separate from planning who may care for your children if you die. Your Will can deal with testamentary guardianship and your wishes for your children's care after your death. Your EPA deals with your personal (including health) and financial decisions during your lifetime.

Can Your Attorney Change Your Will?

No.

Your attorney cannot make or change your Will on your behalf. Your Will is a personal legal document that reflects your wishes about what happens to your estate after your death.

This is another important distinction between your EPA and your Will.

Can Your Attorney Access Your Superannuation?

This needs to be considered carefully.

An attorney may be able to deal with financial matters relating to your affairs, but superannuation has its own legal framework and the operation of an EPA does not simply mean your attorney can do whatever they want with your superannuation death benefit.

Your superannuation arrangements should be considered as part of your broader estate plan. In particular, an EPA does not replace a valid binding death benefit nomination.

Who Should You Appoint as Your Attorney?

This is one of the most important decisions you make when preparing an EPA.

Your attorney should be someone you trust to make decisions in your interests. They should ideally be:

trustworthy
responsible
financially capable, if managing financial matters
willing to take on the role
available when needed
capable of communicating with banks, medical providers, and other organisations
able to respect your wishes.

You don't have to appoint your spouse. You don't have to appoint your eldest child. You don't have to appoint the same person for every type of decision.

Can You Have Different Attorneys for Different Decisions?

Yes.

This can be particularly useful. For example, you might appoint:

Your sister to make your personal and healthcare decisions.

Your brother to make your financial decisions.

You may trust both people, but for different reasons.

Perhaps your sister knows your values and healthcare wishes exceptionally well, while your brother is an accountant and is more comfortable dealing with complex financial matters. Queensland's EPA framework allows you to appoint different attorneys for different matters.

Can You Have More Than One Attorney?

Yes.

You can appoint more than one attorney. If you do, you need to consider how you want them to make decisions.

Depending on the arrangement, they may be required to act jointly, individually, or according to another decision-making structure permitted by the document.

Think carefully about this. Two people who need to agree on every decision may create unnecessary difficulty if they have different views or don't communicate well.

On the other hand, having more than one person involved can provide accountability, continuity, and support in decision-making.

What Happens If Your Attorney Can't Act?

Your estate plan should consider this possibility. Your chosen attorney might:

die before you
become unable to act
lose capacity themselves
become unsuitable
no longer be willing to act
become estranged from you.

Your EPA can include appropriate arrangements for substitute attorneys and decision-making. This is another reason to review your documents when your circumstances change.

What Responsibilities Does an Attorney Have?

Being appointed as someone's attorney is a significant responsibility.

An attorney isn't simply given a blank cheque. They must comply with the relevant legal principles and act appropriately when exercising their powers.

They also need to understand the limits of their authority. For example, an attorney cannot:

make or change your Will
vote for you
make decisions about your children or dependants
act illegally or unethically
disregard the terms or limitations of the EPA.

What If Your Attorney Misuses Their Power?

Choosing an attorney isn't a decision to take lightly.

Financial abuse can occur where an attorney misuses their authority. If there are concerns about an attorney's conduct, there are mechanisms available to address the situation, including applications to QCAT and investigations by the Public Guardian in appropriate circumstances.

This is why choosing someone you genuinely trust is so important.

When Should You Make an EPA?

You need to make an EPA while you have decision-making capacity. An accident, illness, or unexpected event can affect your ability to make decisions at any age.

It’s worth asking: Who would make decisions for me if I survived, but couldn't make them myself?

What Happens to Your EPA When You Die?

Your EPA is a lifetime document.

It does not continue to give your attorney authority over your affairs after your death. Your Will then becomes the key document for dealing with your estate. Your executor takes on the role of administering your estate in accordance with your Will.

This is another reason your Will and EPA work together as part of an overall estate plan.

A Real-Life Example

Imagine you're 42, have two young children, own a home and run a business. You have a serious accident and spend several months unable to make decisions.

Your mortgage still needs to be paid. Your children still need to be cared for. Your business needs someone to make decisions. Your insurance claims need to be dealt with. Your investments need to be managed. Your medical team needs someone to make healthcare decisions if you can't.

Your partner may be able to help with some of these things informally. But an EPA gives you the opportunity to decide in advance who you want to have legal authority to make the relevant decisions for you.

What Should You Think About Before Making an EPA?

Think about:

1. Who do I trust?

Who would genuinely act in my best interests?

2. Who understands me?

Who understands my values, priorities, and wishes?

3. Who is financially capable?

If they will manage your finances, are they responsible with money?

4. Who can handle difficult decisions?

Your attorney may have to make significant decisions under pressure.

5. Who would communicate well with professionals?

They may need to deal with banks, lawyers, accountants, doctors, and government agencies.

6. Do I want the same person handling everything?

You may want different people for financial and personal decisions.

7. What happens if my first choice can't act?

Consider substitute arrangements.

When Should You Review Your EPA?

Your EPA shouldn't be a document you sign once and forget about. You should consider reviewing your EPA every two to three years and after major life events such as marriage, divorce, or changes in your relationship with your attorney.

You should also consider reviewing it if:

your children become adults
your financial circumstances change
you buy or sell significant assets
your business changes
your attorney moves overseas
your relationship with your attorney changes
your attorney becomes unable to act
you separate or divorce
someone close to you dies.