Planning for the future can feel overwhelming, and understanding which estate planning documents you need isn’t always straightforward. Many people are well aware of the importance of having a Will and are eager to finalize one. However, fewer people show the same enthusiasm when it comes to completing their Enduring Power of Attorney (EPA). Often, a Will is seen as the main focus, while the EPA is the overlooked sidekick.
While it may not be the most exciting document to consider, having a well-drafted EPA is crucial in ensuring that your affairs are managed according to your wishes by the person you choose. The person you appoint as your Enduring Power of Attorney can significantly impact your future well-being. An EPA is more important than a Will in that you will still be alive.
What is an Enduring Power of Attorney?
An EPA is a legal document that allows you to appoint one or more individuals to manage your personal, financial, and health-related decisions. Unlike a standard Power of Attorney, which becomes void if you lose mental capacity, an Enduring Power of Attorney remains in effect even when you are no longer able to make decisions for yourself.
For health-related decisions, no one can act on your behalf unless you have lost capacity. However, when it comes to financial matters, you have two options:
- Immediate Authority – You can choose to grant your attorney/s the power to manage your finances as soon as the document is signed. This can be helpful if, for example, you are traveling overseas and need someone to handle financial matters in your absence. Also you may have capacity but are too ill to handle your financial matters. Your attorney can attend to your business affairs without having to prove you have actually lost capacity.
- Authority Upon Loss of Capacity – Alternatively, you can elect that your attorney/s only have power over your financial affairs once you lose capacity. In this case, they would need to provide evidence of your incapacity before stepping in. While this option ensures you maintain full control until necessary, it can also create challenges when immediate action is required.
How Many Attorneys Should I Have?
There is no one-size-fits-all answer when it comes to appointing attorneys under an Enduring Power of Attorney. The decision should be based on your personal circumstances and who you trust in your life.
Some people choose to appoint a single attorney with a substitute in case the first attorney is unable to act. Other people opt to appoint multiple attorneys to act jointly. This way multiple attorneys share responsibility. Where you decide to appoint more than one attorney, it’s important to consider how they will work together:
- Jointly – This means they must agree on all decisions together. This can provide an extra layer of oversight but may also cause delays if your attorneys can’t reach a decision;
- Severally – With this option each attorney to act independently. This can make decisions more streamlined however requires a higher level of trust in you’re the attorneys to make decisions alone. Where one of your attorneys is difficult to access or lives far away from you this can be a preferable option.
- Jointly and Severally – Giving attorneys the option to act together or separately. This way they can either all sign off on a decision, but it is not compulsory.