In this podcast, Solicitor Mahendra Mohan discusses what you should be aware of regarding the ongoing management of the actual Enduring Power of Attorney (EPOA).
TRANSCRIPT
Speaker 1:
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Dan:
You will recall a prior podcast in which we discussed the importance of having an Enduring Power of Attorney. And of course, an Enduring Power of Attorney is a document that requires a principal to appoint a person or persons that they trust to make decisions about their health and financial affairs in the event that the principal is not able to make those decisions. In today’s podcast, we’re continuing the conversation and I’m again joined by Big Law Estate Planning Lawyer, Mahendra Mohan.
Dan:
Mahendra, so once someone has given you instructions for the Enduring Power of Attorney to be prepared, and it’s signed and finalised, what things should a principal be aware of with regards to the ongoing management of the actual Enduring Power of Attorney?
Mahendra:
Okay. Hello, Dan. Look, great question. What the principal needs to do is very simply review the Enduring Powers of Attorney. It doesn’t have to happen every day. If and when circumstances change, or if they become aware of any change. All that’s required is to give us a call. We can review the document with them. Or they can review the document. If they have any questions, give us a call. And then, we can advise the client. It generally happens that, look, things will change over time.
Mahendra:
When an Enduring Power of Attorney is made, the principal will consider an attorney – could be a child, could be a friend – and there has to be some relation between the parties. They will look at factors like how long someone has known the other. In terms of children, which child will make the best decision for me. There is always the element of trust. Now, what happens is that if there’s any change, then the principal will need to consider that appointment.
Mahendra:
Over time, it may be the case that if a child decides, look, I’m going to live overseas, and mum and dad then feel, look, you’re going to be so far away, we may need to think of someone closer by.
Dan:
What are the circumstances surrounding the change of attorney? Is that a complicated process?
Mahendra:
The process in itself is not complicated. The first step would be to meet with us. If there is an existing Powers of Attorney, that will need to be formally revoked. Then a new one can be prepared. So what happens is that the principal will need to revoke the document. We need to look at the date the document was created, revoke it and then create a new one. The next step is, which is essentially undertaken by us and not the client is to simply let each of the attorneys know that the prior appointment has been cancelled. Now, this is a very important part of it, because if a principal has given their attorney a copy of the document or to the bank, then there is an understanding that that attorney is acting for the principal. So once that appointment is revoked, it’s always a good idea to let the attorney know that their involvement is now finished. And also let the banks know that it’s been cancelled so that the attorney does not act on the document anymore.
Mahendra:
Sometimes it can happen inevitably. It’s a process. They’ve been doing the bank for you. They may go get the money out. And all of a sudden there’ll be issues created. So we want to avoid that.
Dan:
Mahendra when things go wrong in these types of matters, they can go wrong catastrophically, can’t they?
Mahendra:
It can because the issue would be as for my prior example, is that funds can keep coming out and then it falls on other people to try and retrieve that money. So it’s a good idea to review the document. And if changes are required to implement that when the principal has capacity. Now, sometimes capacity will not play a part at all. It comes down to simply factors affecting the attorney. Your appointed attorney might pass away. In that case, you will need to review the document and change it. Your attorney may over time decide, I don’t want to be an attorney. So that will trigger a change in the appointment as well. Another one we are seeing recently is where the attorney may be declared bankrupt. Then legally, they can’t be your attorney. And the most recent ones we as are seeing where clients are changing their document is, I’m sure you would’ve heard of the new assisted dying laws that have come through, is a change in the principal and the attorney’s mindset. If they differ in the approach, then that person is not the right person to be the attorney.
Dan:
It does emphasise the importance, doesn’t it, of appointing the right attorney?
Mahendra:
That is absolutely correct. But we need to also put the appointment on a timeline as well. So an attorney might be appointed five, six years ago, things do change. And that’s the reason why we do implore all clients to review it. Just consider if there’s any changes to it, please get in touch and get the document changed.
Dan:
Now, if anyone’s got any questions that this podcast has prompted, they can contact you at Big Law.
Mahendra:
They certainly can. What we also do, Dan, is to explain the process to them as well. It’s a simple process from our viewpoint, but we do like to explain the process to the client as well. Now, just briefly in terms of how the change will occur. So if the client was to contact us and they have capacity, this is not putting a judgement on the client because the critical element in changing your Powers of Attorney is that you must have mental capacity. So if the client has mental capacity, then we can take those instructions, revoke the existing one, or in fact, create a new one for them, if they haven’t got one already, and then prepare a new one based on fresh instructions. In the case of revocation, we can then let the banks and any other attorney know that their involvement is no longer required and then again, put the documents in the safe custody and the clients move on.
Mahendra:
The second one is we do get inquiries from concerned family members, where if a principal has lost capacity and the family member is aware that we do have an attorney who is not looking out for the best interest of the principal. In that case, we do get involved to help the family members refer the matter to QCAT or to the Supreme Court. What this will do is that it will ensure that the affairs of the principal who has lost capacity is investigated and so that they make sure that the fiduciary obligation of the attorney is not breached and that they are looking out for the principal in all cases.
Dan:
There’s a lot to it, isn’t there? It’s just not a simple change.
Mahendra:
No, it’s not. We try and explain that, but at the same time, not to scare the client, but there are, as you said, there are serious legal ramifications if the wrong person is appointed or there’s a change and the principal neglects to make any changes to their document. So if in doubt, or to give us a call.
Dan:
Okay, Mahendra, might get you to say that statement again? Because I just over overrode you.
Mahendra:
Oh, sorry. So what we tell clients, if that they, or to give us a call, have a discussion and then we’ll guide them through the process.
Dan:
Mahendra, thanks for joining me.
Mahendra:
Thank you, Dan.
Speaker 1:
Thanks for listening. Need further information? Visit us at biglaw.com.au
