Enduring Power of Attorney (EPA) – critical to proper estate planning
Most people think of estate planning as involving only the preparation of a will, which nominates beneficiaries of the will maker’s estate on his/ her death.
However, the wealth of your estate on your death is determined by what you do, while you are alive.
If, during your life, you encounter mental or health problems such that you cannot manage your own affairs, then this could adversely impact on how you create and manage the wealth you intend to distribute via your will, on your death.
If you become incapable of managing your own affairs and do not have a legal Enduring Power of Attorney (EPA) document in place, your loved ones will be left with no alternative but to approach the Public Guardian for an order as to who is to manage your affairs for you, and this can be a stressful and costly exercise.
So, the message is that, whilst you have the mental capacity to make such an appointment, you should put in place an EPA. In this document you nominate a person or persons to act on your behalf ( pursuant to specific instructions or generally) in the event that your mental or health capacity prevent you from so doing. ( your EPA can also operate immediately upon the appointee signing it.)
The EPA gives authority to your appointees to, for example, fill the role of director of your company or trustee company of your superannuation fund, pay accounts and living expenses, and buy or sell property ( the EPA is registered with the real property office, where dealings in property occur.)
You can also put restrictions on the authority you give to the appointee.
The appointee is legally bound to act in your best interests at all times and to keep his/ her affairs separate from yours, by use of proper processes to achieve this.
It is important that you choose an EPA who is knowledgeable about your affairs and aspirations in the context of what wealth you want to create and leave behind in your will. That is why it is not unusual for your EPA to also be the executor and trustee of your will. In many cases this make perfect sense.
There is nothing preventing your EPA-come-executor from being a beneficiary under your will.