Property Owners Should Get All their Ducks in a Row
Make sure you have a Will and EPAs
You work hard to build up your assets over your lifetime, so you should decide what happens to them if you become incapacitated and when you die. If you own property, having a Will and Enduring Powers of Attorney (EPAs) will ensure all your affairs are in order and make things easier for your family and business colleagues.
You will all no doubt know the purpose of a Will. A Will records your wishes as to what happens with your property when you die, and who is to take care of it.
We strongly recommend reviewing your Will every five years, and when there are significant changes in a relationship, such as marriage, entering or ending a significant relationship.
If you don’t have a Will?
This is known as dying intestate, and means your property will be distributed in accordance with the Administration Act 1969. Your property is likely to go to your spouse/immediate family, but that may not be exactly what you or other family members wish. Dying intestate is also likely to increase the chances of a claim being made against your estate, and therefore incurring significant costs.
What is an EPA?
Having an EPA allows someone (an attorney) to help look after your affairs, manage your property and make decisions about your welfare if you are unable to do this. Your attorney doesn’t have to be your lawyer; it could be a family member, a trusted advisor or a close personal friend. An EPA differs from a general power of attorney as it allows the attorney to act for you if you become too unwell to make decisions for yourself, or what’s called ‘mentally incapable’ in the professional opinion of a health practitioner.
There are two types of EPAs – a property EPA, and a personal care and welfare EPA.
EPA in relation to property
A property EPA gives the attorney the power to manage not only your property (as in real estate), but also your bank accounts, shares, businesses, debts and so on. You don’t necessarily have to give the attorney unlimited power; you can restrict your attorney’s ability to only deal with certain matters.
You also have the choice whether your property EPA takes effect while you are mentally capable (as well as mentally incapable). This can be handy if you need someone to deal with your affairs while you are out of the country, or you just no longer want the day-to-day hassle of paying bills, etc. You also have the right to appoint more than one property attorney.
EPA in relation to personal care and welfare
A personal care and welfare EPA gives your attorney the power to make decisions on matters such as ones concerning your medical treatment or whether you need to go into a rest home.
Unlike the property EPA, the personal care and welfare EPA will only take effect when you are mentally incapable. As well, you can only appoint one attorney. You can, however, state that your attorney has the duty to consult with family members, but the final decision will rest with your attorney.
We recommend appointing a ‘successor attorney’ to act as a substitute in case your attorney is unable or unwilling to act for any reason.
Who to ask?
Your attorney/s must act in your best interests and protect your welfare. As you are giving considerable power to them, it pays to think carefully about who you appoint beforehand (as well as discussing it with them first). You can change attorneys at any time while you have mental capacity and appoint replacements.
Your EPAs cease when you die, and those powers then vest in the executors named under your will.
If you don’t have EPAs?
Not appointing attorneys before you are considered mentally incapable can be a costly and lengthy process. An application is made to the Family Court, but that doesn’t always mean the court will appoint who you would have wanted to look after your affairs.
We recommend everyone over the age of 18 should have a Will and both EPAs, so it’s never too early (but it can be too late) to get these organised. Having these ducks in a row will save your loved ones the hassle and the cost at what will be a difficult time.