When it comes to planning for the future, most people think about wills and how their estate will be distributed after they pass away but they do not think about what would happen if they’re still alive but can’t make their own decisions.
When you’re young, healthy, and just starting out in life, planning for incapacity is probably the last thing on your mind. Many young adults assume that documents like an Enduring Power of Attorney (“EPA”) are only necessary for the elderly or those with serious health issues. But the reality is that unexpected accidents, illnesses, or life changes can happen at any age—and without proper arrangements in place, your loved ones could be left powerless to help you when you need it most. EPAs are for people of all ages and are a crucial part of planning for the future.
An EPA is a legal document that allows you to appoint someone you trust to make financial and property decisions on your behalf if you lose capacity to make those decisions for yourself. This might be due to an accident, illness, mental health condition, or cognitive decline.
Why is an EPA important?
An EPA is like an insurance policy – you have it in place hoping that you never have to use it, but if tragedy occurs and you do – it is there to assist you. You don’t own a home without an insurance policy so why would you not put precautionary measures in place for your property and financial needs should the worst happen?
An EPA is one of those documents that people do not prioritise and often say they will come back to later but sometimes later doesn’t come and then it is too late. If you have assets in your name, whether it is a bank account or property – regardless of whether you own it solely or with another person – you should have an EPA.
There’s a common misconception that parents or partners can simply “step in” if something happens, however this is not the case. Noone can automatically just “step in” to take control of your finances unless they’ve been formally appointed by you through an EPA. If you have not made an EPA, the only alternative is for someone (usually a relative) to make an application to the State Administrative Tribunal (“SAT”).
An application to the SAT for someone to take control of your financial or property affairs for you, is a process which takes time and causes additional stress. There is also the risk that if the SAT forms the view that your family member, or whoever is applying, is not suitable to manage your finances, they will appoint the public trustee instead. Not having an EPA in place gives rise to the risk that the SAT may appoint someone to act who you would not have chosen yourself.
Preparing your own EPA means that you can choose for yourself who you want to manage your financial affairs and then your loved ones do not have to go through the SAT trying to get appointed. You should choose somebody who you trust will do the right thing by you. Making your own EPA has the added advantage of being ready to go right away in case of emergencies-benefiting both you and your loved ones.
How are EPAs used?
An EPA isn’t just for managing the financial side of things but also property related matters. Often people think that because they own their property at joint tenants with their spouse or partner, that they don’t need an EPA but this is not the case.
Even if you own property jointly with someone, you each have your own legal entitlement to the property, and you cannot automatically sign for each other. We often see elderly spoused in the SAT because they don’t have an EPA but their spouse has lost capacity, their family home is no longer suitable for them and now they want to sell it and move into care. However, they cannot sell the home without an EPA or an administrative order by the SAT – you need this to be able to sign for your spouse.
Not only does this delay things and add more stress and pressure during an already difficult time, but to be able to deal with property, the EPA must also be registered at Landgate. Another reason why it is important and more beneficial to prepare an EPA in case it is required.
When you sign an EPA, you have three months to register it with Landgate after which time you either need a new EPA, or a statutory declaration stating that your EPA remains valid. This is because Landgate requires a recent EPA to ensure that the person you have appointed remains the person you have chosen to deal with your property which is a serious responsibility. Landgate charges a registration fee but once you register your EPA, it remains in place (unless revoked by you) and is specific to you as an individual. Therefore, if you sell or buy property, it will not affect your EPA registration with Landgate. Once the EPA is registered with Landgate, this then allows your attorney to deal with property transactions on your behalf if you are unable to, not just for loss of capacity, but also if for example, you are overseas during the sale of a property.
An EPA is a simple and powerful way to plan to protect yourself and your loved ones—no matter your age. You should always put an EPA in place when you make your Will, or if you already have a Will, but not an EPA, now is the time to revisit your estate planning documents. Our specialist wills and estate lawyers would be pleased to assist you in making these important decisions to insure your future needs.
About the Author: Ida obtained her Bachelor of Laws at Murdoch University in 2020, after graduating with a Bachelor of Criminology. Ida was admitted as a lawyer in 2022 and has worked in the Wills and Estates area since starting her career. She is passionate about providing a friendly service, helpful solutions, and navigating clients through challenging times.
