Townsends Business and Corporate Lawyers said that an enduring power of attorney (EPOA) is one of those crucial documents which must be kept safely, as it authorises the attorney to act on behalf of their principal in respect of the latter’s legal and (in some states) financial matters.
Unlike a general power of attorney, however, it “endures” or authorises the attorney to make decisions even after the principal loses their mental capacity, the firm noted in a technical update.
Previously, a technical specialist had also flagged that ensuring correct processes and checklists when appointing the right enduring power of attorney (EPOA) will be crucial when uncertainty strikes SMSFs.
The firm said that registration of the EPOA in the local land register is not generally required except when the attorney needs to execute a land dealing (e.g. transfers of properties) or share transactions for publicly listed shares.
“In order to register the EPOA, the originally executed EPOA must be presented to the local land register,” Townsends said.
“For example, if the principal who owned a property becomes incapacitated and the attorney decides that it is best to sell the property, the EPOA must be registered before the attorney can sign documents of transfer on behalf of the principal.”
Townsends noted that when an attorney executes a dealing or share transaction for publicly listed shares, the following information is often included in the execution clause: the registration number (i.e. “Book”, “No.”), the attorney’s name, a statement that the person signing is the attorney for the party. Also, the attorney’s signature must be witnessed in the usual manner.
However, when the originally executed EPOA is lost and not registered and the principal has already lost mental capacity, all efforts should first be exhausted in locating the missing originally executed EPOA.
“This includes searching the principal’s belongings and the enduring attorney’s files and enquiring about it with the solicitor who prepared the EPOA for the principal, among others. Has the attorney exercised his/her power before, in another context? In which case could it be with that other party such as a bank or the grantor’s accountant?” the firm said.
“If efforts to locate it are futile, the land register may give consideration to the registration of a copy of the EPOA in cases of genuine hardship.”
In NSW, a written request is required together with a statutory declaration by the lodging party, stating details of the loss or destruction of the originally executed EPOA, as well as details of searches undertaken to locate the originally executed EPOA, the authenticity of the copy and the inability to reconstitute the originally executed EPOA.
Furthermore, there needs to be a reason for the copy to be registered (e.g. urgent sale of property) and the hardship that will result from the copy not being registered (e.g. medical bills to be paid from proceeds of sale of property).
However, Townsends warned that notwithstanding compliance with the requirements above, registration of a copy of the EPOA is not a guarantee.
“It is important to always keep the originally executed EPOA in a safe place (e.g. safety deposit box at home, bank deposit box or solicitor’s office) which can be accessed by the enduring attorney so as to have the peace of mind that the appointed enduring attorney can act on behalf of the principal when the latter is no longer able to act for themselves,” Townsends said.
“If the principal owns properties and there is any chance that the enduring attorney could be required to deal with them, it is best to register the originally executed EPOA straight away to make things easier for the enduring attorney if the principal is no longer able to make decisions for themselves.”
