power of attorney capacity

When Does A Power of Attorney Begin?

When Does A Power of Attorney Begin?

Powers of attorney can be general or enduring. “Enduring” simply means that the powers you give endure beyond you losing mental capacity. Today, we are talking about Enduring Powers of Attorney that give powers in relation to financial, legal and personal matters. These powers of attorney can begin immediately upon you signing them, or they can be specified to only begin once you have actually lost capacity.

Quite a lot of people ask me how it is determined when capacity is lost, so that the power of attorney begins. This is a difficult question, because the definition of “capacity” is different for different kinds of decisions, and whether it is physical or mental capacity. Capacity is also not exclusively a medical question, because the Courts will not solely consider medical evidence in determining capacity in the event of a dispute.

The best that an attorney can do in making the decision about whether their loved one has lost capacity enough for the power to commence, is to get a medical certificate. If they are in doubt, they could get a referral from their GP to a geriatrician or a neuropsychologist for a report. But if it is fairly certain that there are not going to be any disputes in the family about the use of the power, then a medical certificate should be sufficient.

When an attorney starts to use the Enduring Power of Attorney document, they should provide a certified copy of the document along with the medical certificate to each financial institution that first time that use it. This can then be kept of record, and does not have to be produced every time it is used.

power of attorney capacityThe real issue about capacity only really arises if there is a dispute amongst the family, and other members of the family who don’t have any powers have an issue about the use of the power, or whether the power should have commenced or not. Usually such proceedings would commence in VCAT, and VCAT would consider evidence from family members, nurses or other carers, along with medical certificates and specialist reports. VCAT can also order specialist reports to be prepared.

The test as to whether someone has lost capacity enough for an Enduring Power of Attorney to begin is a different test than the test used to determine whether someone has capacity to make a Will.

Posted in Estate Planning and tagged , , , , , .

Leave a Reply

Your email address will not be published. Required fields are marked *