Understanding Enduring Power of Attorney in Australia: A Guide to Planning for Incapacity

1. IGN 3rd World Congress on Adult GuardianshipARLINGTON USA – 28-30 MAY 2014 The Pursuit of an Australian Enduring Power of AttorneyPresenter – Andrew Taylor, Public Trustee for the Australian Capital Territory

3. About Canberra • Canberra is Australia’s Capital City and capital of the Australian Capital Territory (ACT) • Population 385,000 • Seat of Australian parliament • Australia’s largest inland city, 8th largest overall • Entirely planned, not unlike Washington DC • Described as a city in a park • Designed by an American Walter Burley Griffin in 1913

4. About PTACT • Public Trustee for the ACT (PTACT) • Independent, ACT Government statutory body • Traditional trustee service • Wills, Estates, Powers of Attorney, Trusts, Investment • Acts as attorney • Acts as financial manager for persons without capacity

5. Life expectancy and capacity Life expectancy (Australian Bureau of Statistics) 1950 2013 FEMALE 70.6 84.0 MALE 66.1 80.0 • Australian life expectancy – 4th highest • ACT has Australia’s highest life expectancy • 330,000 Australians suffer from dementia (pop 23.2M) • Expected to increase by ⅓ to 400,000 in less than 10 years • The single greatest cause of disability in older Australians • One quarter of people over the age of 85 have dementia In short, we are living longer but not with capacity (Alzheimer’s Australia)

6. Enduring Power of Attorney (EPA) A legal document that - • gives a trusted person (the attorney) • the legal authority • to act for another (the donor or principal) • to make binding decisions • beyond the donor’s loss of capacity • until revocation (by the donor or Tribunal) or death of the donor

7. Benefits of an EPA The donor (principal) can choose – • who will represent them • when the power/authority commences • whether immediate/temporary/loss of capacity • an alternate in the attorney’s inability

8. How does an EPA differ from a General Power of Attorney? • made in contemplation of inability/disability • activated as required or on loss of capacity • continues to be valid after loss of capacity • empowers your attorney to manage your affairs even though you are unable to instruct • ceases to have effect upon revocation or death

9. Low take-up rate of EPA’s The Australian community continues to be apathetic towards having an EPA with a low take-up rate in the community  Common excuses for not making an EPA include - • “My spouse, or my children, will look after me if I lose capacity” • “I will make my Enduring Power of Attorney when I need to” Whilst apathy is evident, another more plausible reason is that, in Australia, the safety net available to people who do not have an EPA in place is perhaps better than the EPA itself

10. If you don’t have an EPA... A specified list of people can apply on a person’s behalf to a Guardianship Tribunal. Tribunal can informally hear and determine that the person does not have decision-making ability May appoint a person (similar to an attorney) to make the same decisions as an attorney

11. What can a Tribunal do? • A Tribunal order seeks to protect persons with a • decision-making disability and – • determines capacity • decides on a suitable guardian/manager • can hear complaints about the guardian/manager • ensures dealings with the person’s land must be approved • protects the person’s land against fraud – caveat on land title • ensures the manager lodges accounts with PTACT for examination • can remove a manager • The Public Trustee or Public Advocate may be appointed as a last resort • Downside - high cost of this form of management to the community

12. Problems with EPAs • was the deed made under duress? • who decides when donor loses capacity? • loss of capacity can be episodal • exists purely as a deed without registration • lacks complete mutual recognition in all states/territories • potential tool for elder abuse • lack of an Australian register of EPAs • absence of a ‘watchdog’ over the actions of attorneys • weakness of, and inconsistencies in, witnessing provisions (Queensland Law Reform Commission - A review of Guardianship Laws – 2010)

13. Powers of Tribunal to determine capacity to appoint a suitable guardian/manager to hear complaints about the guardian/manager to terminate a manager/guardian’s appointment to ensure manager presents accounts for examination to protect he person’s land title by caveat to facilitate scrutiny of dealings with property by PTACT

14. Obstacles Regulatory landscape of Australian laws - State/territory legislation dealing with substitute decision-making, while based on the same paradigm or framework, differs in significant ways Obstacles to portability throughout Australia To make the EPA more appealing it is mandatory that we remove the impediments including government/community intransigence as well as legislative and process differences etc Multiplicity of different state/territory registration requirements, forms and fees prior to land transactions

15. Issues Most pressing issue - state/territory mutual recognition Australian EPA laws provide that mutual recognition is limited to the extent that the powers could validly have been given by an EPA in the state/territory in which it is being recognised The time of revocation is not fixed with any certainty Lack of education leads to confusion and abuse of older people Number of orders made by Tribunals is growing by 10% annually

16. Issues EPA needs to be structured similar to Tribunal order Experts see the EPA as a means of preventing elder abuse. Statistics tell us that most financial elder abuse is perpetrated by family members and often under an EPA Some see compulsory registration of EPAs as a solution to validate any transaction made in reliance upon it. The reality is however that financial elder abuse is also perpetrated under registered EPAs often with greater ease People move around Australia freely and often and have property and family in many states/ territories

17. Issues Compulsory registration must be uniform throughout Australia Registration does not establish veracity of an EPA, merely its existence Only one State provides that acts under an EPA are invalid unless the EPA is registered. All Australians should be afforded equal protection Registered EPA may heighten the credibility of an attorney in the minds of those relying upon it Non-uniform attempts have been made to strengthen the EPA by tightening up the signature and witnessing provisions with complicating results

18. Issues Australian state/territory governments continue to make processes unwieldy and complex by working separately Better education is needed around financial elder abuse National register is vital permitting registration once with validity in all states/territories Lower cost to older persons Would permit a search to be made 24x7 of one register to ascertain whether an EPA is registered

19. Legislative issues Australia’s Parliament has no power to make laws about substitute decision making. This is the preserve of 6 states and 2 territories. The Standing Council on Law and Justice (SCLJ) has a brief to harmonise Australian laws In Nov 2008 SCLJ issued a communique on Substitute Decision Making.... States/territories also agreed on a project to improve the effectiveness of mutual recognition of powers of attorney between jurisdictions, as recommended by the House of Representatives Standing Committee on Legal and Constitutional Affairs (Standing Committee on Law and Justice 2008)

20. Legislative issues • The Victorian Parliament Law Reform Committee – Inquiry into Powers of Attorney recommended – • a ‘Powers of Attorney Act” • consistent names for documents and powers • consistent names to parties to an EPA eg ‘principal’ and ‘representative’ • easier to understand forms • one document for all types of EPA • publication in multi-languages • universal approach to education around EPAs targeting seniors • (Victorian Parliament Law Reform Committee – Inquiry into Powers of Attorney - Aug 2010)

21. A way forward • co-operation between States/Territories • uniform, ‘word for word’ identical laws in every state/territory • strong appetite in the commercial world for change • Australian Bankers’ Association (ABA) has agitated for uniform substitute decision making arrangements (Australian Bankers’ Association 2013) • opportunities to reducing significant complexity, cost and confusion encountered by bank staff and customers • Australian ‘Applied Laws’ legislation ie a law is enacted in one jurisdiction and then applied in other states/territories (Australian Parliamentary Counsel’s Committee Protocol 2008)

22. A way forward Special opportunity - same political party in office in most Jurisdictions across Australia New scheme could sit alongside existing arrangements so that no repeal or harmonisation of existing laws is required. In time the new scheme could effectively overtake existing enduring powers (John Billings, Dep Pres VCAT 2008) Technological advances - national databases accessible 24x7 more realistic and less expensive Like many complex problems the answer is in a planned, cooperative, incremental approach