An Enduring Power of Attorney (“EPA”) is a document made by a person (the “Donor”) which gives financial decision-making authority to another (the “Attorney”) during any period in which the Donor is mentally incapable of making their own financial decisions. The EPA is a private direction given by the Donor to the Attorney, and contains very limited public disclosure requirements.
The powers given in the EPA do not take effect until the conditions for the activation have occurred. The most typical condition to activate the EPA is the onset of the mental incapacity of the Donor. Other triggering events can be the declaration of the Donor, or the EPA can be drafted so that it takes effect immediately after it is signed. The activating conditions can be adjusted to meet the specific needs of each Donor, and should be discussed with your lawyer.
The EPA usually bestows very broad powers upon an Attorney. The authority given typically includes the ability to pay the Donor’s bills, do their regular banking, file income tax returns and sell or transfer real property, when the Donor is mentally incompetent, and unable to do so for themselves.
If appropriate, the EPA can be more restrictive, granting limited powers to the Attorney to deal with only specific matters.
An EPA remains in effect throughout any period of mental incapacity of the Donor. It can be terminated by the Donor, provided the Donor has the mental capacity to terminate it. The powers granted to the Attorney in the EPA automatically terminate on the death of the Donor, when the remaining Estate is managed under the provisions of the Donor’s Will; that is, the EPA is only in force while the Donor is alive.