Dear Reader 

This is a very sensible and timely query. For individuals who own significant assets, such as farmland, livestock, entitlements, and bank accounts, forward planning is essential.

An Enduring Power of Attorney is a legal document by which a person, known as the donor, appoints one or more trusted individuals, known as attorneys, to make decisions on their behalf in the event that they lose mental capacity in the future. It does not take effect while the donor retains capacity. Its purpose is to ensure that, should capacity be lost due to illness, accident, or age-related conditions, there is a clear and lawful mechanism for managing the donor’s affairs.

An Enduring Power of Attorney can cover decisions relating to property and financial matters, and, if specifically provided for, certain personal welfare decisions. In the context of a farming client, this can include operating bank accounts, dealing with the sale or lease of lands, managing farm payments and entitlements, entering into contracts, paying liabilities, and generally ensuring that the farm continues to operate without disruption.

It is important to distinguish between a Will and an Enduring Power of Attorney. A Will takes effect only on death. An Enduring Power of Attorney operates during the donor’s lifetime but only if they lose capacity. The two documents serve entirely different functions and one does not replace the other.

The legal landscape has changed significantly with the commencement of the Assisted Decision Making legislation and the establishment of the Decision Support Service. All new Enduring Powers of Attorney must now comply with the updated statutory requirements and must be registered with the Decision Support Service.

Under the current system, the document must be created in a prescribed format and includes detailed statements from the donor, a legal practitioner, and a medical practitioner. The solicitor must confirm that the donor understands the nature and effect of the Enduring Power of Attorney and that they are not acting under undue influence. A doctor must certify that the donor has the mental capacity to execute the document at the time it is signed.

There are also formal notice requirements. Certain specified persons, usually close family members, must be notified of the intention to create the Enduring Power of Attorney. This introduces an additional layer of transparency and protection.

Unlike the previous regime, registration now takes place shortly after execution through the Decision Support Service, rather than being deferred until loss of capacity. If the donor subsequently loses capacity, a further notification and activation process must be completed before the attorneys can begin exercising their powers.

For a farming client, careful thought should be given to who is appointed as attorney. The role carries significant responsibility and may involve complex financial and operational decisions. It is possible to appoint more than one attorney, either to act jointly or jointly and severally, depending on the level of flexibility required.

Advance planning through a properly drafted Will and a compliant Enduring Power of Attorney provides reassurance not only to the donor but also to family members and those involved in the running of the farm. In the absence of an Enduring Power of Attorney, an application to court may be required if capacity is lost, which can be costly, time-consuming, and stressful.

Putting these arrangements in place while your uncle has full capacity ensures that his wishes are respected and that the farm and associated assets can be managed smoothly should the unexpected arise.