To ensure your assets will be protected should you become unable to make financial decisions due to an accident or bad health, we recommend your Estate Plan includes an Enduring Power of Attorney.
What is an Enduring Power of Attorney?
Unlike a General Power of Attorney, an Enduring Power of Attorney is used when a person can no longer make decisions on their own but must be appointed beforehand.
Our experience
We’ve worked with clients who’ve had an Enduring Power of Attorney in place and it assured their Self-Managed Superannuation Funds (SMSF) could continue to provide and care for the family member.
Recently, one of our clients nominated their spouse to be Enduring Power of Attorney, ensuring when they could no longer undertake Trustee Director duties, our team of advisers were able to resign them as Director of the Trustee company where their spouse could act on their behalf. This meant we didn’t have to sell any investments or roll funds out of the SMSF. The Fund could continue, and it provided for their care and the wellbeing of the family. By having the Enduring Power of Attorney in place, the spouse and family could focus on our client’s wellbeing without any financial concerns.
How did the Enduring Power of Attorney work?
By having their Estate planning in order, the nominated family member was appointed as an Alternate Director of the SMSF Trustee Company in accordance with the SMSF Trust Deed and The Trustee Company Constitution seamlessly.
This realised the main outcomes below:
• Our client could remain a member of the SMSF and continue to receive the tax benefit of their superannuation balance being held in a SMSF structure.
• Our client avoided administrative and compliance problems with the SMSF.
• The SMSF didn’t have to be wound-up or have its assets liquidated.
• Unnecessary costs on legal and accounting fees were avoided.
What are the benefits of having an Enduring Power of Attorney in your Estate Plan?
• It is a formal document by which you appoint another person to act on your behalf. You are not giving away your rights; you retain the power to continue acting for as long as you are able to.
• A Power of Attorney only operates during your lifetime. The authority given to your attorney ceases at your death.
• Your attorney must act in your best interests, consistent with your known or stated wishes, and not doing so amounts to a breach of trust.
• It can assist in the event a more active trustee loses mental capacity and other trustees may not be able to make the necessary decisions for the Fund.
Our process
You'll be assisted with ensuring that you’ve considered and appointed an Enduring Power of Attorney in your Estate Plan.
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How can we help you?
As you start the new year, it is a good opportunity to review your Estate Plan and select an Enduring Power of Attorney. Should you require assistance in reviewing your Estate Plan to ensure it includes all the necessary documentation, please don’t hesitate to reach out to your relationship partner.
This information is general in nature and should not be relied upon. Should you wish to discuss in more detail we are happy to assist you and work with your lawyer.
