Estate Planning

EPOA should start immediately

enduring power attorney start

The commencement date for an enduring power of attorney should not be when an SMSF trustee loses capacity, otherwise legal disputes can occur.

SMSFs have been advised to set the start date for an enduring power of attorney (EPOA) to be immediately, rather than waiting for a trustee to lose capacity as legal and medical disputes could occur.

Speaking today at the SMSF Association National Conference 2022 in Adelaide, View Legal director Matthew Burgess said the start date should be sooner rather than later.

“Generally, most of the forms around the country will give you flexibility as to when [the EPOA starts],” Burgess said.

“In a superannuation sense, particularly when we are looking at either managing death taxes or updating binding nominations, we would argue the only responsible commencement date for the enduring power of attorney needs to be immediately.

“We cannot be getting into a debate. Ask two lawyers for an opinion and you will get three different answers.

“If you have an enduring power of attorney that is deemed to start at the event of incapacity, you will have a legal debate and medical debate about what point in time that is.”

Trustees attempting to update or complete a new binding death benefit nomination can avoid questions regarding the legality of documents if the commencement date is immediate, he said.

Additionally, he said an EPOA could be pre-appointed into the role of trustee and sign the necessary documents to avoid future complications, but added the legal responsibilities of an enduring power of attorney and power of attorney are “radically different” and many professionals misunderstood their use.

“It is radically different in the estate planning sense. What an enduring power is designed to do is to actually traverse or go beyond the entitlements, and a power of attorney is designed to automatically provide entitlements,” he said.

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