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Sunday, October 17, 2010

The effect of court order on an Enduring Power of Attorney

At my recent seminars, I was asked several questions about the workings of Enduring Powers of Attorney (EPAs). A number of questions were based on revocation of an EPA, and a few were about whether an EPA is affected by a court-ordered trusteeship.

One of the reasons individuals make EPAs is to prevent the need for a trustee to be appointed should the individual lose mental capacity. The individual wants to maintain control over important decisions such as who will be appointed as Attorney, and to set some guidelines for the Attorney's actions. In the vast majority of cases, this works as it was supposed to.

Occasionally, even when there is an EPA in existence, there is still a need for a court-appointed trustee. For example, this could happen when the appointed Attorney passes away and the EPA doesn't name an alternate. It could happen when the court removes an Attorney and there is no alternate named, or the alternate isn't willing to act. It could also happen if the EPA itself is invalid or inadequate for the situation.

If the court appoints a trustee, that appointment supersedes any EPA that is in existence. If the EPA has been used at banks or other places, a copy of the court order appointing the trustee should be sent to each one, with clear instructions that the order replaces the EPA.

I posted earlier on revoking an EPA (in a situation other than using a court order) and if you'd like to read that post, click here.

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