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EPOA crucial for SMSFs, says professional adviser

An enduring power of attorney is crucial for ensuring continuity and compliance, says a professional adviser.

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Grant Abbott, LightYear Group chair, director, and founder, said when considering the importance of an enduring power of attorney (EPOA) in Australia, it's vital to understand its role and implications.

“For SMSFs in particular, it allows the nominated person to step into the trustee’s shoes if they are incapacitated, ensuring the continuity and compliance of the SMSF,” he said.

 

Mr Abbott said there are five key reasons for anyone – not just those with SMSFs – to have an EPOA.

“Imagine a situation where an adult daughter has a severe accident and is incapacitated. Her parents, attempting to manage her finances, approach her bank for assistance,” he said.

“Without an EPOA in place, the bank is unable to comply due to legal constraints. This scenario highlights the critical need for an EPOA.”

Without an EPOA, SMSFs can face a number of practical and legal barriers, he said.

“As illustrated in the case above, there is the inability of the bank to act on behalf of the incapacitated daughter which demonstrates the challenges and delays that can arise in managing essential financial affairs,” he said.

“This is crucial in cases of sudden illness or accidents, ensuring that bills, loans, and investments are handled properly.”

Second, an EPOA will also allow a nominated person to make medical and lifestyle decisions.

“Beyond financial matters, an EPOA can cover health and lifestyle decisions, ensuring that one's personal wishes are respected and followed,” he added.

They will also allow for legal recognition across all states and although in Australia they are state-based, Mr Abbott said EPOAs are generally recognised across different states, which is important for individuals with assets or interests in multiple locations.

“They can also safeguard against abuse, and having a formal EPOA can protect against financial abuse,” he said.

“By choosing someone trusted, one ensures that their affairs are managed ethically and responsibly.”

He concluded that an EPOA is a vital legal tool that ensures an individual’s financial and personal matters are managed according to their wishes, even when they are unable to do so themselves.

“It provides peace of mind, not just for the individual, but also for their family, knowing that there's a plan in place for unforeseen circumstances,” he said.

“As such, it is a crucial element of financial and personal planning in Australia.”

 

 

 

Keeli Cambourne
28 November 2023 
smsfadviser.com


David Forrest Download David's Advisor Profile

David Forrest

Director
BEc (Acc), MBA, CPA, FFin

David has been in the Financial Services Industry for nearly 30 years. He was one of the founding Directors of the successful Financial Planning and Stockbroking Practice, Henderson Gregory Forrest, for a decade. Prior to that, he held senior roles in companies such as ING, KPMG Accountants and AMP. David was previously Chairman of OAMPS Superannuation Trustee Board and currently serves as an independent Board Director for several companies.

David’s extensive experience in all forms of superannuation, including Self Managed Super Funds (SMSF), Defined Benefit Funds, retirement funding through Account Based Pensions, stockbroking with a focus on Direct Share Investment, Taxation/Remuneration Planning, Centrelink, Aged Care and business management, equip him to advise expertly on all aspects of Financial Advice.

Those with a particular interest in superannuation/SMSFs, direct share investment, salary packaging or applying for the Centrelink Pension will find his knowledge and ability in formulating and implementing creative, logical and simple wealth creation strategies a valuable asset.

David maintains a strong personalised client service focus, providing tailored solutions for clients.

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David Forrest is an Authorised Representative of Integrity Financial (SA) Pty Ltd ABN 16 133 921 187 — AFSL No 334846

Michelle Forrest

Michelle Forrest

Business Finance Manager
B Bus (Acc), CPA

Michelle’s career has spanned across the Financial Services, Retirement Living and Aged Care industries working in the private sector, not for profit and more recently with the state government for over 20 years. Her experience extends to many facets of the financial services industry, having worked in superannuation administration, technical support and financial planning practice administration.

Commencing with AMP and subsequently working in commerce and accounting roles with companies such as Brambles, Adelaide Bank Retirement Services, ECH Inc and SA Health and Wellbeing, Michelle returns to financial services after working in practice financial management at Henderson Gregory Forrest. This wide range of experience from senior accounting and management roles has provided Michelle with a strong background in business administration.

With an astute financial acumen and keen interest in business improvement strategies, Michelle ensures the smooth running of the Integrity Financial Advisory practice providing valued management support to our personalised client service focus.

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Jasmine Smith

Jasmine Smith

Client Service Manager

Jasmine has worked in the financial services industry for over 12 years in all areas of client administration, working with David since 2013.

Jasmine has extensive knowledge and experience in client service including implementation of advice, portfolio reporting, assisting with the establishment of Self Managed Super Funds (SMSFs), term deposit management and a long history of helping clients with their enquiries.

Jasmine’s attention to detail, yet gentle approach, means she is able to solve the trickiest of questions for our client community.

Jasmine has gained her Certificate III in Financial Services qualification.

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Merrilyn Smith

Senior Client Service Manager

Merrilyn has worked in the financial services industry for over 11 years in all areas of client administration, and is a new addition to our client services team, returning from Melbourne to join the team in June 2019.

Merrilyn has extensive knowledge and experience in client service including implementation of advice, managed fund administration, assisting with the establishment of Self Managed Super Funds (SMSFs) and process improvement for the previous practices she has worked with. Merrilyn’s experience with direct shares constitutes the other part of our administrative support for direct equity investments.

Merrilyn’s warm and caring nature continues to endear her to our clients and she has already established herself as a valued member of our team.

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