The need to have a Power of Attorney is illustrated in the factual scenario below:
On the 8th of July 2010 I met with my insurance agent Heather Elliott. In the course of our discussions she described a factual event that happened to one of her clients in relation to insurance cover which is extremely pertinent and is a confirmation of the need for clients to have a Power of Attorney.
The factual situation is as follows and consent has been given by all parties for this to be published – Heather’s clients would not like anyone else to suffer the same predicament:
A 51 year old man in business on his own account suffers a stroke. He was fully insured and because of the nature of his illness was able to make a claim under his trauma insurance for a reasonably substantial payout and his income protection insurance. His personal circumstances were that he had been previously married and had adult children of that relationship but had subsequently separated and now has an infant child with his new partner who is substantially younger. In a matter of days the insurance company was in a position to process and provide the insured with his cheque. The insurance company was able to process the application based on medical evidence all prepared and signed off by his Doctors and his partner. All that remained was the claimant’s signature (that is, the owner of the policy) on the ‘discharge’ form to transfer the funds from the Sovereign account into the insured’s account. In this case Sovereign required, for this step to occur, the signature of the owner (the stroke victim). They would not accept the partner’s signature. Unfortunately the claimant was not able to sign due to his illness.
The insured did not have a Power of Attorney.
What then occurred was a four month process to obtain the appointment of a property manager for the insured through the Family Court. This involved considerable time and angst in obtaining the appointment of the insured’s partner as the attorney which involved obtaining consents from the insured’s adult children and the insured’s siblings. The process was time consuming and expensive. In the meantime his partner, despite her duties in looking after their child, had to run the insured’s business, a task which was mentally and physically debilitating.
This is a salutary lesson as to the need for all persons, particularly those in business, to have in place an appropriate Enduring Power of Attorney particularly as it relates to property.