“These can include things such as a lack of notice to the trustee of the BDBN, the failure to have two independent witnesses, not dating the BDBN, and using digital or electronic signing. It can also include the loss or destruction of the original, wet signed BDBN, revocation due to auto-lapsing provisions and the member and both witnesses not being present simultaneously when signing the BDBN.”

Correct documentation for incapacity is also crucial, he said, to ensure the effectiveness of other key personal estate planning documentation such as enduring powers of attorney (EPA), enduring powers of guardianship (EPG) and advance health directives.

“Each Australian jurisdiction has needed to establish tribunals that specialise in these areas to manage the volume of cases,” Burgess said.

“An example of the issues that can arise in relation to EPAs is the decision in NJ [2025] WASAT 35, which involved a person suffering a decline in cognitive ability, who had validly appointed an attorney under an EPA.”

The court heard that the attorney appointed later sought compensation for the work required, partly due to the impact the role was having on her employment, at which point the principal signed a new EPA appointing different attorneys.

“The second EPA did not expressly state it revoked the earlier document and the originally appointed attorney understood the later EPA had been invalidly witnessed,” Burgess added.

“There were also questions as to whether the attorney had the requisite capacity to make the second EPA. Both EPAs were crafted to start immediately on signing, as opposed to some later date, for example, on loss of capacity.”

He continued that in his experience, this approach was critical in this case, given the debate over an extended period about the principal's cognitive ability, which would have otherwise likely caused difficulties managing the principal's financial affairs throughout the process.

“In revoking both the first and second EPA and appointing an administrator to manage the principal's financial affairs, the tribunal confirmed that for a person (the donor or principal) to have the capacity to sign an EPA, the common law position is applicable,” Burgess said.

The ruling stated that the donor must be able to understand “… the nature and effect of the power: first, if such be the terms of the power, that the attorney will be able to assume complete authority over the donor's affairs; second, if such be the terms of the power, that the attorney will in general be able to do anything with the donor's property which he himself could have done; third, that the authority will continue if the donor should be or become mentally incapable; fourth, that if he should be or become mentally incapable, power will be irrevocable without confirmation by the court”.

“This means that the central concept is one of complete and lasting delegation to a particular person, albeit with the ability to put an end to the delegation while capacity to do so remains,” Burgess added.

“The second EPA was held to have been executed correctly, on the basis that the following requirements under the Western Australian Act were met. It should be remembered that each Australian jurisdiction has different witnessing requirements.”

The validity of the witnessing of the second EPA was despite the fact that the witnesses were the daughter and son-in-law of one of the new attorneys.

“The tribunal noted that while there were no restrictions on family members being witnesses to an EPA, the lack of an independent witness meant that if there was a contention about the donor's capacity, there would be no one outside the family that could give evidence,” Burgess said.

“The WA legislation did not provide for a new appointment under an EPA to revoke an earlier appointment, nor indeed how the donor of an enduring power of attorney can revoke an EPA, although the legislation does provide the tribunal with such powers.”

In law, the position is that a donor can revoke an enduring power of attorney, if they have capacity “to understand, when explained to [them] the authority given to [their] attorneys, and that, by signing the revocation document [they were] taking that authority away and the consequences of doing so”.

“A later EPA creates an inference that the donor intended to revoke the earlier EPA, despite immediate revocation not being the current position in Western Australia,” Burgess said.

“As the originally appointed attorney was on notice of the existence of the later document, at a minimum, they should have made their own inquiries about the status of the document to ensure they did retain legal authority and avoid being potentially personally liable for their actions purporting to rely on a revoked document.”

Furthermore, Burgess said, it was reasonable for the attorney under the first EPA to continue to act pursuant to that document, whose actions would only cause the attorney personal liability if they were acting dishonestly, in bad faith or without reasonable cause and which the tribunal accepted was not the case.

“The tribunal stated that it was a very stressful time for all concerned, including the originally appointed attorney. It also acknowledged the hospital caring for the donor had correctly identified that the EPG signed at the same time as the second EPA was invalid and stated its belief that the EPA was similarly invalid.”

“All attorneys under both documents believed that the second EPA was invalid. Finally, although the second EPA was ultimately held to likely be valid, it was also revoked as it mandated that the attorneys were to act jointly, which the tribunal held to be inappropriate given the amount of travel ­­– both interstate and overseas – of one of the attorneys.”