Enduring Powers of Attorney
An Enduring Power of Attorney is an important legal document whereby a person (called the Principal) appoints a person or persons (called an Attorney) to make decisions on their behalf in respect of financial, personal and health care matters.
The appointment should be one made to trusted persons, and before an appointee accepts, he or she should have carefully considered the appointment.
By accepting an appointment, the Attorney is acknowledging their various duties and responsibilities, as well as agreeing to exercise the powers conferred upon them according to law by the Enduring Power of Attorney document.
The Powers of an Attorney
Broadly speaking, subject to a few restrictions at law and any restrictions imposed under the Enduring Power of Attorney document itself, an appointed Attorney can do anything that the Principal could lawfully have done whilst he or she had decision-making capacity.
Responsibilities of an Attorney
An Attorney is in an important position of trust, and as such, has a duty to act in the best interests of the Principal.
In acting on behalf of a Principal, an Attorney must:
- Wherever possible, make the same decision that the Principal would have made in their position, by taking into account the Principal’s wishes, their known beliefs and values, and any directions they may have set out in the Enduring Power of Attorney document.
- Act honestly and with reasonable care. This may include:
- Paying bills on time;
- Ensuring the Principal’s property is appropriately insured;
- Lodging tax returns; and
- Ensuring that the Principal has accommodation, care and support that are appropriate for their needs.
- Act only in accordance with the terms of the Enduring Power of Attorney document.
- Keep their property separate from the Principal’s (unless it is owned jointly).
- Keep reasonable records of dealings and transaction made under the document.
- Avoid transactions that could bring their interests (or those of their relations, business associates or close friends) into conflict with those of the Principal, unless the Attorney is specifically authorised to enter into such ‘conflict transactions’ under the document.
- Not make any gift of the Principal’s money or property unless the Principal specifically allows the Attorney to do so in the Enduring Power of Attorney document.
- Not use the Principal’s money for their own benefit, or for the benefit of any other person, unless the Power of Attorney document specifically allows the Attorney to do so.
This is not an exhaustive list of the duties and responsibilities of an Attorney. If you have any concerns regarding the duties and responsibilities of an Attorney, suitably qualified legal advice should be obtained.
Consequences for an Attorney who fails to comply with their responsibilities
In the event that an Attorney fails to comply with his or her duties, the ACT Civil & Administrative Tribunal (ACAT) has the power to make appropriate orders, declarations and directions to protect the Principal, including removal of an Attorney.
Other matters to know about
Where multiple Attorneys are appointed (whether they are appointed to act together, separately, by majority or by some other mechanism) the Attorneys should consult with one another on a regular basis to ensure that the interests of the Principal are not compromised by a breakdown in communication between Attorneys.
Tetlow Legal recommends that Attorneys obtain a copy of the Principal’s will to ensure that any transactions the Attorney may enter into on behalf of the Principal do not undermine the terms of the Principal’s Will.
If you sign a document on behalf of a Principal, it should be signed in your name, with a note that you are singing the document as Attorney for the Principal.
Resignation by an Attorney
An Attorney may resign at any time by giving the Principal written notice of their resignation. If, however, the Principal is incapacitated, and there are no other Attorneys who have been appointed, then the Attorney may only resign with the approval of the Australian Capital Territory Civil & Administrative Tribunal (ACAT).
In light of the potentially onerous duties with which Attorneys must comply, as well as the potentially severe consequences of failure to comply with those duties for both the Attorney and the Principal, it is prudent for an Attorney to obtain suitably qualified legal and financial advice before making any significant decisions on behalf of a Principal.
If you are an Attorney and wish to find out more about your rights and responsibilities under a Power of Attorney document, please do not hesitate to contact either Brian Tetlow or Emma Bragg at (02) 6140 3263 or [email protected] to discuss.