Things to think about when making your Enduring Power of Attorney
When you make an Enduring Power of Attorney you are officially appointing a person(s) to act on your behalf in relation to a variety of circumstances, such as for personal matters, financial matters or for specified matters.
In your Enduring Power of Attorney, you can also nominate when your Attorney’s powers commence, such as:
- Immediately on the making of the Enduring Power of Attorney;
- When you cease to have decision-making capacity;
- From the time, in the circumstances or on the occasion specified by you.
You are also able to specify, if you wish, certain conditions and/or instructions within the Enduring Power of Attorney that your Attorney must abide by. You should give thought to the various scenarios your Attorney may be faced with whilst operating under the Enduring Power of Attorney.
For example, we had a client who set up a bank account for funds which were meant to be spent only on her dogs. She provided those instructions in her Enduring Power of Attorney and also included which veterinarian her pets see so that her Attorney knew what to do if she lost decision-making capacity.
An Attorney has certain duties to their Principal. One duty is not to enter into a transaction where there may be a conflict between the duty of the Attorney to the Principal unless the Principal authorises the transaction. Another duty is that the Attorney must keep his/her property separate from the Principal’s property (does not apply to property owned jointly by the Principal and the Attorney or property acquired jointly by the Principal and Attorney in place of property owned jointly by the Principal and Attorney).
Attorneys are in breach of their duties to the Principal if they benefit from their appointment as Attorney (unless authorised by the Principal) and/or cause the Principal to suffer loss due to the Attorney’s contravention of any provision of the Powers of Attorney Act 2014.
Section 70 of the Powers of Attorney Act 2014 also states that “An Attorney under an Enduring Power of Attorney is not entitled to any remuneration unless it is specifically authorised by the Enduring Power of Attorney or by law”. If your Attorney is a lawyer, accountant or other professional then you may wish to include within your Enduring Power of Attorney that they be remunerated for their services as Attorney.
If your Enduring Power of Attorney does not provide, for example, any conditions or instructions on scenarios such as the giving of gifts, then the Attorney can give a gift of your property ONLY IF the gift is reasonable (having regard to all the circumstance and your financial circumstances) and ONLY IF the gift is to a relative or a close friend and is of a seasonal nature or for a special event (such as a birth or a marriage). The Attorney must keep a written record of the gift setting out the amount of the gift and the person to whom the gift was made if the total value of the gift was over $100.
You may, if you like, prescribe the amounts of money you would spend on gifts to certain people in your Enduring Power of Attorney such that the Attorney may be guided by your instructions.
If you lose decision-making capacity and become unwell, what instructions would you leave your Attorney in relation to your care? Would you want to live in your home for as long as possible or would you prefer to be cared for in a nursing home?
There would be a lower likelihood of a dispute over the Enduring Power of Attorney if you include clear instructions and conditions within your Enduring Power of Attorney.
Come and see us for further advice in relation to your Powers of Attorney. Call us at (03) 9555 7233.
This article provides information that is general in nature and is not a substitute for legal advice.