Have you been appointed power of attorney for someone? everything you need to know!

Have you been appointed Power of Attorney for someone? Here is what you need to know about what your role is as Attorney.‍ ‍

Have you have been appointed as a someone’s Attorney under a Power of Attorney? If so, can you simply start acting in your role as Attorney?  Not quite. Here’s why.‍ ‍

A Power of Attorney is a powerful legal document, giving an Attorney legal authority to stand in the shoes of the principal, but it does not give you unlimited power.  Before you can commence acting, you need to confirm that the document is valid, that your appointment has taken effect and that the particular power you want to use has started.  Let’s find out more about the steps you need to take before you commence acting as an Attorney and your obligations once you start acting.‍ ‍

What type of Power of Attorney is it? ‍

Before an Attorney can even start acting, they need to confirm the type of Power of Attorney it is. This is important because not every Power of Attorney works in the same way. There are two different types of Powers of Attorney:‍

• An Enduring Power of Attorney. This may cover financial matters, personal matters or both.  It continues even if the principal loses decision making capacity. That is why it is called enduring, because it endures the incapacity of the Principal.
• A General Non-Enduring Power of Attorney. This covers financial matters for a stated period, circumstance or purpose.  It does not operate while the principal lacks decision making capacity.

So that’s step one.‍ ‍

The Power of Attorney will outline what powers you have and can include things such as:‍ ‍

• Whether you are appointed in relation to financial matters, personal matters, or both, and whether your appointment is limited to any specified matters.‍ ‍
• Whether there are any limits, conditions or instructions on your use of the power.‍
• When your power is intended to start.‍ ‍
• Whether another Attorney has also been appointed.  If other Attorneys have been appointed, whether you must act jointly and severally, or by majority.‍
• Whether you are the primary Attorney or an alternative Attorney and what must happen before anyone can act.

I have been appointed as Power of Attorney, can I start acting immediately?

For an Enduring Power of Attorney to be effective, you must sign the statement of acceptance in the prescribed form. Your signature must be witnessed by an adult witness who is not the Principal or any other Attorney (primary or alternate) appointed within the Power of Attorney.

By accepting, you confirm that you;‍ ‍

• are eligible to act as an attorney;‍ ‍
• understand your obligations; and‍‍ ‍
• undertake to comply with the Powers of Attorney Act 2014.‍ ‍

You cannot commence acting in your role as Attorney until you have signed the Statement of Acceptance.

‍ To be eligible to act as an Attorney, you must:‍ ‍

• ‍ Be over the age of 18 years old;‍ ‍
• ‍ Must not be a carer or nurse for the principal or have a professional relationship with the Principal that could be a conflict of interest;‍ ‍
• ‍ Must not be under financial administration or an undischarged bankrupt;‍
• ‍ Must not have been found guilty of an offence of dishonesty unless it is disclosed to the Attorney and noted on the Statement of Acceptance;
• ‍ Must sign a Statement of Acceptance confirming you will act in the best interests of the principal and in accordance with the act.

‍Once you have signed the statement of acceptance, you must identify when or in what circumstances you can act. The Enduring Power of Attorney may state that your authority starts in any of the following circumstances:‍ ‍

• Immediately. If your authority commences immediately, you may act once the enduring power of attorney has been validly made and you have signed the required statement of acceptance.  It is important to note however that whilst the principal retains decision-making capacity, you must act only under the direction of the principal.  Immediate commencement does not transfer exclusive control to you.
• When the Principal no longer has decision making capacity. A bank, aged care provider, government agency or other person may ask for evidence that the principal lacks decision making capacity for the relevant matter. It is crucial that you obtain a professional medical opinion in relation to the principal’s capacity and not determine this by yourself.
• At another stated time, circumstance or occasion. The Enduring Power of Attorney may state how the Principal’s capacity it to be determined, for example, by two medical practitioners certifying the Principal no longer has capacity to manage their own affairs. It is important to obtain this certification in writing and keep a record of this.‍ ‍ ‍
• On a specific date. This is self-explanatory and means you can only act from that date onwards. ‍

If the document does not specify a starting point, the act provides that the power is exercisable form the making of the enduring Power of Attorney. That means, it starts as soon as the Power of Attorney is legally made.‍ ‍ ‍

You also need to check what types of matters you have authority to act in, such as financial matters, personal matters or both.‍

‍Financial matters include handling the principal’s finances such as:‍ ‍

• Managing bank accounts; ‍
• Paying bills or debts;‍ ‍ ‍
• Buying or selling properties or assets;‍ ‍ ‍
• Dealing with shares or investments;‍ ‍
• Getting tax returns completed;‍ ‍‍ ‍
• Dealing with pensions or Centrelink.‍ ‍‍ ‍

Personal matters include handling non-financial matters for the principal such as:‍ ‍‍ ‍

• Assisting with accessing aged care services;‍ ‍‍ ‍
• Assisting with accommodation;‍ ‍‍ ‍
• Assisting with transportation to appointments;‍ ‍‍ ‍
• Lifestyle decisions.‍ ‍‍ ‍

I have a Power of Attorney made, but what do I do with it?‍ ‍‍ ‍

Powers of attorney are not recorded on a public register.  Keeping the original secure is the best way to protect you.  Using certified copies where possible will help ensure the original is kept safe and not given to anyone. ‍ ‍ ‍

What happens if your original Power of Attorney is lost? ‍

If you misplace your original Power of Attorney and something happens to you, your Attorney’s will be unable to act and may be required to apply to VCAT (Victorian Civil and Administration Tribunal) for an Administration order. This means that VCAT will determine who your administrator will be and what they can do. VCAT’s decision may not reflect your wishes. ‍

‍I am a Power of Attorney for someone, what do I need to do when handling matters for the Principal?‍ ‍‍ ‍

As Attorney, you must keep accurate records of everything that you do. For financial matters, you must keep the principal’s money and property separate from your own, except for property that is already jointly owned. ‍ ‍‍ ‍

Things to consider doing to assist you in ensuring you comply with your legal obligations include things such as: ‍ ‍ ‍

1. Keeping a record of the principal’s wishes and participation.‍ ‍‍
2. Keeping a decision log recording what was decided and why.
3. Keeping a copy of all invoices, receipts, bank statements and correspondence.‍ ‍

Ensuring you keep good records, protects you in your role as Attorney if your decisions are ever questioned or concerns are raised.

What duties apply to an Attorney once you start acting?

‍Being an Attorney is not simply helping out informally.  It is a legal role.  You must:‍ ‍

• Act honestly, diligently and in good faith.‍
• Exercise reasonable skill and care.‍‍ ‍
• Avoid conflicts of interest unless properly authorised.‍
• Not use the position for profit unless remuneration is authorised.‍ ‍
• Protect confidential information.‍
• Keep accurate records and accounts
• Understand it is a fiduciary duty which means you need to act in the best interests of the principal and are accountable to the Principal
• Remember the principal does not lose their right to make decisions because an Enduring Power of Attorney exists.  Whilst the principal still has capacity, an Attorney must act under direction on the Principal.

Can an Attorney provide themselves with gifts or benefits?‍ ‍ ‍

Your role of Attorney is a role you accepted to undertake without compensation. In limited circumstances an Attorney may be able to provide gifts or benefits to themselves however it is best to obtain legal advice first before doing so. The giving of gifts is also controlled by the Act and by any conditions in the Power of Attorney document. ‍ ‍

A transaction that benefits you, your relative, a business associate or a close friend will create a conflict, even when everyone believes it is sensible, unless you have acted under the direction of the principal. It is therefore crucial to ensure you obtain legal advice and only act under the direction of the principal in relation to conflict transactions. ‍ ‍ ‍

Do not assume that a history of informal family arrangements makes the transaction lawful.  If you are unsure what you can and cannot do as Attorney, obtain legal advice first. Before transferring money, changing ownership, paying yourself, making a substantial gift, selling property to someone connected with you or allowing someone to live in the principal’s property on special terms ensure you are legally informed of your obligations. ‍ ‍ ‍

When should you obtain legal advice? ‍ ‍

You should obtain advice if:‍ ‍

• the Power of Attorney document is incomplete or unclear, was made interstate or overseas, or is an older document, as the laws that apply may be the ones relevant when it was entered into by the Principal.
• There is a doubt about whether the power has started.‍
• The principal’s capacity is disputed or uncertain‍
• Attorneys disagree on a decision.‍
• A proposed transaction may benefit you, or someone connected with you.‍
• You are dealing with real estate, a business, trusts, litigation or a significant gift.‍
• An organisation refuses to recognise the document.‍
• There are concerns about an Attorney not acting in the best interests of an Attorney.

‍Need help before you start acting?

‍If you are Attorney for someone and want to ensure you are fulfilling your legal obligations, contact us today. A review of the Power of Attorney document can clarify when your authority begins, what you may do and what steps should be completed before the first transaction.  We also provide guidance on the best way to handle situations so that you do not put yourself at risk. If you would like assistance, contact our firm on (03)97071155 or email admin@wslegal.com.au. ‍