Have you agreed to act as an Attorney under an Enduring Power of Attorney? What does this mean? Our response to some "frequently asked questions" gives some insight into your role:
1. How was I appointed? When does my appointment commence?
A family member or friend ("the Principal") will advise that they have appointed you to be their Attorney under a document known as an Enduring Power of Attorney ("EPA"). (For more information on EPAs, see our blog: Planning for the unknown)
If you wish to accept the appointment, you must sign a Statement of Acceptance that is part of the EPA document where required. The EPA will say when your appointment starts. It might be when the Principal loses capacity, or it might be on the date the EPA is signed by the Principal. If you are not sure, ask us.
2. What can you do once you are acting as an Attorney?
The EPA will say what you can do. You might be authorised to do anything that the Principal can lawfully do (see some exceptions below), or your actions may be limited to specific personal and/or financial matters.
3. What can't you do as an Attorney?
When acting on behalf of a Principal, you cannot:
- Make, amend or revoke the Principal’s Will or Enduring Power of Attorney;
- Vote as or for the Principal in local, State or Federal elections or referendums;
- Consent to the Principal’s marriage (or dissolution of marriage);
- Consent to the Principal entering a sexual relationship with another person;
- Make decisions in relation to the care and wellbeing of the Principal's children, or any adopted or surrogate child of the Principal; or
- Consent to an unlawful act.
4. What are your duties as an Attorney?
When you act as an Attorney you must act honestly and in good faith while exercising reasonable skill and care. Unless the EPA specifically authorises you to be paid (see below), you cannot profit from acting as an Attorney. You must be careful to avoid acting in conflict with the best interests of the Principal.
When managing the Principal's finances, you must keep an accurate record of their income and any expenditure. You must also be careful to ensure that you do not "mix" your money with the Principal's money, even if you are keeping clear records of the transactions.
You may be asked to make gifts on behalf of the Principal- a common occurrence in everyday life. Gifts to the Principal's family and friends for special occasions (such as birthdays and marriage) are generally considered appropriate; however, you should be careful to ensure the cost of the gift is reasonable in all circumstances and reflective of the Principal's past giving.
5. When does an Attorney's authority come to an end?
Your authority ends upon the first of the following:
- The death of the Principal;
- Revocation of the EPA by the Principal;
- Your formal resignation; or
- Revocation or suspension of the EPA by the Victorian Civil and Administrative Tribunal ("VCAT").
6. Do you get paid for being an Attorney?
Generally, no. However, there are some circumstances the Principal may elect to include a clause in the EPA directing you be paid for your time in effort in acting on their behalf. If this is the case, the EPA will detail the terms of payment.
Additionally, the EPA may permit you to receive some indirect benefit provided your actions are still in the best interests of the Principal, but this will only be possible in very specific circumstances.
7. When things go wrong…
There are serious consequences if you are acting as an Attorney and are deemed to have acted inappropriately or in breach of your duties. VCAT has jurisdiction to hear a wide range of issues in relation to EPAs. It can make determinations as to the validity of EPAs, the decision-making capacity of a Principal, and can revoke or suspend EPAs. In some circumstances, VCAT may remove an Attorney and appoint an independent Administrator.
8. If in doubt…
If you have concerns about your obligations or scope of decision making authority as an Attorney, or the actions of another Attorney, we recommended you seek legal advice to consider your options.
If you have any questions after reading this article or would like to understand more about your responsibility if you have been appointed as a Power of Attorney please don’t hesitate to contact our Wills & Estates lawyers today on +61 3 9822 8588.
