Guide for Attorneys exercising a Power of Attorney
Accepting the role of and Attorney under a Power of Attorney or an Enduring Power of Attorney is an important matter not to be taken lightly. The responsibilities are serious and if you fail to observe these responsibilities, you could be removed as attorney or even convicted of an offence and required to pay compensation.
Besides the particular responsibilities mentioned in the power of attorney document, there are responsibilities imposed by the various State acts such as the Powers of Attorney Act 1998.
The Queensland Powers of Attorney Act provides a useful guide for the prospective attorney and is set out in general below. These general principles are fundamental and applicable to attorneys in all jurisdictions.
What are these responsibilities?
They are both general and specific.
General responsibilities (to guide you in decision-making) .
You must exercise the power given to you honestly and with reasonable care. It is an offence not to do so, and you may also be required to compensate the principal.
You must comply with the terms of the enduring power of attorney, the State legislation and any other Court requirement. In addition, you must abide by any general and health-care principles on which the Act is based.
General principles include:
- presuming that the principal has the capacity to make a particular decision until there is conclusive evidence that this is not the case;
- recognising his/her right to participate in decisions affecting his/her life, to the maximum extent for which he/she has capacity;
- respecting the principal’s human worth and dignity and equal claim to basic human rights, regardless of his/her capacity;
- recognising the principal’s role as a valued member of society and encouraging his/her self-reliance and participation in community life;
- taking into account the importance of the principal’s existing supportive relationships, values and cultural and linguistic environment;
- ensuring that your decisions are appropriate to the principal’s characteristics and needs;
- recognising the principal’s right to confidentiality of information.
The health-care principles is:
Any health-care decision you make for the principal must:
- maintain and promote the principal’s health or well-being or is in all the circumstances in the best interests of the adult;
- be made in the way that is least restrictive of the principal’s rights;
- where possible, take account of the principal’s views and wishes, along with information given by the principal’s health-care provider.
Any investments you make on the principal’s behalf while he/she lacks the capacity to make financial decisions must be those that are named in the Trusts Act as investments that a trustee is authorised to make.
Note: Reference to Court includes the Supreme Court or the State’s Guardianship and/or Administration Tribunal.
For all decisions
If the principal has other attorneys, you must consult with them regularly and make your decisions as directed in the sections ‘How decisions are made’. If you are a joint attorney, for example, you and the other attorney/s must make your decisions unanimously.
- Duty to keep records. If you have the power to make financial decisions, you must keep reasonable records of dealings and transactions made under the power. It is an offence not to do so, and the Court or State Guardian/Trustee may require you to produce them.
- Duty to keep property separate. You must keep your property separate from the principal’s property unless you and the principal own the property jointly.
- Duty to present a management plan and get approval for unauthorised transactions. If you make a financial decision, you must present a plan of management to the Court if the Court requires it. If the principal’s capacity to make decisions is impaired, you must also get approval from the Court for any transactions that have not been authorised in this document.
- Duty to avoid transactions that involve conflict of interest. You must not enter into transactions that could or do bring your interests (or those of your relation, business associate or close friend) into conflict with those of the principal. For example, you must not buy the principal’s car unless you pay at least its market value.
- However, you may enter into such a transaction if it has been authorised by the document or by the Court, or if the transaction provides for the needs of someone that the principal could reasonably be expected to provide for, such as his/her child.
- Duty in relation to gifts. You must not give away the principal’s property except where the principal would be likely to do so, for example as a marriage gift to a relation of the principal or a donation of to his/her favourite charity (so long as the size of the gift is reasonable in the circumstances).
- Power to maintain the principal’s dependants. You may give reasonable maintenance to the principal’s dependants.
How do I complete a document for the principal?
If you have the power to execute (complete) a document for the principal, you do so in the ordinary way, but you must note on the document that you are executing it as the principal’s attorney under enduring power of attorney (e.g. ‘John Smith, by his duly appointed attorney, Mary Jones’).
When does my power to make decisions begin?
The document should generally indicate when the power is to commence or in what circumstances it will commence. It also depends whether the power concerns personal/health matters or financial matters.
- Personal/health matters. Your power to make decisions for the principal about personal/health matters does not begin until (if ever) the principal is incapable of understanding the nature and foreseeing the effects of the decision, and of communicating that decision. However, you must continue to allow, and assist, the principal to make decisions in so far as he/she is capable.
- Financial matters. The principal may nominate in the document when your power to make financial decisions begins. If the principal does not nominate a date or occasion, then your power begins immediately.
When does my power end?
Though there is no time limit on enduring power of attorney, certain actions by you, the principal or the Court can bring your power to an end. In personal/health matters, your power also ends if the principal regains the ability to make the decision in question.
- Your withdrawal. So long as the principal is capable of using the power given to you, you can withdraw by giving him/her a signed notice or by getting the Court’s leave to withdraw.
- Becoming the principal’s paid carer or health-care provider. If this happens, your power is revoked.
Note: ‘Paid carer’ does not mean someone receiving a carer’s pension or similar benefit.
- Becoming incapable. Your power is revoked if you become incapable of understanding the nature and foreseeing the effects of a decision, and of communicating that decision.
- Becoming bankrupt or insolvent. If this happens, your power is revoked.
- Your death.
The principal’s actions
- Revoking your power. The principal may revoke your power at any time, so long as his/her capacity to make the decision is unimpaired. In other words, so long as the principal has the capacity to make an enduring power of attorney, he/she also has the capacity to revoke it. If the principal revokes your power, he/she must inform you in writing.
- Appointing a new attorney to have your powers. If the principal completes a new document giving your powers to another attorney, your powers are revoked to that extent. Because the new document has a later date, it overrides the first.
- Getting married. If the principal marries, your power of attorney is revoked unless you are the principal’s new spouse. (If you are the principal’s new spouse, the only power that is revoked is the power of any other attorney that the principal may have.)
- Getting divorced. If the principal divorces and you were the principal’s former spouse, your power of attorney is revoked.
- The principal’s death. If the principal dies, your enduring power of attorney is revoked in its entirety.
Actions by the Court
Your power may also be changed or revoked by the Court if you have failed to act in the principal’s interests.
Can I be held liable?
Yes, if you use the enduring power of attorney knowing that it has been changed or revoked, or knowing of an event that effectively revokes it, or even if you have reason to believe that it has been revoked.
The Court and the State Guardian/Trustee have the power to protect the principal’s interests. You may be required to produce a summary of receipts and expenditure or more detailed accounts, and these may be audited. You may also be required to give evidence in relation to the exercise of your powers. If the Court or State Guardian/Trustee believes that you have not adequately protected the principal’s interests, you may be removed or your enduring power of attorney may be revoked and you may be required to compensate the principal.
Where can I go for advice?
The Court, the Adult Guardian, the Public Trustee, or a solicitor can advise you about the document and your power and responsibilities under it. The Court can also make a declaration about the validity of this document or whether your power to make a decision for the principal
has begun. There are occasions where a particularly difficult issue may be referred to the Court for Judicial advice.
Source Information attribution