In the fourth part of this series, we look at the role of the attorney in your Enduring Power of Attorney.
An attorney is the person appointed by you to act on your behalf and make decisions in your best interests whilst you are alive. The attorney’s role is powerful and your attorney should be someone you intimately trust with your financial and personal (including health) matters.
An alternate attorney may also be appointed to act if the first attorney cannot act or continue to act for any reason (e.g. death, incapacity or bankruptcy).
The attorney and alternate attorney are usually the same people as your executor and alternate executor. Couples usually appoint their spouse as first attorney.
In planning for how you wish for your financial and person/health decisions to be made, there are several options available as to how your attorneys must make decisions on your behalf.
You may wish to appoint joint attorneys to make decisions on your behalf. However, as it is not always convenient for attorneys to get together, ie, if an intended attorney resides overseas, allowing joint attorneys to act severally is often the better option (that is, any one of them may act alone).
You may also wish to appoint different attorneys to act for you in respect of your financial and personal/health matters. For example, you may wish for your spouse to make financial decisions on your behalf and for your parents and siblings to make personal/health decisions on your behalf.
There are also options for when your attorney’s power to make financial decisions begins. While the most common scenario is to allow for your attorney’s power to begin immediately, we recommend that unless there is a pressing reason for that to be the case, the power to make financial decisions on your behalf should only operate when you do not have capacity to make those decisions and a doctor certifies that is the case.
By default, for personal/health matters, your attorneys' power to make decisions does not begin until (if ever) you do not have capacity to make those decisions and a doctor certifies that is the case. There is no ability to alter that.
General terms and instructions for your attorney are also usually given including permitting your attorney to enter into transactions that may bring their interests into conflict with your interests. For example such a clause can allow your attorney to buy your car without getting a market value, or to sell the family home in order to assist in paying for your care in a nursing home.
Other terms can include authorising your attorney to be reimbursed for any costs and expenses incurred in carrying out their duty as attorney, signing binding death nominations to the trustee of any superannuation fund (limited to the most recent binding death nomination that you signed or to your spouse) and directing that your attorney act as replacement trustee/appointor of any trust (so your trust is not left without someone in control should you lose capacity).
You may also wish to give directions to your attorney about any personal wishes you have, such as "I want to remain in my home with home help and nursing for as long as possible".
It is a sad fact in some cases, that an abuse of the power by an attorney can result in losses to your estate which may be impossible to recover, and it is important that what powers are given and when they begin are considered carefully and discussed.
While we appreciate there is a lot to get through during the difficult task of planning how your Enduring Power of Attorney should operate, we are professionals who have done this many times, and are happy to assist throughout the entire process to make it as easy as possible.
To discuss an estate plan for your individual circumstances and answer any queries you may have, please contact Tracy Pratt, Lawyer from our Wills, Estates & Trusts team for a free initial consultation on 07 3220 1144 or email.
The information in this blog is intended only to provide a general overview and has not been prepared with a view to any particular situation or set of circumstances. It is not intended to be comprehensive nor does it constitute legal advice. While we attempt to ensure the information is current and accurate we do not guarantee its currency and accuracy. You should seek legal or other professional advice before acting or relying on any of the information in this blog as it may not be appropriate for your individual circumstances.