Financial power of attorney in Australia explained: powers, duties and responsibilities
Have you been appointed as a financial attorney under a power of attorney, or are you considering appointing someone to act on your behalf?
A power of attorney (POA) allows a person to make decisions on your behalf while you still have decision-making capacity. An enduring power of attorney (EPOA) continues to operate if you later lose capacity to make decisions.
In Australia, powers of attorney are governed by state or territory-based legislation. This means the form, scope and witnessing requirements differ across the country.
Generally, all Australian states and territories recognise powers of attorneys that are validly executed under the legislation of another state or territory, provided the powers are similarly available under their own laws.
What decisions can a financial attorney make?
The types of decisions covered by a power of attorney very between state and territories. However, in all states, powers of attorney can be used to cover financial and legal decisions, including:
- buying and selling property or other assets;
- deciding how income should be invested;
- paying debts and expenses; and
- paying rates, taxes and insurance premiums.
A power of attorney can be revoked at any time, provided the person revoking it has the capacity to do so.
The powers granted under a power of attorney automatically end on the death of the person who made the power of attorney.
In most states and territories, if a person loses capacity and does not have an enduring power of attorney in place, a tribunal may appointment a financial manager to make decisions on their behalf. The person nominated could be a professional, a state trustee service, or a related person such as a sibling.
What are the duties of a financial attorney?
An attorney is required to:
act in best interests of the person who appointed them (appointer);
follow the appointers instructions while they still have capacity;
act according to any limits and conditions placed in the document;
not obtain financial benefit for themselves unless authorised to do so;
keep accurate records of all dealings; and
maintain confidentiality.
Things to consider if you’re appointing an attorney
Before appointing someone, you should consider:
what powers do you want them to have;
whether you want to appointment more than one attorney, and whether they should act jointly (agree and act together) or jointly and severally (agree and act together or act independently);
whether you have clearly communicated your interests and preferences; and
whether the proposed attorney is willing to take on this role and has the capacity to do so.
Things to consider if you’ve been appointed as an attorney
If you’ve been appointed, it’s important to understand:
whether your role begins immediately or only if the person loses capacity;
what are your responsibilities are;
which decisions you’re authorised to make; and
whether you are willing and able to take on the powers and have capacity.
Need advice about powers of attorney?
If you would like to discuss appointing an attorney, or if you have been appointed and want guidance on your responsibilities, our Private Clients Team can help. We regularly advise on powers of attorney and capacity-related matters across Australia and can assist you to navigate your options with confidence.
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