What does appointing someone your enduring power of attorney mean?
It means you are appointing an alternative decision maker to assist you in making decisions about your property and financial affairs. It is a position of trust.
The person you appoint needs to make decisions in your best interests. They should not benefit in any way from any decision they make.
The attorney can do anything you can do.
This means they can transfer or sell your property. They can mortgage your property. They can lease your property.
They have full access to your money. They can pay your bills. They can make financial decisions. They can invest your money, buy and sell shares, open and close term deposits.
They can change your superannuation binding death benefit nomination. They cannot change your will.
Clearly they are a position of trust. You should always ensure the person is someone you trust. If there is potential for conflict, appoint two people jointly.
How can I avoid someone abusing a power of attorney?
As the position of attorney is very powerful, you should only ever appoint someone you have confidence and trust in. Usually this is your spouse.
When appointing other people your attorney, such as your children, a neighbour, a friend, accountant or anyone, you should consider introducing safeguards in order to protect your interests. We recommend you seek advice.
Some safeguards include appointing two people jointly; not granting additional powers and only having it come into effect if you have a doctor prepare a medical certificate stating that you are incapable.
I am appointed someone’s attorney – what can I do?
You are authorised to act on their behalf in respect of their financial and property matters.
If the person who appointed you still has capacity, you should not do anything without their express instructions.
You should allow the person to act as independently as possible, and only operate their bank accounts if they are unable to do so themselves. You should not use the person’s debit card or request for their PIN. You should not use their internet banking access. Instead, you should liaise with their bank and be set up properly as the attorney on their account, so you are issued with your own debit card (if necessary), and given separate internet banking access.
You need to keep records. Record every transaction and keep receipts.
You must keep their money separate from your own. This is why we recommend obtaining your own access to the accounts if necessary and not use the persons’ whose account it is.
You must act in the person’s best interests and not your own.
If you think the person is giving away money or engaging in transactions they should not be, you have a duty to prevent them, or at least ensure they obtain proper advice.
You must not benefit in any way from any decision made under the power.
You cannot receive any direct or indirect benefit, unless a specific additional power has been granted in the instrument. If there is a need for you to make a decision which means you will receive a benefit – you should seek advice. Sometimes it may be necessary to obtain Court approval for decisions. It is much better to obtain approval then go through expensive litigation after the fact for allegations of breach of fiduciary duty or undue influence.