Enduring Power of Attorney (Financial)
By an Enduring Power of Attorney (Financial) a person appoints one or more attorneys to sign all kinds of financial documents, business legal and otherwise (but not medical), on behalf of that person.
This is particularly relevant if the person giving the power (the donor) subsequently is absent or becomes incapacitated either by reason of a physical or mental cause.
The authority conferred by an Enduring Power of Attorney (Financial) also extends to making decisions and doing all such things as are reasonable and necessary in relation to personal matters. Examples of personal matters are:
- Where and with whom a person lives;
- The persons with whom a person associates;
- Whether a person works and, if so, the kind and place of work and employer;
- Whether a person undertakes education or training, the kind of education or training and the place where it takes place;
- Daily living issues such as diet and dress;
- Health care matters, including matters provided for in Part 4A of the Guardianship and Administration Act 1986.
A person may be appointed as an attorney for another if that person:
- Is at least 18 years of age; and
- Is not an insolvent under administration; and
- If the person is to be an attorney for financial matters:
- has not been convicted or found guilty of an offence involving dishonesty; or
- if the person has been convicted or found guilty of an offence involving dishonesty, has disclosed the conviction or finding of guilt to the principal and the disclosure of the conviction or finding of guilt has been recorded in the Enduring Power of Attorney; and
- If the person is not a care worker, a health provider or an accommodation provider for the principal.
Powers of Attorney (generally)
It is a mistake to think that Powers of Attorney are only required for the elderly or frail. Accident, injury or illness can strike at any age or stage of life. We recommend that every adult should have properly prepared Powers of Attorney in place just in case.
A Power of Attorney can only be made by a person when that person is mentally competent to do so. If a sudden lack of capacity occurs, it is too late. In such situations it is usually a person's next-of-kin who must make application to the Victorian Civil & Administrative Tribunal (VCAT) for appointment as administrator and/or guardian of the affected person.
VCAT deals with these applications as informally and compassionately as the circumstances permit. However, an application to VCAT, particularly one that is opposed, can be a stressful and emotionally difficult process. This is particularly so given that the application is often made in the aftermath of an accident or health event that has caused substantial disability to a loved one.
VCAT will require the applicant to provide evidence (including medical evidence) in support of the application, to give notice of the application to all relevant persons and to attend a formal hearing. If more than one person applies to VCAT for appointment, the proceeding can be disputed and extremely stressful. Parties sometimes even require legal representation.
All of this can be avoided by ensuring that a properly prepared Enduring Power of Attorney (Financial) is in place before any accident, injury or illness occurs. An Enduring Power of Attorney (Financial) can also be useful when a person travels overseas and requires assistance with the management of their financial affairs whilst they are away.
Enduring appointments are important tools that allow people to choose who will make decisions for them. Choosing the right persons to make these decisions is critical. In the wrong hands, the powers conferred by these Powers of Attorney may lead to psychological and/or financial abuse. This is commonly known as elder abuse.
The individual dynamics of a person's family and other relationships need to be properly assessed and carefully factored into the drafting of these documents. Without experienced professional guidance a person may well finish up with a Power of Attorney that may have adverse consequences well beyond a person's expectations.
It is essential that instructions for the making of Enduring Powers of Attorney be given independently of persons who seek to benefit from them. Phillip Graham is experienced in assisting his clients to make the right choices for their attorney(s). Phillip's life experiences over more than 60 years and legal experiences over more than 40 years stand him in excellent stead to give considered advice.
Once completed, an Enduring Power of Attorney (Financial) needs to be properly signed and witnessed. The appointed attorneys are required to sign their acceptance of appointment. Then Graham Legal will prepare certified copies of the Power and provide detailed letters for the information of the attorneys regarding their legal responsibilities in acting as an attorney.
Most people understand the importance of making a proper Will. Yet, the powers conferred by a Will upon an Executor are often mistakenly thought to also apply in the event of total and permanent incapacity. That is not the case. The Executor's appointment does not become operative until death occurs.
A person who, for any reason, becomes incapacitated may require assistance for the rest of his or her life. The obligations of an attorney (to pay a person's bills and manage their personal and financial affairs), may last many years.
Every person's personal circumstances are different.
- It may or may not be reasonable for a person to appoint their most immediate next-of-kin as their attorney.
- It may or may not be reasonable to appoint multiple attorneys.
- If multiple attorneys are appointed, should they be required to act jointly, by a majority or should the signature of one alone be sufficient?
- Should one or more attorneys be appointed as alternate or substitute attorneys?
- What are the consequences if an Enduring Power of Attorney is made conditional upon a person being incompetent?
These are questions answered differently according to a person's individual needs and circumstances. There are advantages and disadvantages associated with each of these options. Phillip Graham is experienced in helping people make the right decisions about these issues.
A person's choice of attorney is critical. In some cases, the obligations of the attorney are extremely more onerous than those required of a person's executor. It has been said that the responsibilities of an attorney are the most onerous obligations known to the civil law.
We will ensure that your Powers of Attorney are properly prepared, signed and witnessed. We will also prepare certified copies of your Powers of Attorney together with letters addressed to your attorneys.
Our letters to a client's attorneys advise them of the important duties binding upon them pursuant to the Powers of Attorney Act 2014. Our letters even set out the relevant sections of the Act. There is no additional cost for the preparation of these letters.
In the first instance we send the certified copies of the Powers of Attorney (together with letters addressed to the attorneys) to our clients. If a client does not envisage any circumstance in the foreseeable future where they would want their attorney to sign any document on their behalf, we advise them to retain all certified copies of the Power (and our letters to the attorneys) until our client's circumstances change.