"Powers of Attorney" - financial controls & family affairs

Enduring Powers of Attorney

An "Enduring Power of Attorney" is often drawn up by a person seeking to take control of their affairs in anticipation of an overseas trip or before a medical procedure.  It is a legal document which enables a person to act as if they were another in legal or financial matters. They are called "enduring" as the appointment of the attorney continues beyond the legal incapacity of the donor.  Since 2004 in Victoria we have Powers of Attorney with specific areas of operation.  The main arenas are financial and medical.  Do you know what's involved as a donor? What are your duties if you have been appointed as an attorney? 

As we age, legal, financial, medical, ethical and emotional issues can converge.  Family members, advisers and caregivers can sometimes be in conflict over "what is best" and it is a useful control mechanism for  specific powers of attorney to be drawn to deal with practical matters after a person has lost their legal capacity.  We don't  have to be "old" to suffer a brain injury from a car accident.

Parents are living longer. The 85-and-over age group is the fastest growing in Australia, and more have dementia. They are staying at home longer, dependent on family care for extended periods. There are more children from those big, post-war families to wrangle over decisions: who is the primary carer, who has financial control, who is mismanaging Mum’s money, who isn’t pulling their weight ...And a parent’s death doesn’t end the fighting; the value of the parental home has increased so dramatically over the decades that more siblings consider it worthwhile going to court over the estate, destroying whatever skerrick of good will may have survived.  Read more here.

Adele Horin's article published on 3 March 2013 in the Global Mail (link above) deals with the increasing frequency of inter-familial disputes in circumstances where aged parents have dementia.  Adele has commenced a blog called "The Coming of Age" which you can read here.

Did you know:-

1. If you have appointed an attorney for financial purposes alone then that attorney cannot act on your behalf in relation to medical treatment and vice versa;
2. An appointment of an enduring power of attorney made prior to 2004 remains valid if it was made in accordance with the laws of the day; and
3. The Office of the Public Advocate recommends all people over the age of 18 appoint someone to be their attorney for both medical and financial purposes regardless of their age or health. Just as you should have a will, so should you have someone who can made decisions on your behalf if you are ever unable to do so yourself.

Leaving the details of medical powers of attorney alone, there are a number of important matters of which any adult should be aware in relation to Enduring Powers of Attorney (Financial).

1. Rules apply to the documentation associated with the appointment of the attorney - you should check that all the formalities have been complied with including witnesses and acceptance of the appointment.  There are three ways the appointment can commence - either from the date of the acceptance by the attorney to appointment, or on a specified date, or on a certain occasion such as when the donor loses capacity.  Medical proof may be required to trigger the appointment in the third instance.
2. Even though a financial attorney has no power over medical consent, s/he should arrange for the donor to give a consent form to the attorney (at the time of the appointment) that enables access to medical records and information about the donor's capacity.
3. It may be desirable for the attorney to know the details of the donor's will - for example where there is a disabled child requiring the preservation of a particular asset such as real property.  It's best to deal with this before the donor loses capacity because an attorney does not have a legal right to see the donor's will.  Also note that once a donor has lost legal capacity, the donor's will cannot be changed unless an order is made by the Supreme Court.
4. An attorney must  have or be able to find out information that will enable him/her to act in the donor's best interests.  It's a significant administrative role requiring knowledge about:-

• bank account details
• real estate details (titles, mortgages)
• shares and investment details
• safe deposit boxes
• motor vehicle details
• names of all professionals:- lawyer, accountant, doctor
• location of financial and legal records
• how to access records on a computer (logins, passwords, backup, security)
• insurance details
• income details and records
• special entitlements and government allowances
• any limitations, conditions or instructions the donor has specified in the power of attorney
• the donor's specific wishes regarding financial and legal affairs and lifestyle wishes with financial implications
• if there is to be more than one attorney - how the attorneys are to work together
• contact details of any enduring guardian or attorney (medical treatment)
• details of donor's will if relevant

Specific duties arise for attorneys which may not be avoided, such as the duty to act in the best interests of the donor and to keep accurate records and accounts of transactions and dealings.  Attorneys must keep their property separate from a donor's and must not overreach their powers according to the appointment.  Attorneys must not have a conflict of interest with the interests of the donor and when executing a document as an attorney, s/he must make a note that it is being executed as Name of donor, by his/her duly appointed attorney, Name of Attorney.  There are other broad duties of an attorney which are imposed by law such as to recognise the donor's right to participate in decisions as much as possible and to respect the donor's worth, dignity and human rights.

It is also relevant to know that some powers of a donor can't be exercised by an attorney, such as the right to vote, as these powers are personal.  Also, if the donor has been appointed by a third party to exercise a power, then that cannot be delegated to the donor's attorney.  For example, if a donor is an executor under someone's will, then this power cannot be exercised by the donor's attorney.

VCAT (Victorian Civil and Administrative Tribunal) has responsibility for powers of attorney, managed by its Guardianship List. It has powers to make determinations in relation to such powers.  This includes powers to require an audit of accounts or seek an investigation into the exercise of the power.  VCAT can also supervise, give advice, vary the effect of a power, declare what the powers are, revoke or suspend the enduring power of attorney.  It can also give permission for an attorney to resign.  Further  information can be found at www.publicadvocate.vic.gov.au

If you don't have an Enduring Power of Attorney (Financial) or Medical then you need to give these matters some thought and seek legal advice.  If you have been appointed as an attorney then you should be mindful of all your obligations and duties arising from this appointment.

Add these arrangements to conducting transparent conversations among family members about expectations surrounding aged care,  parent-to-child loans and lifetime gifts of cash and we suggest that far more families will operate harmoniously in the challenging circumstances of incapacity and death and the living relationships which endure.