The usefulness of Enduring Powers of Attorney cannot be underestimated, and should be considered as part of any estate or business planning exercise. But what is an enduring power of attorney, how are they made, and should you agree to be an attorney? This article sets out the basic framework for the instrument. In a future article we will give examples of where things can go wrong. What is an Enduring Power of Attorney? An Enduring Power of Attorney is a document whereby an adult (called “the principal”) authorises one or more people (“eligible attorneys”) to do things in relation to certain financial or personal matters for them, those being things that the principal could do by an attorney if they had capacity when the power is exercised. In Queensland, Enduring Powers of Attorney are created under the Powers of Attorney Act 1998 (“The Act”). Unlike a General Power of Attorney, an Enduring Power of Attorney continues to be effective if the principal suffers from impaired capacity for the matter (eg is temporarily or permanently unable to make the decision for themselves). Also the powers are to some extent identified as “financial matters” and “personal matters”, with different people quite often being appointed for the respective categories. Who can be the attorney? To qualify as an eligible attorney, by section 29 of the Act, the attorney must be a person who: The Public Trustee or a trustee company under the Trustee Companies Act 1968 may be appointed, and for personal matters, the public guardian may be appointed. The power of attorney can be in respect of financial matters (ie relating to the principal’s financial or property matters) and for personal matters which is defined as being a matter – other than a special personal matter or a special health matter – relating to the principal’s care including their healthcare or welfare. Schedule 2 to the Act sets out examples of what a personal matter might include. A special personal matter (ie something that cannot be done by an attorney) is a matter that is listed in section 3 of Schedule 2 to the Act, including matters such as making or revoking a will, making or revoking a power of attorney, voting, and a number of other matters of personal significance. Special health matters (ie which an attorney cannot agree to for the principal). Capacity to make an Enduring Power of Attorney By section 41, a principal has the capacity to make an Enduring Power of Attorney only if they are capable of making it freely and voluntarily, and understand the nature and effect of the power of attorney, including understanding that: This brings about important issues concerning powers. Sometimes principals make enduring powers of attorney to commence immediately, for various reasons. This means that the power of attorney exists while the principal remains able to do the things for themselves. If this occurs however, the attorney should not act inconsistently with the wishes of the principal while they have capacity. But then there can be questions as to whether the principal has lost capacity, and if that capacity was lost, then there can be questions about whether or not the principal regained capacity. If the attorney is only to commence when the principal loses capacity, then in most cases, the power will cease if and when the principal regains capacity. Attorneys should be careful to ensure that there is evidence that the power has commenced, as they will be acting without authority if the attorney only commences when the principal loses capacity, and evidence demonstrates that capacity was not lost. Revoking or ending an Enduring Power of Attorney The power of attorney can be revoked by the principal at any time if the principal has the necessary capacity to make a new power of attorney for the particular power. Revocation of an Enduring Power of Attorney must be in the approved form, except to the extent that the power of attorney gives power for a health matter, which need not be an approved form. Revocation is also effected by: When an attorney’s power ends, if the attorney was a joint attorney for the matter, then the remaining attorney or attorneys may continue to exercise the power. Form of Power of Attorney There are prescribed forms for the power of attorney in Queensland, however documents validly prepared and executed in another state will be effective to the extent that it gives powers that could be validly given under the Act. To comply with formal requirements for a Queensland Enduring Power of Attorney, the power of attorney must be: The current approved form of Enduring Power of Attorney is a lengthy document which identifies a number of options for the principal to stipulate how the power is to be exercised, including their wishes, and whether third parties are to be consulted. The form of Enduring Power of Attorney and the guide to it can be found online through the Queensland Government website. Obligations of attorneys Becoming an attorney under an Enduring Power of Attorney means taking on significant obligations and it is not without risk. First, the attorney must exercise the power honestly and with reasonable diligence to protect the principal’s interests, and that has the result that an attorney can be liable to compensate the principal if they fail to do so. Second, the attorney must exercise the powers subject to the terms of the document. Third, the attorney must sign documents noting that it does so as attorney for the principal. Fourth, an attorney who knows that their power has been revoked, must not exercise or purport to exercise the power. Fifth, the attorney must avoid entering into a transaction by which there is or might be or results in a conflict between their own interests or the interests of a close associate or relation or another duty, with the interests of the principal. This is subject to the power of the principal (if they have capacity) or the
