In this edition of It Depends, special counsel Rebecca Edwards explains four common mistakes made by enduring attorneys and how to avoid them.
An enduring power of attorney made without legal advice and put away for years may be invalid when it is finally needed. Once acting, attorneys can also run into trouble by failing to keep careful financial records or by mixing their finances with the principal’s, including through a joint bank account.
Attorneys should seek financial, accounting and legal advice on complex decisions, such as a move to aged care, so they act in the best interests of the person they are looking after.
Video transcript
Welcome to this edition of It Depends. I’m Rebecca Edwards, a special counsel and today we’re going to be talking about common mistakes that enduring attorneys make.
Invalid Enduring Power of Attorney
So, when it comes to enduring powers of attorney, sometimes it can be challenging if a document is found to be invalid after a person has lost capacity. Difficulties often arise where documents are made, often without the support of legal professionals, and they’re stored away for years and years, only to then be needed. And when they come out of the drawer, they’re actually found to be invalid at that point. That can be really difficult, because it may mean that an application needs to be made to the Queensland Civil and Administrative Tribunal. So, QCAT for an application for someone or some people to be appointed as administrators or guardians. That can take a really long time, and it can often give rise then to disputes among who might want to be appointed. So, for example, one or more children of that person.
Poor record keeping
So, a common mistake that enduring attorneys often make is that they continue on with often what’s an informal relationship, not realising the obligations and duties that they have as an attorney. And one of the things that I’ll often see is clients who haven’t maintained or kept records. So, it’s really important that when you assume the role as an enduring attorney, that we maintain really careful records about how we have banked and dealt with the person’s finances over the time that we’ve acted in that role. And if we do that, hopefully we will maintain that record and if questions are raised later, you’ll be able to easily answer them.
Intermingling finances
Another common mistake that attorneys make once they’re acting and appointed in that role is that they may intermingle their financial affairs. So, that might be, for example, a parent and child relationship where, for example, a child has opened a joint bank account with mum in order to have ease of access and those things. So, it doesn’t necessarily need to be anything nefarious. It may just be that the child is simply trying to facilitate that banking arrangement, but under the Powers of Attorney Act, having that joint banking, that intermingling of financial affairs, particularly in circumstances where it didn’t exist before, is really quite problematic and could get you into a lot of hot water. So, once you’ve been appointed as an attorney, it’s really important to ensure that you keep separate your financial affairs so that, again, we can easily keep records and make sure that we are adhering to the legislative requirements.
Not seeking professional advice
Prior to commencing as an attorney and once you’re acting as an attorney, we have certain obligations under legislation to make sure that we’re acting in the best interests of the person we’re looking after and managing their money, for example, in an appropriate way. And so seeking advice, particularly in relation to complex decisions, so it might be a move to aged care for example, it’s really important that we obtain financial, possibly accounting as well as legal advice to ensure that we are taking actions that are in the best interests of the person who we are looking after. So, if you’ve got any questions in relation to acting as power of attorney for someone, contact me or someone here at the Cooper Grace Ward team who’ll be able to help you.
