The Powers of Attorney Act does not allow an attorney to enter into conflict transactions
Section 73
Avoid conflict transaction:
- An attorney for a financial matter may enter into a conflict transaction only if the principal authorises the transaction, conflict transactions of that type or conflict transactions generally.
Note — However, see section 105 (Relief from personal liability).
(2) A conflict transaction is a transaction in which there may be conflict, or which results in conflict, between —
(a) the duty of an attorney towards the principal; and
(b) either —
(i) the interests of the attorney, or a relation, business associate or close friend of the attorney
I must avoid conflict transactions* unless specifically authorised in the EPOA document.
- I must not enter into a transaction that may (or even appear to) benefit me personally or financially as a result of my role as attorney, unless specifically stated in the EPOA document
- This includes transactions with my, or another attorney’s relatives, friends or business associates. For example, selling the person’s house to a relative.
- If I consider a conflict transaction is necessary to make.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney (EPA) is an important legal document you prepare to allow someone else to make personal and/or financial decisions on your behalf.
Why would I prepare one?
You may not always be able to make decisions when you need to. You may be too ill to make choices about your medical treatment, or you could suffer a disability that prevents you from communicating your wishes to others. The advantage of an EPA is that you will have chosen who you would like to make decisions on your behalf.
How does it work?
You appoint an ‘attorney’. This person does not need to be a lawyer. You may select a relative, friend, professional person such as your accountant, or someone else you trust and believe to have the necessary abilities to carry out your wishes and manage your affairs. You should be very careful about who you choose as your attorney. You are potentially giving another person total control over your assets, plus the ability to make personal decisions regarding your health care and accommodation, when you are unable to do so. Your attorney’s decisions will have the same legal power as if you had made them yourself.
What types of decisions can my attorney make for me?
You can give your attorney responsibility for:
- personal matters, such as where you live and who you have contact with • health care, including choosing medical and dental treatments
- financial matters, like collecting your income, paying your bills and taxes or selling your home. You can also add to your attorney’s power, or limit it, and set out detailed instructions to follow.
When does the power begin?
For personal and health care matters, your attorney’s power begins only if and when you lose capacity to make those decisions. For financial matters, your attorney’s power begins whenever you want it to and you nominate the start date on your EPA form. You can still continue to make any of your own decisions while you are capable of doing so.
This is a conflict transaction and is prohibited examples:
Atm withdrawals –
Retainer extend to document:
Powers and responsibilities of an attorney
Following is a list of the powers and responsibilities of an attorney, and when an attorney can and cannot use them:
Examples where the attorney cannot use the EPA
- Transferring property or assets to oneself
- Intervivos gifts to attorneys children
- Granny flat I want to pay to do up your kitchen
- Joint groceries
- Reimbursement of expenses – I go down toe pharmacy and I pay for it and you reimburse me
- Medicare refund
- Mum goes on holiday and mum pays attorney is companion
- Withdrawing money from ATM
Examples where the attorney can use the EPA
You can authorise your attorney to enter into cash transactions on your behalf without providing audit documentary proof under these conditions:
- Providing there are no more than 15 transactions per year
- Providing the transactions do not exceed more than $100 for each transaction
- Providing the transactions are no more than an aggregate of $1,000 in any given 12 month period otherwise I require the attorney to retain documentation or refund.
- For larger transactions it is required the audit or specify that transactions which have a predominant benefit for me which may have an incidental benefit for the attorney are specifically exempt.
Every client needs advice
This would be comfortably able to be done if you have only one child and the child is the attorney or your attorney is proposed as your residuary beneficiary. In other circumstances you would only adopt these conditions if you believe that it will resolve rather than inflame these issues and if it is not a fatal disincentive to your attorney.
Our intention is to exclude the frivolous obnoxious beneficiary rewriting the history of the abuse of an EPA but it should no be so broad that it is a leave pass for an attorney.
Check can we have a go at the Attorney after the Principal has expired.
Balance between green light not being a green light to rip off the principal.
Call us on 1300 334 566 or email info@bcglaw.com.au and safeguard your interests every step of the way- We are your legal problem solvers.
