Enduring Power of Attorney: What to Include in Yours

Enduring Power of Attorney

When drafting your Enduring Power of Attorney (‘EPOA’) you should consider clauses which give your attorneys express power and direction with respect to managing your affairs. This is important to ensure your affairs are managed in a way which is consistent with your wishes, while also ensuring that there is no ambiguity or misapprehension as to what your attorneys can and can’t do. This is even more important when considering that once you lose mental capacity, you can no longer amend or revoke your EPOA.

Some examples of these types of clauses are outlined below:

Conflict Transactions

You may wish to consider authorising your attorney to engage in conflict transactions. Generally, an attorney is prohibited from entering into a conflict transaction, unless authorised by the EPOA.

Examples:                                                                          

1. A conflict transaction happens if an attorney for a financial matter buys the principal’s car.
2. A conflict transaction happens if an attorney for a financial matter lends the principal’s money to a close friend of the attorney.
3. A conflict transaction happens if an attorney for a financial matter rents the principal’s residential property to the attorney or a relative of the attorney.
4. A conflict transaction happens if an attorney for a financial matter uses the principal’s money to pay the personal expenses of the attorney, including, for example, the attorney’s personal travel expenses.
5. A conflict transaction happens if an attorney for a financial matter buys the principal’s house.

Naturally, the power to enter into conflict transactions can be abused, so you should ensure that your attorney’s are trustworthy, and speak to your solicitor beforehand about the risks involved.

Maintain Dependants

Section 89 of the Enduring Powers of Attorney Act 1998 (Qld) provides that an attorney for financial matters may provide for the principal’s dependants (such as a spouse or children) from the principal’s estate. Despite this legislative provision, you should consider including a clause in your EPOA which affirms that this is indeed your wish. This is particularly important if your attorney is also a dependant of yours, as if they provide for themselves, it may raise questions of improper conduct or a conflict of interest.

Binding Death Benefit Nomination

While there is case law that suggests that an attorney may deal with a principal’s binding death nomination in certain circumstances, until the government has enacted legislation to make the position clear and consistent across superannuation funds, there is a risk that your superannuation fund might not accept your attorney signing a binding death benefit nomination on your behalf. In any event, it is recommend that you include a specific power in your EPOA to allow your attorney to renew your binding death benefit nomination as this will provide certainty in the event that you do lose capacity and the government has not enacted legislation confirming an attorney can take such steps.

If you require assistance or have any questions regarding your Enduring Power of Attorney, contact Preston Law today for expert and trustworthy advice.