In Queensland, there are two types of attorney documents:
- A General Power of Attorney; and
- An Enduring Power of Attorney.
What is a General Power of Attorney?
A General Power of Attorney is a legal document used to appoint a person or persons as your attorney for financial matters only (such as paying bills, accessing bank accounts, signing contracts etc).
It does not allow you to appoint someone for personal and health matters.
Typically, a General Power of Attorney is completed where the principal is absent or unavailable and requires someone to sign on their behalf.
The time that the attorney is empowered to act should be stated in the document. It can provide that the attorney is empowered to act immediately, or between certain dates when the principal is unavailable.
For example, if John is purchasing an investment property and settlement is scheduled to fall on a date that John is camping in a place with no phone reception, then John is able to complete a General Power of Attorney appointing his wife, Karen to sign on his behalf as his attorney.
Where there is any documentation to be signed by an attorney in respect of real property, the General Power of Attorney must be registered with the Department of Natural Resources Mines and Energy.
Once the General Power of Attorney is registered, the attorney will be provided with a number. When the attorney is signing any documentation on behalf of the principal, they must ensure that this number is included on the paperwork.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney is a legal document used to appoint a person or persons as your attorney for:
- Financial matters; and
- Personal and health matters.
Financial matters capture the same types of transactions as mentioned above for a General Power of Attorney. As with a General Power of Attorney, the document will state the time that the attorney is empowered to act – this may be immediately, or at a certain date or time. The document can also be registered with the Department of Natural Resources Mines and Energy if any real property transactions are contemplated.
Personal and health matters include such things as liaising with medical personnel, choosing an appropriate nursing home, choosing what personal services are available to the principal and lifestyle decisions.
However, an attorney will not be empowered to make personal and health decisions for the principal until such time as the principal is not able to make decisions for themselves.
Whilst a principal is able to make their own personal and health decisions, there is no need for the involvement of the attorney.
What are the obligations of an attorney?
When considering who to appoint as your attorney, it is important to remember that your attorney can do for you anything that you can do for yourself.
An attorney is required to act honestly and with care, which includes such things as maintaining the principal’s confidential information and existing supportive relationships.
When managing financial matters, an attorney is required to avoid conflict transactions, maintain the property of the principal separate to their property, keep records and accounts of their dealings on behalf of the principal.
What is a conflict transaction?
A conflict transaction is when an attorney enters into a transaction with the principal and the interests of the principal and the attorney are at odds.
An example of a conflict transaction:
Jane is an attorney for her mother, Barbara. Barbara is well into her 80’s. Barbara says to Jane, “I am so grateful for the assistance you have given me over the years, I want to give you my property”. Jane then arranges the paperwork to transfer Barbara’s home to herself. Jane does not pay anything for the property, Barbara has indicated it is a gift.
This is a very plain example of a conflict transaction.
If you are considering appointing an attorney, it is important to consider all aspects of having such a document and why it is important to choose someone who you view as responsible, impartial and reasonable.
Conversely, if you have been appointed an attorney, it is crucial that you understand and acknowledge your obligations to the principal. If an attorney does not carry out their role having regard to their obligations, there can be serious penalties.
If you have any questions in relation to Powers of Attorney, please do not hesitate to contact me.
Please note that as at 30 November 2020, new Enduring Powers of Attorney forms will in use. We will release a subsequent blog in relation to the new forms in the coming week.
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