LAMAn enduring Power of Attorney is a legal document that permits a person (‘the Principal’) to appoint a trusted friend or family member, or more than one (‘the attorney’) to step into the Principal’s shoes and manage their legal and financial affairs if for some reason the Principal’s decision making ability is lost. This type of Power of Attorney is aptly named an enduring Power of Attorney because the attorney’s power to make decisions for the Principal endures or continues if the Principal loses their mental capacity to manage their own affairs.

Any person who acts as an attorney pursuant to an enduring Power of Attorney document has a number of duties. Those duties are now spelt out in writing within the prescribed form of enduring Power of Attorney document.

Those duties include:-

  • Acting in the best interests of their Principal;
  • Not conferring benefits on themselves or on anyone else unless they are expressly authorised to do so;
  • Keeping adequate accounts and records of any dealings with the Principal’s assets, as the attorney may be held accountable for how money or other assets of the Principal are dealt with; and
  • Ensuring they always act honestly in all matters concerning the Principal’s legal and financial affairs.

If a person acts as an attorney pursuant to an enduring Power of Attorney document it is incumbent upon the attorney to discharge their duties to the Principal faithfully or they can be held accountable for their actions as the following case demonstrates.

In the case of Moylan v Rickard, the children sold their mother’s home pursuant to an enduring Power of Attorney, invested part of the proceeds to cover nursing home fees for their mother and paid the balance to themselves as gifts. The children argued that the gifts were in the Principal’s interest because they preserved the Principals’ pension and associated medical entitlements. The argument was not successful. The Court found the distributions made by the attorneys to themselves “were made in disregard of the interests of their mother [the Principal] and accordingly were not an honest exercise of the power conferred on them” by the enduring Power of Attorney instrument. The Court ordered the attorneys repay the gifts.

Making an enduring Power of Attorney is an important strategy which can help prepare you and your family for a sudden change in your circumstances. At Everingham Solomons, we have the expertise to advise you in relation to all of your estate planning needs including enduring Powers of Attorney, because Helping You is Our Business.

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