Have you been appointed as an Attorney? Are you clear on what powers you can and cannot exercise as an Attorney?

What is an Attorney?

An Attorney is someone who has been appointed under a Power of Attorney to manage the affairs of another person, often but not always, when they have lost capacity to do so themselves.

Most people (quite rightly) seek legal advice when drawing up a Power of Attorney. But when the time comes to carry out the duties as an Attorney, very few people seek legal advice. A failure to seek advice can have some dire consequences. See our example below for the first in our series of ‘Powers of Attorney – Do’s and Don’ts’.

Acting in the Principal’s best interests

Attorney’s have a duty as Attorney to act in the best interests of the Principal (the person you are Attorney for). But what does that mean? Let’s use Dorothy’s situation as an example.

Dorothy’s husband predeceased her, and after having a stroke, Dorothy had to leave her beloved home in favour of a nursing home. Luckily Dorothy had a Power of Attorney appointing her 3 adult children together and separately, and the two children who also lived in Canberra (her daughter Olivia lived and worked overseas) were able to look after the vacant home, cleaning and maintaining the property. The only other asset to Ruth’s name was $20,000 in the bank, and so this allowed her to receive a Centrelink pension as the family home is excluded in the means test. She was not required to pay an accommodation bond and her nursing fees were set at 85% of her Aged Pension.

After a year her two Canberra children got tired of maintaining the property and decided to sell the family home. They couldn’t contact Olivia as she was working in a remote area, but this was ok as the children were appointed together and separately. They managed to sell the property for $900,000, but instead of giving the proceeds to their mother, the money was split between the three children as ‘they were going to get the money when mum died anyway’. Olivia found out, was shocked, and immediately transferred her $300,000 to her mother as it was her money. The sale of the house was also reported to Centrelink, and this triggered the loss of Dorothy’s pension, and also meant that she was now required to pay an accommodation bond and fortnightly nursing home fees in the realm of $800 which she couldn’t afford (as Dorothy’s asset situation now exceeded the means test).

The two Canberra children breached their legal obligations as attorneys to act in the best interest of their mother and caused a fallout in the relationship with their sister Olivia.

Action against your fellow attorneys

Using the example above, not only did Olivia have to make an application to the Guardian division of the ACT Civil and Administrative Tribunal (ACAT) to have her siblings removed as attorneys and to appoint herself as sole attorney, she also had to commence legal action against her siblings to recover the $600,000 from the sale of her mother’s property.

An Attorney may think they have good intentions and are acting in the best interests of the Principal, but we recommend that you seek advice on your duties as an Attorney before making any major decisions. The financial and emotional ramifications of a dispute can be far more costly.

If you are an attorney and would like some advice, or would like draw up your own Power of Attorney, contact our team at Chamberlains to ensure your affairs are in order.