What is an Enduring Power of Attorney?

Power of Attorney

It is a legal document by which you authorise someone (known as your attorney) to act on your behalf during your lifetime.  It only operates with respect to your financial affairs and property.  Your power of attorney ceases to operate upon your death.

Provided that you are over 18 years of age and you are not mentally incapacitated, you may appoint an attorney.  Your company may also appoint an attorney to sign documents on its behalf.

The person (or company) who appoints the attorney(s) is called the donor.

What is the difference between an Enduring Power of Attorney and a general power of attorney?

A general power of attorney is valid whilst the donor is of sound mind, whilst an enduring power of attorney continues to operate even if you become mentally incapacitated.  Most powers of attorney are prepared as enduring powers of attorney for the reason that most donors want their attorney to manage their affairs if they are mentally incapacitated and if they are incapable of managing their affairs themselves.

When does the power of attorney commence?

The power of attorney commences from the date that the donor and the attorney sign the document, unless a later date or event is specified in the document.

What can an attorney do?

The powers and responsibilities you give to your attorney are generally significant and far-reaching, unless those powers are expressly limited in the document.  It is very important that the person you appoint is someone well known to you and trusted.  Many people appoint their spouse, a child, another relative, a close friend or a legal or accounting advisor.  You may appoint more than one attorney to act, either together or separately.

Does the appointment mean that the donor can no longer sign documents?

No.  The appointment of an attorney under the power of attorney means that an additional person or persons can sign documents for the donor.  A power of attorney may be drawn up to enable the attorney to manage a donor’s finances if they are ill or absent overseas.  It is only when the donor becomes mentally incapacitated that the attorney will need to sign all necessary documents.

What duties does the attorney have?

The Powers of Attorney and Agency Act 1984 prescribes certain duties which an attorney must observe, namely:

  • the attorney(s) must keep and preserve accurate records and accounts of all dealings and transactions made using the power, otherwise they commit an offence;
  • the attorney(s) cannot renounce the power during the legal incapacity of the donor except with the permission of the Supreme Court; and
  • the attorney(s) must exercise their powers with reasonable diligence to protect the interests of the donor.

Can I change or cancel an appointment of an attorney?

Yes, at any time whilst you are of sound mind.

Where should I keep the power of attorney?

The power of attorney should be kept in a safe place.  Some people like to retain the document themselves, whilst others prefer to store the power of attorney at their solicitor’s office.  In those circumstances, it is wise to let the attorney(s) know where the document can be found so that it can be accessed if it becomes necessary to act under it.  Some people prefer to allow the attorney(s) to keep a copy of the document.

Acting under a power of attorney

When an attorney is acting under a power of attorney, he or she will need to produce it to any person or company with whom he or she is dealing.  The person or company will want to see the document to make sure that the attorney has the necessary power to act.  The person or company will usually want to note the details of the document or take a photocopy of it.  The original power of attorney itself should always be returned to the attorney.

Registration of the power of attorney at the Lands Titles Office

If an attorney needs to deal with real estate, e.g. by transferring, mortgaging or leasing, the power of attorney would need to be registered at the Lands Titles Office.  Unless it is anticipated that the power of attorney will need to be used to deal with real estate, the power of attorney is not generally registered upon its execution.  However, if necessary, it can always be registered by the attorney later.

Signing under power of attorney

The normal form of signature for an attorney is to show the full name of the person giving the power, then writing the words “by his attorney” or “by her attorney”, and the attorney then signs his or her own signature.  An example would be:

Cedric Winston Brown

by his attorney

 

D S Smith

Denis Samuel Smith