Power of Attorney
Our Gold Coast power of attorney lawyers can assist you in preparing a power of attorney or advising in relation to powers of attorney.
What is a power of attorney?
A power of attorney is an authority given to a third party (the attorney) to do things and sign documents on your behalf. You are then bound by the actions of the attorney. The word “attorney” does not mean that the third party has to be a lawyer, an attorney can be anyone subject to a few restrictions, as long as they are over 18.
Different kinds of powers of attorney
There are three main kinds of powers of attorney.
The first is a general power of attorney which is for financial matters only (the attorney cannot make health decisions), and it ceases to be effective if you lose capacity. These powers are very quick to prepare and do not need that the attorney signs or acknowledges it. Our Gold Coast power of attorney lawyers would recommend these types of powers in some situations, such as to allow someone to sign documents for a sale of a house while you were going overseas, and it had to be done at the last minute. This power can be subject to limitations and it is capable of being revoked.
The second is an enduring power of attorney. This can be for financial matters and personal/health matters (I.e the attorney can make health decisions) but while the power for financial matters can start immediately, the power for health matters cannot start until you lose capacity. The powers can be limited and can be revoked.
The third is a power of attorney given by way of security. Our Gold Coast power of attorney lawyers tend to find this kind of power in credit applications or some guarantees and security documents. The power is given to allow the creditor to sign documents perfecting their security, and this can be very troublesome as it will in some cases allow the creditor to sign a mortgage on your behalf over your own property, without your agreement. That kind of power may be expressed to be irrevocable, meaning that while the money is owed it cannot be revoked.
Who should be the attorney?
While all attorneys usually have certain duties including to avoid conflicts of interest and to keep your property separate from theirs, having duties and sorting out the mess if they are breached are two different things. The attorney should be someone you trust implicitly. You can have more than one attorney and require that they agree on decisions. This kind of power is known as a joint power, when giving a power to two people who can each make decisions independent of the other is known as a several power. A power of attorney with two or three attorneys and the requirement that at least two agree is fairly common.
You can also appoint successive attorneys, eg, first the power goes to your wife and if she is unable to act then the power can be exercised a son or daughter.
Can a company give a power of attorney?
Yes, although it can depend on the constitution. It is more common these days for directors to delegate their powers under the Corporations Act (if the Constitution permits it) than for the company to give the power of attorney.
Can a trustee give a power of attorney?
Yes, as long as the trust permits it. Often before lending money to trustees, financiers will require amendments to the terms of trusts to allow for a power of attorney to be granted, so as to be able to enforce the securities.
When does the power end?
On revocation (see the comments under the heading “Different kinds of powers of attorney” above) or death.
Are attorneys accountable for their dealings?
Yes, there are rules governing the conduct of attorneys both at common law and under Queensland legislation making them accountable for their conduct. But there is a cost to enforcing those rights, so it is best to be careful who to appoint and the terms of the appointment rather than trying to unscramble the egg afterwards.
Should I have a power of attorney?
Generally a power of attorney can be very useful particularly if there is a traumatic event. Our Gold Coast power of attorney lawyers have encountered situations where a business would most likely have failed if the operator (who suffered an unexpected injury leaving them in a coma for weeks) had not given a power of attorney. The usefulness of the power should not be underestimated.
For all enquiries concerning powers of attorney contact Jessica Murray of our commercial and property team on 5574 0111. If the enquiry relates to the breach of a power of attorney, contact Justin Mathews on 5574 0111 or Peter Muller on 5574 0575.
