WHEN people talk about a power of attorney, what they usually mean is an enduring power of attorney. But what makes it enduring?
Two types of power of attorney
An enduring power of attorney allows someone to make financial and legal decisions on someone else’s behalf and continues even if that person loses the ability to make decisions for themselves.
The other type is a general power of attorney, which is of no use to people who want to make sure their interests are looked after if they lose mental capacity.
A general power of attorney allows someone to make financial and legal decisions on someone else’s behalf, but only while that person has the ability to make their own decisions. It is mainly used to ensure business continues to be managed during the absence of a principal.
Enduring powers of attorney are an indispensable legal tool, but the way things are set up in Australia means that they can be a big problem, too.
Problems with enduring powers of attorney
In Australia, problems arise from the poor regulation of enduring powers of attorney.
For starters, every state and territory regulates enduring powers of attorney differently. So, you can’t always be certain that an enduring power of attorney made in one state will be recognised in another.
No Australian jurisdiction recognises enduring powers of attorney made overseas.
Because there’s no certainty an enduring power of attorney made in one state is enforceable in another, people with, for example, real estate in two states may find their nominated attorney cannot deal with both real estate portfolios.
Then, none of these eight jurisdictions require enduring powers of attorney to be registered and lodged. None maintain a register for the voluntary registration of enduring powers of attorney.
This leaves room for confusion and complications where a person has made multiple enduring powers of attorney. It also invites fraud and forgery.
The problems are well-known and federal, state and territory Attorneys-General have been talking a long time about how to address them. Maybe this is finally going to lead to meaningful reform of enduring powers of attorney.
Reform of enduring powers of attorney
The biggest push for reform of enduring powers of attorney has come from the Australian Law Reform Commission. It’s landmark inquiry into elder abuse looked at enduring powers of attorney, among a host of other issues.
In September, the Standing Council of Attorneys-General (all the state, territory and federal Attorneys-General agreed to release a consultation paper specifically on enduring powers of attorney.
The paper offers a number of reform proposals for the laws governing enduring powers of attorney.
How should an enduring power of attorney be executed? A fairly basic question. In a notable omission, the consultation paper’s answer to that question does not suggest that enduring powers of attorney should be registered and lodged.
Who can be a witness? Should bankrupts or those convicted of violent criminal offences be excluded?
Who can become an attorney? This is an area where many disputes about conflicts of interests arise.
Then there’s the issue of how an enduring power of attorney is revoked, especially in cases of perceived or actual fraud.
The duties of an attorney may seem simple but can be quite complex. What sort of qualifications must an attorney have?
Finally, in so many cases families feel powerless to raise issues in relation to the way the person appointed as attorney carries out their duties. Often legal action is prohibitively expensive.
Have your say
Commenting on the proposals in the federal Attorney-General’s consultation paper is made easy so as to enable people who normally would not make a submission to have their say.
You can tick survey options or respond in detail or do both. The Attorney-General’s Department specifically wants to hear from people with real life experience of enduring powers of attorney.
CPSA recommends that anyone with views on, and/or experiences with, enduring powers of attorney avails themselves of this opportunity.