If you have been appointed as a financial attorney or administrator, whether by the individual or by VCAT, it is essential to understand what is involved in this role. A breach of your legal duties can result in suspension of the role or an order of compensation if brought forth by an interested party.
Follow these simple ‘do’s’ and ‘don’ts’ for financial attorney’s and administrators to protect yourself and ensure you are meeting the requirements of the person you are appointed to make decisions for (Principal) and your obligations under the Powers of Attorney Act 2014 (the Act)*.
- Act in the best interest of the Principal at all times.
- Involve the Principal in the decision making process, where the circumstances allow.
- Keep accurate records and accounts of all financial and legal dealings transacted by you. If you have co-attorneys, ensure that they are aware of any transactions undertaken by you alone (where the power is exercisable both jointly and individually).
- Communicate with co-attorneys before undertaking significant financial transactions, particularly if stipulated as a condition of the enduring power of attorney. Get independent legal advice if you are unsure about any matter relating to the financial and legal affairs of the Principal or there is a dispute between you and your co-attorney(s), you can apply to VCAT for general guidance or an order to resolve the issue.
- Become familiar with the financial responsibilities of the Principal, for example whether they have rates, insurance premiums and taxes which need to be paid.
- Budget to ensure sufficient funds are made available to the Principal for their financial expenses and/or personal use.
- Do not exercise your decision making power too early. Where the power comes into effect on incapacity, wait until a doctor has certified that the Principal no longer has the ability to make financial decisions.
- Do not act on your own if you have been appointed jointly with other attorneys.
- Do not delegate to those who have not been appointed. If you cannot act as an attorney only an appointed alternative can to step in to act.
- Do not intermingle the Principal’s property with your own, unless the property is jointly owned.
- Do not personally benefit from the attorney’s assets unless this has been specifically authorised in the enduring power of attorney or by VCAT.
- Do not make payments to yourself using the Principal’s funds, unless they have specifically authorised remuneration for your work in the enduring power of attorney.
- Do not enter into transactions where there is actual or perceived conflict of interest unless authorised by the enduring power of attorney. Transactions must only advance the interests of the Principal and not benefit you, your family, relatives, friends or business associates in any way.
- Do not disclose confidential information gained as the attorney, unless authorised by the enduring power of attorney or by law.
- Do not vote on behalf of the principal.
- Do not make decisions about the care, accommodation or wellbeing of the Principal unless you are also the appointed personal attorney.
- Do not make or revoke a Will or enduring powers of the Principal.
- Do not take money out, pay bills or make any financial transactions after the Principal has passed away.
- Do not assume you will manage the principal’s estate on their death, you will only do this if you are also the appointed executor of the Principal’s last valid Will and Probate has been obtained, where required.
*This information provides a summary of information contained in Part 6, Division 1 of the the Act.
This article originally appeared in the Summer 2017 edition of InSuccession. Other articles in this newsletter included:
- New laws clarify Executor commissions during estate administration
- New benchmark set for all estates to be treated equally
- Estate planning advice for same-sex couples getting hitched
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