“I’m thrilled to announce I’ve been appointed Mum’s Power of Attorney,” said no-one ever in the history of sibling rivalry.
While many of us end up saying that – well, perhaps not the thrilled part – how many of us know what to expect and why.
Addressing the what, a Power of Attorney (PoA) is a legal document through which one person, the principal, provides authority to another (the attorney), to act on their behalf. It provides powers to make decisions about matters such as property, financial obligations, assets, investments, etc.
Imagine you’re in an accident rendering you unable to manage your affairs. You’d want someone trustworthy to manage those affairs with your best interests in mind, right? Well, that’s the why of it.
The various types of PoAs can differ from State to State, but chiefly they are:
- General: You make financial and legal decisions for a set period of time, e.g. the principal is taking an overseas holiday and needs someone to manage their affairs at home. Subtext: you’re never too young to appoint a PoA!
- Financial and Legal: You make financial and legal decisions for the principal who is unable to make such decisions for themselves due to being unconscious, mentally incapacitated, etc.
- Medical: You make decisions around medical treatment the principal is to receive, including surgery and other medical procedures.
- Guardianship: Where and how a person will live if they cannot make lifestyle decisions themselves due to being mentally incapacitated.
A General PoA is immediately cancelled if the principal dies or loses capacity. However, an Enduring PoA will, depending on its terms, either continue to operate or start to operate if the principal loses capacity. It will also be immediately cancelled on the principal’s death.
Agreeing to become Mum’s PoA is a huge responsibility – you’re probably already Googling how to get out of it. But she trusts you above others. She thinks you’re dependable, honest and will faithfully represent her – is she wrong?
It’s a great honour. You don’t just want to tick the boxes, you want to prove she made the right decision, despite your siblings looking daggers at you.
In discharging your duties go above and beyond by remembering:
It’s not about you
You may not agree with what Mum wants, but you must be prepared to carry it out. Being an attorney means conscientiously representing her when she is unable to represent herself.
Be assertive
That’s assertive, not aggressive – easily confused when the pressure’s on. Communication is key. Be articulate, don’t waiver, stumble or bargain, just be clear about what you’re doing and why.
Be decisive
Understanding your mum’s expectations means you’ll make confident decisions. Ditherers attract people eager to share their opinion and cause you to question Mum’s wishes. But she appointed you for a reason; you’re a big kid now, get on with it!
Sibling – or other – rivalry
Family or friends not named on the PoA might try to coerce you into making decisions you’re uncomfortable with. Be polite – family get-togethers can be tedious if no-one’s talking to you – and explain that it’s Mum’s wishes that count not what others might think is right for her.
Conflicts of interest
You must be careful not to do anything that would confer a benefit on yourself by being Mum’s attorney or which would not be in her best interests. Doing either of those things is a breach of your duty as Mum’s attorney. While it is possible for a transaction or an action, which would usually be a conflict transaction, to be authorised by Mum, this must be clearly spelt out in the Enduring PoA.
If you’re emotional or prone to being influenced, you’ll find it difficult to carry-out your duties. Similarly, if you’re unmotivated or seriously disagree with your Mum’s wishes this probably isn’t the gig for you.
A solicitor who is experienced in estate planning can help draw-up an appropriate PoA for the situation, ensuring it’s legal, specifies from when your powers take effect and what your duties are, including Mum’s wishes and expectations.
We regularly assist our clients with preparation of both General and Enduring PoAs, including POAs tailored to authorising an attorney to make certain decisions in relation to a business or in relation to assets held by our clients in companies or trusts they control. Contact Brien Leibinger if you have any questions or would like a PoA prepared for yourself or another family member.