EPA 3 – Duties of enduring attorneys
This factsheet is part of a set of factsheets about enduring attorneys under the Powers of Attorney Act 1998 (Qld) (POA Act).
The factsheets in this series are:
EPA 3 – Duties of enduring attorneys
These factsheets do not relate to general powers of attorney or to decision making for children and minors.
Meaning of terms
A dictionary in schedule 3 defines particular words used in the POA Act.
In simple terms:
- An Enduring Power of Attorney (EPA) is a formal document used by an adult (the principal) to authorise one or more persons (the attorneys) to make personal and/or financial decisions on the principal’s behalf if the principal lacks capacity to make those decisions.
- An attorney under an EPA means a person authorised to make decisions on behalf of another person.
- A principal under an EPA means a person who appoints an attorney to make decisions on that person’s behalf.
- Power for a matter means power to make all decisions about that matter.
- A person’s capacity for a matter means the person is capable of:
- understanding the nature and effect of decisions about the matter; and
- freely and voluntarily making decisions about the matter; and
- communicating the decisions in some way.
- A person’s impaired capacity for a matter means the person does not have capacity to make decisions about the matter.
General duties of enduring attorneys
When an enduring attorney exercises a power authorised by a principal, the attorney must exercise that power in a way that complies with relevant general principles and duties (section 76 POA Act).
Duty to comply with general principles
An attorney must make decisions taking into account the general principals set out in Schedule 1 of the POA Act, including:
- considering a principal’s right to participate, to the greatest extent practicable, in decisions affecting the principal’s life;
- considering a principal’s views and wishes including by, where practicable, working out from the principal’s previous actions what the principal’s views and wishes would be;
- encouraging and supporting a principal’s participation in community life;
- encouraging and supporting a principal’s right to become as self-reliant as possible and achieve his or her maximum potential;
- respecting a principal’s dignity and value as an individual and member of society;
- supporting a principal’s cultural and linguistic environment and values (including religious beliefs); and
- maintaining a principal’s existing supportive relationships.
Mary is the sole attorney for her father, Peter. Mary does not talk to her sisters, so she does not keep them informed about Peter’s general health or allow Peter to go to church with them on Sundays as he used to.
Mary may be in breach of her duty to comply with the general principals, namely to maintain Peter’s existing supportive relationships, to support his right to participate in community life and to respect his religious beliefs and values.
Duty to comply with health care principle
An attorney exercising power for a health matter must also comply with the health care principle set out in Schedule 1 of the POA Act.
When making decisions for a health matter, an attorney must:
- ensure decisions contribute to the principal’s health and wellbeing;
- ensure decisions are in the principal’s best interests and appropriate to the principal’s circumstances;
- seek the principal’s views and wishes to the greatest extent practicable;
- consider information and advice given by the principal’s doctor or health provider; and
- choose the least restrictive or intrusive method of treatment if there is a choice.
Duty to act in a principal’s best interests - an attorney must exercise a power granted by a principal in accordance with the terms of the EPA, and act honestly and with reasonable diligence to protect the principal’s interests (section 66 POA Act).
An attorney may be ordered to compensate the principal for losses or any other liability incurred by the principal as a result of the attorney’s failure to discharge this duty.
In the scenario above, Mary went on an extended holiday with Peter and forgot about managing the tenants renting Peter’s house. The tenants remained in rent arrears for six months and Mary never issued a notice to remedy breach. The tenants abandoned Peter’s house owing $20,000 in rent. Mary never tried to recover the money owed to Peter and the time limitation to apply for a compensation order against the tenants has expired.
Mary may be in breach of her duty to act diligently to protect Peter’s interests, and ordered to compensate Peter for that loss.
Duty of confidentiality
An attorney must not use confidential information gained by being an attorney, unless the attorney has a reasonable excuse or the use of such information is allowed by the POA Act (sections 74, 74A POA Act).
For example, an attorney may disclose confidential information about the principal’s affairs:
- to discharge the attorney’s duties;
- to report a suspected offence to the police or assist in police investigation;
- to prevent a serious risk to a person’s life, health or safety;
- to obtain legal or financial advice or counselling;
- if necessary for a legal proceeding related to the POA Act; or
- if authorised or required by law or by the court or tribunal.
Duty to avoid conflict transactions
All enduring attorneys must avoid acting if there is, or may be, a conflict of interests or a conflict of duties, unless the EPA or the principal authorised that action while the principal had capacity to do so. In that case, it is recommended that an attorney applies to QCAT or the Supreme Court for a direction about the conflicting matter.
Attorneys for financial matters have an additional duty not to enter into a transaction if there is, or may be, a conflict between a duty the attorney owes to the principal and the attorney’s interests (or the interests of a relation, business associate or close friend of the attorney) (section 73 POA Act).
There is a presumption that in a conflict transaction between a principal and attorney (or between a principal and a relative, business associate, or close friend of the attorney), the attorney induced the principal to enter into that transaction by undue influence (section 87 POA Act).
If a principal does not have capacity to authorise a conflict transaction entered into by the attorney, the attorney must ask the authority of QCAT or the Supreme Court before entering into such transaction.
Certain conflict transactions are authorised by the POA Act and may not need to be authorised by QCAT or the Supreme Court first, for example:
- if an attorney jointly owns property with a principal and the principal needs to deal with his or her interest in the property (section 73(3) POA Act);
- if an attorney gives a gift or makes a donation on behalf of a principal in accordance with section 88 POA Act; or
- if an attorney provides for the needs of a principal’s dependants from the principal's estate in accordance with section 89 POA Act. (See EPA 2 – Powers of enduring attorneys)
Leonie is Judith’s sole attorney for all financial matters. Judith needs to urgently sell her house to pay for her nursing home fees. Leonie tells her own son, Michael, that Judith will accept less than market value for the house if she cannot sell the house by a certain date. Leonie does not advertise Judith’s house for sale and offers to sell the house to Michael for half of its market value. That is a conflict transaction. If Leonie does not obtain the authority of QCAT or the Supreme Court before the sale, Leonie may:
Duty to keep records for financial matters
Attorneys for financial matters must keep accurate records and accounts of all dealings and transactions made on behalf of a principal (section 85 POA Act).
These records and accounts may be eventually audited by QCAT or the Supreme Court. It is recommended that attorneys for financial matters seek assistance from a book keeper or accountant to set up an appropriate recording system and budget for the principal if necessary.
A monthly statement of accounts is commonly used to record income and expenses incurred by a principal. Large expenses should be recorded separately and receipts for such expenses should be kept.
Duty to keep property separate
Attorneys for financial matters must keep their property separate from a principal’s property (section 86 POA Act), for example in separate bank accounts or storage places.
That obligation does not arise to property jointly owned by a principal and attorney before the EPA commenced. However, for jointly owned property, records must still be kept by the attorney clearly showing the principal’s share in the property.
Melissa is the sole attorney for all financial matters for her father, Ron. Melissa and Ron owed a restaurant together before Ron had a severe stroke and lost capacity for financial matters.
Melissa and Ron can continue to own the restaurant together after the EPA commences. However, Melissa must ensure that she keeps records of all income and expenses in a way that clearly demonstrates Ron’s share in the family business.
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