Attwood Marshall Lawyers Wills and Estates Senior Associate and Accredited Aged Care Professional Larisa Kapur recently joined Robyn Hyland on Radio 4CRB for ‘Law Talks’ to discuss the role of a Power of Attorney and the curious phenomenon where people are opting to appoint their “mate at the pub” to this significant position of power, rather than a family member or professional.
Estate planning lawyers have noticed a new phenomenon, pub attorneys! Increasingly, clients are appointing their pub mates as their Enduring Power of Attorney, even if they don’t know them well or haven’t known them for long.
This trend has prompted us to engage in crucial conversations to ensure individuals fully understand the weighty responsibilities they’re bestowing upon someone when executing an Enduring Power of Attorney.
The importance of carefully considering who you appoint to this powerful role cannot be understated.
The growing tendency of clients to appoint casual friends to these roles highlights a broader societal issue: are more people becoming isolated or alone as they age in Australia?
Research on social connection and men’s health reveals some concerning statistics:
- 1 in 25 (4%) men have no close friends or relatives
- 1 in 10 men over 45 live alone
- 1 in 4 (22.9%) have no-one to share their private worries and fears with
- 1 in 4 (25%) have no-one outside of immediate family they can rely on
- 1 in 4 (25.3%) report poor social networks
This data offers insight into why we may be seeing an increasing number of men choosing to appoint “their mate at the pub” as their Power of Attorney, simply because they lack other viable options.
While your pub mates may be reliable companions for Friday night drinks and banter, the question must be raised: are they truly equipped to manage your finances and make critical health decisions on your behalf?
Appointing an attorney – what to consider
There are many factors to consider beyond camaraderie when entrusting someone with such significant responsibilities.
While your pub mates might be great company, they may not necessarily have the expertise or reliability needed to act as your attorney.
Being an attorney can be quite arduous. It involves managing someone else’s affairs, often during difficult and emotional times. There are legal responsibilities to fulfil, financial decisions to make, and healthcare choices to consider that will significantly impact that individual’s life.
It’s not a role to be taken lightly and requires someone who is not only knowledgeable, but also capable of handling stress and making tough decisions honestly, diligently, and with care and consideration.
When completing an Enduring Power of Attorney document, you can set out specific terms and instructions to help guide your attorney and ensure the decisions being made align with your wishes.
This might include stipulating where you want to live if you lose capacity and need high-level care, what type of treatment you want or do not want to receive, and how you want your property, business, or assets to be handled.
It is important to keep in mind that everyone’s circumstances are unique. Some people have more complicated affairs, such as businesses or family structures, and your chosen attorney will need to be able to competently complete all the necessary tasks required as part of acting as your attorney.
Important characteristics
Skills
When given the power to make financial decisions on someone else’s behalf, an attorney needs a certain level of experience to manage money effectively. They have a strict duty to act in the person’s best interest when managing their money and property.
Some of the tasks an attorney may need to complete include:
- Keeping accurate records of financial and legal transactions
- Ensuring the person’s property is kept separate
- Obtaining financial planning or taxation advice if there are significant or complex assets
- Investing only where authorized to do so and reviewing investments regularly
- Avoiding conflict transactions
- Providing for the needs of any dependants.
If someone is not financially savvy, has a gambling problem, or does not manage their own finances appropriately, it could be a serious cause for concern and this would not be a suitable match when choosing an attorney.
Attorneys are liable for the individual’s tax and regulatory responsibilities, and significant penalties can be imposed if they get it wrong.
Competency
When appointed to make decisions about personal and health-related matters, an attorney needs the ability to stay calm in a crisis and have the confidence to speak up on the person’s behalf.
They may need to talk to doctors, lawyers, or other advisers, so having the ability to communicate confidently, be strong-willed, and effectively liaise with all stakeholders is integral. The attorney needs to be comfortable making personal and sensitive decisions regarding someone else’s health and wellbeing.
Location
Location is also a key factor to consider. Appointing an attorney who lives overseas or interstate may be logistically challenging and unsuitable.
There can be a lot of running around involved in performing the duties of an attorney, whether it is making big decisions like selling the family home, or smaller tasks like paying bills. The individual needs to be readily available in person to tend to these tasks.
Time
Being an Enduring Power of Attorney can take up a substantial amount of time. If someone works full-time, has young children, or other commitments that already take up most of their time, the role may not be suitable for them.
If you do not have family or friends who tick these boxes, consider appointing a professional to the role, such as your lawyer or accountant. This may be particularly appropriate for those with more complex financial and family affairs.
An attorney must accept the role to be appointed
It is dangerous to appoint anyone to act as your attorney under an Enduring Power of Attorney without their knowledge, as they can refuse to accept the role which could result in you not having a valid attorney. .
To appoint someone, that person must sign an acceptance. It is always recommended to have open and honest conversations with potential attorneys about the role, the types of decisions that might need to be made, and the duties involved before they accept the position.
Can an attorney change their mind if the job becomes too overwhelming?
Once a person loses capacity, if their attorney has accepted the role, they cannot simply resign.
The only way to resign is by applying to the Queensland Civil and Administrative Tribunal (QCAT) or New South Wales Civil and Administrative Tribunal (NCAT) or through the court.
There have been many instances where people accept the role of attorney and only realise how difficult it is once they begin their duties.
At that point, they may want to step down. However, resigning is not as simple as signing a form; an attorney must go through the legal process to resign.
The risks of not having an Enduring Power of Attorney
There is an assumption that an Enduring Power of Attorney is only for the elderly. Many misconceptions surround these documents, including fears that they take away one’s freedom or concerns that an attorney will seize control. This is not the case, especially when you appoint someone suitable and trustworthy for the role.
For anyone who does not have an Enduring Power of Attorney in place, the risk is that if the unexpected happens and you lose capacity, the right to make decisions for you is not automatically given to your family or a trusted person who knows your wishes.
Without an Enduring Power of Attorney, your family or a friend would need to apply to the Queensland Civil and Administrative Tribunal (QCAT) or New South Wales Civil and Administrative Tribunal (NCAT) to be appointed as your Administrator to make financial, health and personal decisions.
QCAT or NCAT may also decide to appoint the Public Trustee to manage your affairs.
We have previously discussed the failures of the Public Trustee system, which often involves bureaucratic incompetence and financial exploitation, causing significant distress to individuals and their families.
Read more: The imperative for reform in Public Trustee systems across Australia
If you are unsure who to appoint, seeking advice from an estate planning lawyer can be very helpful. They can identify the best options for your unique circumstances, ensuring you avoid leaving these important decisions to chance or the Public Trustee.
Attwood Marshall Lawyers – helping you plan for the future and preserve your wishes
Our experienced team of estate planning lawyers understand exactly what is required to execute Enduring Power of Attorney documents. It is imperative to ensure that there is no ambiguity within these documents to reduce the risk of any disputes or arguments arising come the time the document comes into effect.
If you need any assistance drafting an Enduring Power of Attorney, or revoking an Enduring Power of attorney, we are ready to help you. Contact Wills and Estates Department Manager, Donna Tolley, on direct line 07 5506 8241, mobile 0423 772 555, email dtolley@attwoodmarshall.com.au or free call 1800 621 071 at any time.
You can visit our experienced team at any of our conveniently located offices at Robina Town Centre, Coolangatta, Southport, Kingscliff, Brisbane, Sydney or Melbourne.
