An enduring power of attorney allows a person to appoint someone they trust to make decisions about their personal, health or financial matters at a particular time, for a particular period or when they are unable to make decisions for themselves. It’s an important document to have in place to plan for unforeseen circumstances, such as an accident, medical condition or mental illness. However, an enduring power of attorney confers significant legal rights to those who are appointed, and unfortunately, some attorneys mismanage their role. As a result, we are seeing dramatically rising disputes in this area.
An example of the issues that can arise occurred in the case of Pickersgill v Pickersgill & Ors [2019] QSC 268. A mother executed an enduring power of attorney appointing three of her six children as her attorneys for financial and health matters. The relationship between the siblings then broke down along gender lines which led to an argument over the mother and her finances. Two subsequent enduring powers of attorney made by the mother removed the warring factions, first appointing the four sons as attorneys, then removing them in favour of her two daughters. Both sides sought for the opposing enduring power of attorney to be deemed invalid.
During the proceedings, the mother’s capacity to sign the two recent enduring powers of attorney was called into question. She was then assessed by a doctor who noted a decline in her cognitive ability before the two documents were executed. This meant the mother could not make either of the enduring powers of attorney in question and these would be set aside, leaving the first document as the operative one. However, with the ongoing dispute between the siblings, this would not have been in the mother’s best interest. As a result, the siblings agreed to be removed as attorneys altogether and two independent individuals were appointed instead. There is no doubt that all parties would have incurred a significant cost before reaching this point.
It is clear that the choice of person to act as an attorney, follow instructions and make decisions in certain circumstances or occasions is a critical one. Therefore, when preparing an enduring power of attorney, careful thought should be given to who is being appointed as an attorney, when their power begins, what decisions they can make, and how they must make those decisions.
We recommend that people seek legal advice when making an enduring power of attorney and, as the case above illustrates, it’s best not to appoint siblings who don’t get along.
Written by Kylie Wilson | Holding Redlich Partner
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Disclaimer The views expressed in this content are those of the author, who is also responsible for any errors and omissions. Family Business Australia and New Zealand provides this article for your information only. The content of the article should not be taken as advice. If you wish to explore this topic, please consult an advisor who you consider to have the expertise to provide specific advice in relation to your family business. |
