If you appoint someone as your attorney, they have certain responsibilities and duties they must observe while managing your affairs. The good thing is there is plenty of information and support available to guide your appointed attorney in their role.
The powers and responsibilities of an attorney can vary depending on the type of POA you have made, the state or territory where you live, and your wishes as the principal.
There are two main types of POA:
• General POA: A General POA allows your attorney to make financial and legal decisions, but this power ends if you lose mental capacity. Therefore, an attorney who has been appointed under a General POA must stop acting on your behalf if you lose mental capacity.
• Enduring POA: An Enduring POA allows your attorney to make financial and legal decisions even if you lose mental capacity. Mental capacity means your ability to understand what is going on, make informed choices, and communicate what you have decided. Mental capacity may deteriorate due to dementia, stroke or various other brain injuries.
Responsibilities of an attorney include acting in your best interests, avoiding conflicts of interest, and keeping accurate records of all transactions and decisions made.
As the principal, you can empower your attorney to do specific things, and you can put limits or restrictions on what your attorney can do on your behalf. You can also stipulate that they can only act for you if certain conditions are met – for example, while you are overseas, or only once you have lost capacity.
One important duty is that an attorney must avoid conflicts between your interests and theirs, unless this has been authorised by you. For example, it may be a conflict of interest for your attorney to nominate themselves as your life insurance beneficiary, unless you have authorised this.