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Can I Revoke Enduring Power Of Attorney?
Signing away the rights to manage your own life comes with risks. But, if you’re facing a difficult health diagnosis, dealing with the reality of managing your affairs when you’re unable to is something lots of people must face.
And, if you have elderly parents or other relatives looking to lock down legal requirements around their own future, you may be looking at this issue from the other side – and perhaps you’re the one being asked to be in control.
Understanding the ramifications of enduring power of attorney appointments – and how to revoke enduring power of attorney if things go wrong – is important.
The true power of enduring power of attorney
Essentially, granting someone enduring power of attorney means that you’re handing control of your money and other assets to someone else, with the hope they have your best interests at heart. In most cases, this responsibility is managed carefully. But, sadly, money can make people do strange things – even when they are someone you love. And because giving a non-professional (such as a family member or a friend) enduring power of attorney is the same as presenting them with a blank cheque connected to your bank balance, the truth is that stories of misuse around enduring power of attorney documents aren’t uncommon.
Expert Ease invited the specialists from DDCS Lawyers in Canberra to share their insights around appointing power of attorney in the first place, and how to revoke it.
What is an enduring power of attorney?
Generally speaking, there are two types of powers of attorney. A general power of attorney and an enduring power of attorney. In a general power of attorney, the principal gives the attorney power to do something on their behalf (usually related to financial matters) because they are not available to do it. For example, someone may have gone overseas and then need someone to be able to sign a document while they are away. (Although, that’s less applicable these days with technology.) The attorney can exercise the power immediately, with no requirement for the attorney to establish a lack of capacity on the part of the principal.
On the other hand, an enduring power of attorney continues (and often only commences) to operate in circumstances where the principal has lost cognitive capacity to do whatever is required to be done. So, their decision-making capacity is impaired, and they can no longer do it.
An attorney appointed pursuant to an enduring power of attorney is entrusted by the principal with significant power. The attorney can literally do anything that the donor could do for themselves if they had the capacity to do it. However, in exercising the powers given to them, the attorney has what is called a ‘fiduciary obligation’ to the principal and must only act in a way that benefits the principal unless the document appointing them specifically empowers them to do things that benefit someone other than the principal.
There are a number of specific obligations that an attorney has to their principal. However, the overriding principle is that the attorney must avoid transactions that result in conflict between their duty to the principal and their own interest. They must also avoid transactions where there is a conflict between the principal’s interests and the interests of one of the attorney’s relatives, business associates or friends.
Revoking a power of attorney and removal of an attorney
A principal who does not have impaired decision-making capacity is free to revoke their enduring power of attorney and put in place a new one at any time. This may be because of a change in circumstance or, alternatively, if there is a falling out between the principal and the attorney.
What if the person who appointed the enduring power of attorney is no longer capable of decision-making?
The situation is a little more complicated in circumstances where the principal has lost capacity. Sadly, we are often requested to provide advice in circumstances where a principal has lost capacity and their attorney has fallen short of their obligations and/or abused the rights of the principal. In most cases our client will be a close relative of both the principal and the attorney. For example, an attorney might instruct the residential care facility where the principal is living not to let a sister, brother, or child visit the principal. Or, a relative of the principal may become concerned about the way in which the attorney is managing the financial affairs of the principal. If such concerns exist, then there is a tribunal process in each state and territory that enables an interested party to make an application to a tribunal, including for an order removing the attorney. In the ACT, such applications are made to the ACT Civil and Administrative Tribunal (ACAT). In New South Wales the application is made to NCAT; in Victoria to VCAT and in Queensland to QCAT. There is different legislation in each state and territory governing such applications, however, in general terms each tribunal is given power to make orders regulating the actions of the attorney and/or removing and replacing the attorney with a guardian and/or financial manager in cases where there has been a breach or abuse of the attorney’s powers and obligations.
The bottom line:
Imagine if your mum was sick and made her firstborn (your big brother) enduring power of attorney. Now imagine that that big brother of yours has a not-so-secret gambling habit and is abusing his powers by dipping into your mum’s bank account and selling off her assets. Meanwhile, she’s in a nursing home with a dementia diagnosis and you don’t know what to do – but you know what’s left of your mum’s estate is quickly disappearing.
Can you revoke enduring power of attorney? YES!
Depending on where you live in Australia it can be more or less complicated.
Step 1, contact a lawyer. The next steps could involve everything from contacting financial institutions to make sure no more money is going missing, but your lawyer will have the best advice around what needs to be done to prevent further loss. And if you’re facing choosing your own enduring power of attorney, think wisely and get the best possible legal advice to help protect your financial future.
Go deeper: What happens to your digital data when you die?
Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
