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Enduring Powers of Attorney and Conflicts

Quite often people to appoint a family member as enduring power of attorney. It may be a spouse, a partner, or one of their children. Whilst this is a common practice, it can create difficulties if you don’t understand the restrictions that the law places on attorneys in respect of certain decisions.

Were you incapacitated, a family member can be restricted from using your share of the family home to buy a new property to help with your care if they are going to live in it. They may also be restricted from purchasing your assets, to keep them 'in the family', even if they have the means and desire to do so.

But the good news is that such conflict actions are not illegal where they are specifically authorised.

Through the careful drafting of an enduring power of attorney you can avoid such problems. 

If you are unsure, you should check your documents and if you have any concerns that the issues have not been dealt with, get in contact with your lawyer.

More Information

It’s not uncommon for people to appoint an enduring power of attorney to a family member - possibly a spouse, a partner, or one of their children. Whilst this is a common practice, it can create difficulties if you don’t understand the restrictions that the law places on attorneys in respect of certain decisions.

If you and your spouse jointly own the family home and then you have lost capacity and your spouse, who is your attorney, sells the home in order to downsize or to free up funds to pay for your care, then, at law, a part of the proceeds of the sale will be your property, not your spouses.

The rule against conflicts of duty and interest may then apply in such a way that your spouse could not use your share of the sale proceeds to purchase a new residence for their own use, even if you were still living in it together.

A further example is where your attorney needs to sell an asset of yours to pay for your care but does not want the asset to go outside the family. The same rule against conflicts would stop the appointed attorney from purchasing the asset from you, despite having the funds and the desire to do so.

The good news is that such conflict actions are not illegal where they are specifically authorised.

Careful drafting of an enduring power of attorney can avoid such problems. So you should check your documents and if you have any concerns that the issues have not been dealt with, get in contact with your lawyer.

If you need advice about enduring powers of attorney or wills or any other aspect of estate planning then please contact us on 07 5443 9988 or [email protected].

Argon Law is a Sunshine Coast law firm based in Maroochydore.  We are commercial lawyers and property and body corporate lawyers and are eager to assist you in any way we can.

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