Financial powers of attorney – a trap!

Often a person making a financial power of attorney appoints two or more persons to act jointly. “Jointly” has a specific legal meaning – all of the attorneys must agree in relation to any act undertaken under the power. There is nothing inherently wrong with this at all, and it is something that can limit the possibility of financial abuse occurring. However, the law relating to enduring financial powers may bring about an unintended consequence. In the event that one of the joint attorneys dies or becomes incapacitated and cannot continue in that role, the whole power becomes invalid.

 

It may be thought that if one of the joint attorneys can no longer act for any reason, the remaining attorneys could continue – but this is not the case.
The great danger in this is that if the donor of the power becomes incapacitated, he or she will be unable to make a new power, and will be left without any representative. This would usually mean a trip to VCAT to have an administrator appointed – with all the inconveniences that involves.
There are ways around this, but we will leave this for another article.
© Peter Gauld LL.B.
Peter J. R. Gauld LL.B
Gauld & Co. Elder Law Solicitors
Suite 5, 1st Floor,
838 Glenferrie Road,
Hawthorn, Melbourne, Australia, 3122.
03 9024 3868
0401 230 711
gauld.co@gmail.com