It’s not uncommon for people to appoint a family member under an enduring power of attorney.
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.
I’m John Gallagher from Argon Law, and the
issue that's at stake here is that an attorney is
prohibited from acting in ways that brings
their personal interest into conflict with
their duty as attorney.
For example, if you and your spouse jointly
own the family home and then you have lost
capacity and your spouse, who is your appointed
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 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 desire to do so.
But 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 give Argon Law a call.
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