A Power of Attorney is a powerful tool – trust who you appoint

A POWER OF ATTORNEY IS A POWERFUL TOOL – TRUST WHO YOU APPOINT

A recent case in the Supreme Court of NSW illustrates that you should only appoint a person you trust (100% trust) under a Power of Attorney.

In that case, an elderly person, Dr Alan Grant, gave a power of attorney to his eldest daughter, Nerez. Nerez used the power of attorney to transfer Dr. Grant’s home to her own daughter, Kashaya, with no money paid to Dr. Grant for the transfer of his property.

Nerez also transferred money out of Dr. Grant’s bank accounts and those transactions left Dr. Grant without the capacity to meet his nursing home outgoings.

When Dr. Grant died his executors commenced proceedings to recover the property and the monies.

Nerez said that the transfer of the property to Kashaya was a gift that Dr Grant had always wanted to make to Kashaya, so she could provide a home for Nerez. After the transfer, Kashaya had leased the property to Nerez for life with no payment of rent. Nerez said that the transfer of monies from Dr. Grant’s account to her were gifts from Dr. Grant to her.

The Court held that the transactions were in breach of Nerez’s fiduciary duty and beyond the authority conferred by Dr. Grant’s power of attorney to Nerez as that power of attorney did not authorise Nerez to take any benefits.

An attorney under a Power of Attorney:

1. Must always act in the principal’s best interests.
2. Must keep his/her own money and property separate from the principal ‘s money and property.
3. Must keep reasonable accounts and records of the principal ‘s money and property.
4. Unless expressly authorised, cannot gain a benefit from being an attorney.
5. Must act honestly in all matters concerning the principal ‘s legal and financial affairs.

If you appoint someone as your attorney (and there are many good reasons to appoint an attorney) the guiding rule is that you have 100% trust in that person.

If you are contemplating executing a Power of Attorney or have executed a Power of Attorney and seek advice on its effect, Kathy Chase of Pittwater Family Lawyers can assist you. Please telephone Kathy on (02) 9918 6565 or 0418 285 307 or send her an email at: pittwaterfamilylawyers@gmail.com