This is a “plain English” summary of the main sections of the Powers of Attorney Act 2003 (NSW) – it is not a substitute for the terms of the Act itself, but may serve as a useful reference source – recourse should always be had to the exact terms of the Act.
The information contained in the summary was current as at 30 July 2009, but may have changed since then.
You should check the most recent version of the Act which can be found at
http://www.legislation.nsw.gov.au/
Who can be an Attorney
Your appointed attorney will not (at the relevant time) to be your attorney if:
1. You revoke their appointment;
2. They renounce their power;
3. They die;
4. They become bankrupt;
5. If a corporation, it is dissolved; or
6. They lose capacity to act as an attorney.[1]
Scope of Power
Your attorney will be able to enter into financial transactions and agreements on your behalf.[2]
You can place any conditions or limitations on your attorney's power by specifying those conditions or limitations in the power of attorney document.[3] You can extend (as well as restrict) the operation of your power of attorney by specifically stating so.
If you do not state any conditions or limitations in the power of attorney document your attorney will have a broad power and authority to do anything that you may authorise an attorney to do, subject only to the limitations contained in the Powers of Attorney Act.[4]
Limitations in the Act
Unless the power of attorney document states so, an attorney is not authorised to use your property to give gifts.[5]
Unless the power of attorney document states so, an attorney is not authorised to be paid or obtain any other benefit from your property.[6]
Unless the power of attorney document states so, an attorney is not authorised to pay, or give any other benefit to, any other person - other than as a result of a commercial transaction.[7]
The Act (and the standard form) sets out certain phrases that may be used to give the attorney a limited authority in relation to these matters. If those phrases are used you should read schedule 3 of the act to understand the extent and limits of those powers.
The Act contains other limitations, some of which are dealt with in this document.
Ordinary Power of Attorney
The authority of an attorney under an ordinary (non-enduring) power of attorney is limited to acts that are within your capacity to understand at the time the act is done.[8]
Enduring Power of Attorney
In order to create an enduring power of attorney the power of attorney document must state that it will continue to be effective even if at some time in the future you lack the mental capacity to understand the nature of acts it authorises the attorney to undertake, it must be properly witnessed, and its effect must be explained to you and understood by you.[9]
An enduring power of attorney is not effective until it is accepted by the attorney.[10]
An enduring power of attorney authorises the attorney to undertake acts within the scope of the power granted, even if you are unable, through mental incapacity, to understand the nature of the act at the time is undertaken. [11]
In the event your will gives rights to property and that property is dealt with by an attorney under an enduring power of attorney prior to conferral of that benefit, the beneficiary retains an equivalent interest in the property arising from at dealing (to the extent that any such property remains at the time of your death).[12] The effect of this may (on request) be amended by the Supreme Court if it is unintentionally unjust or disproportionate.[13]
Marriage and Other Circumstances
A power of attorney (ordinary or enduring) will continue to operate even after you marry, and even if there are significant changes in your personal circumstances. Unless the power of attorney document states otherwise, the power will continue to be valid until it is revoked, or otherwise terminated by a change in the circumstances of the attorney.
Review
A power of attorney can be reviewed by either the Guardianship Tribunal or the Supreme Court.[14]
An application may be brought by you, an attorney, your guardian, or any other person with “a proper interest in the proceedings or a genuine concern for the welfare of the principle”.[15]
When making orders relating to the “operation and effect” of the power, the tribunal must be satisfied “that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal".[16]
Directions
An attorney may seek advice or direction from the tribunal if the attorney is unsure how to discharge their duty, and is protected against liability for breach of duty by obtaining such a direction.[17]
The Supreme Court’s powers extend to making decisions when you cannot be contacted.[18]
How to Use a Power of Attorney
An attorney is authorised to execute documents on your behalf with their own signature and in their own name.[19]
If you want your attorney to be able to delegate any powers you have given them this must be stated in the power of attorney document.[20]
If more than one attorneys are appointed as “joint attorneys”, the power can only be exercised by them all in agreement, and the loss of one attorney accordingly terminates the power of attorney.[21]
Alternatively, if more than one attorneys are appointed “severally, or jointly and severally”, then the power is exercisable by any one of them alone, and is not terminated by the loss of any one attorney.[22]
Registration
You are not required to register your power of attorney, however a power of attorney can be registered with the Land and Property Information Division (LPI) of the NSW Department of Lands, (in which case a number will be given and recorded on the power, which can be checked, and a revocation can be registered against that number).
A power of attorney must be registered for an attorney to act on transactions affecting land.[23]
Revoking a Power of Attorney
If you do revoke your power of attorney you must notify your attorneys, as they may continue to act in reliance on the power given to them if not notified.[24]
If you are at all concerned about your attorney continuing to act even after notified, you should register the power and the revocation, as unaware third parties are entitled to rely on the power, even if revoked.[25]
Attorneys should also be aware that acting on a power that they know is terminated or suspended is punishable by imprisonment of up to 5 years.[26]
Spare Copies
For instructions on how to authenticate a copy of the power of attorney document, see section 44 of the Act.
Other Information
You should also read and understand the notes to the standard power of attorney found in schedule 2 of the Act, and if any prescribed terms are used, the notes to those terms found in schedule 3 of the Act.
Your attorney will be able to enter into financial transactions and agreements on your behalf.[2]
You can place any conditions or limitations on your attorney's power by specifying those conditions or limitations in the power of attorney document.[3] You can extend (as well as restrict) the operation of your power of attorney by specifically stating so.
If you do not state any conditions or limitations in the power of attorney document your attorney will have a broad power and authority to do anything that you may authorise an attorney to do, subject only to the limitations contained in the Powers of Attorney Act.[4]
Limitations in the Act
Unless the power of attorney document states so, an attorney is not authorised to use your property to give gifts.[5]
Unless the power of attorney document states so, an attorney is not authorised to be paid or obtain any other benefit from your property.[6]
Unless the power of attorney document states so, an attorney is not authorised to pay, or give any other benefit to, any other person - other than as a result of a commercial transaction.[7]
The Act (and the standard form) sets out certain phrases that may be used to give the attorney a limited authority in relation to these matters. If those phrases are used you should read schedule 3 of the act to understand the extent and limits of those powers.
The Act contains other limitations, some of which are dealt with in this document.
Ordinary Power of Attorney
The authority of an attorney under an ordinary (non-enduring) power of attorney is limited to acts that are within your capacity to understand at the time the act is done.[8]
Enduring Power of Attorney
In order to create an enduring power of attorney the power of attorney document must state that it will continue to be effective even if at some time in the future you lack the mental capacity to understand the nature of acts it authorises the attorney to undertake, it must be properly witnessed, and its effect must be explained to you and understood by you.[9]
An enduring power of attorney is not effective until it is accepted by the attorney.[10]
An enduring power of attorney authorises the attorney to undertake acts within the scope of the power granted, even if you are unable, through mental incapacity, to understand the nature of the act at the time is undertaken. [11]
In the event your will gives rights to property and that property is dealt with by an attorney under an enduring power of attorney prior to conferral of that benefit, the beneficiary retains an equivalent interest in the property arising from at dealing (to the extent that any such property remains at the time of your death).[12] The effect of this may (on request) be amended by the Supreme Court if it is unintentionally unjust or disproportionate.[13]
Marriage and Other Circumstances
A power of attorney (ordinary or enduring) will continue to operate even after you marry, and even if there are significant changes in your personal circumstances. Unless the power of attorney document states otherwise, the power will continue to be valid until it is revoked, or otherwise terminated by a change in the circumstances of the attorney.
Review
A power of attorney can be reviewed by either the Guardianship Tribunal or the Supreme Court.[14]
An application may be brought by you, an attorney, your guardian, or any other person with “a proper interest in the proceedings or a genuine concern for the welfare of the principle”.[15]
When making orders relating to the “operation and effect” of the power, the tribunal must be satisfied “that it would be in the best interests of the principal to do so or that it would better reflect the wishes of the principal".[16]
Directions
An attorney may seek advice or direction from the tribunal if the attorney is unsure how to discharge their duty, and is protected against liability for breach of duty by obtaining such a direction.[17]
The Supreme Court’s powers extend to making decisions when you cannot be contacted.[18]
How to Use a Power of Attorney
An attorney is authorised to execute documents on your behalf with their own signature and in their own name.[19]
If you want your attorney to be able to delegate any powers you have given them this must be stated in the power of attorney document.[20]
If more than one attorneys are appointed as “joint attorneys”, the power can only be exercised by them all in agreement, and the loss of one attorney accordingly terminates the power of attorney.[21]
Alternatively, if more than one attorneys are appointed “severally, or jointly and severally”, then the power is exercisable by any one of them alone, and is not terminated by the loss of any one attorney.[22]
Registration
You are not required to register your power of attorney, however a power of attorney can be registered with the Land and Property Information Division (LPI) of the NSW Department of Lands, (in which case a number will be given and recorded on the power, which can be checked, and a revocation can be registered against that number).
A power of attorney must be registered for an attorney to act on transactions affecting land.[23]
Revoking a Power of Attorney
If you do revoke your power of attorney you must notify your attorneys, as they may continue to act in reliance on the power given to them if not notified.[24]
If you are at all concerned about your attorney continuing to act even after notified, you should register the power and the revocation, as unaware third parties are entitled to rely on the power, even if revoked.[25]
Attorneys should also be aware that acting on a power that they know is terminated or suspended is punishable by imprisonment of up to 5 years.[26]
Spare Copies
For instructions on how to authenticate a copy of the power of attorney document, see section 44 of the Act.
Other Information
You should also read and understand the notes to the standard power of attorney found in schedule 2 of the Act, and if any prescribed terms are used, the notes to those terms found in schedule 3 of the Act.
Some specific things to think about
Why do you want/need a power of attorney?
What do you want/need your attorney(s) to be able to do?
What don’t you want/need your attorney(s) to be able to do?
How and in what areas are your views different to or likely to be different to those of your attorney(s)?
How will you ensure that your attorney(s) put your interests (and preferences) first?
Why do you want/need a power of attorney?
What do you want/need your attorney(s) to be able to do?
What don’t you want/need your attorney(s) to be able to do?
How and in what areas are your views different to or likely to be different to those of your attorney(s)?
How will you ensure that your attorney(s) put your interests (and preferences) first?
____________________
[1] Sn 5
[2] Sn 9
[3] Sn 9
[4] Sn 9
[5] Sn 11
[6] Sn 12
[7] Sn 13
[8] Sn 18
[9] Sn 19
[10] Sn 20
[11] Sn 21
[12] Sn 22
[13] Sn 23
[14] Sns 26-42, see esp Sns 31, 33, 35, 36, and 42
[15] Sn 35
[16] Sn 36(4)
[17] Sn 38
[18] Sn 42
[19] Sn 43
[20] Sn 45
[21] Sn 46
[22] Sn 46
[23] Sns 51 and 52
[24] Sn 47
[25] Sn 48
[26] Sn 49
