While you are in prison you might find it difficult to look after your financial affairs. You can give someone else the power to act on your behalf in regard to managing your affairs.

In some circumstances you might simply need to write a letter to an organisation (eg your bank or the telephone company) which gives a particular person permission to do a specific task eg, check the balance of your bank account OR arrange for closure of your telephone account.

A "power of attorney" is a legal document by which you formally appoint (give permission for) another person to act on your behalf in managing your affairs.

There are 2 types of power of attorney you can use

1  'Ordinary' Power of Attorney Only effective while you have "the capacity to make your own decisions."

2  Enduring Power of Attorney (EPA) An EPA can come into effect immediately, on a given date, or only after you have lost the capacity to make your own decisions.  "Having the capacity" to make your own decisions means that you have the mental ability to understand the issues surrounding your situation and can make your own rational decisions using that understanding.

Which type of power of attorney is best for you (if you need one at all) will depend on your particular circumstances.

'Ordinary' Power of Attorney

An ordinary power of attorney is a document in which you appoint another person to act on your behalf. You can state how much power you want to give that person. This type of power of attorney can be useful where a person finds it physically difficult to perform tasks necessary to manage their property or financial affairs. (eg because they are going on holiday overseas, are hospitalised for a period, or are in prison).

An ordinary power of attorney can only be given, and remain in operation while, you have the capacity to make your own decisions.

You can limit how much power you want to give

You can specify exactly how much you will allow that person to do and under what circumstances they may take action. You may, for example just want to give them permission to operate your bank account and arrange for your telephone and electricity supply to be disconnected, OR you may want them to perform more complex tasks such as the selling of your house.

Where real estate transactions are a possibility, the power of attorney MUST be registered with the Department of Land Administration (DOLA) before any transfer can take place. There is a registration fee of around $60.00.

You can also specify the geographic area in which the power of attorney can be exercised, for example, form tasks relating to assets within Western Australia.

If you want the power of attorney to be effective overseas you should definitely seek further information and legal advice. Other countries may have their own legal requirements for a power of attorney to be effective.

The length of time a power of attorney can be effective will depend on a number of factors

The length of time you specify it should be effective for
(eg for a period of 6 months),

AND/OR

Upon the completion of particular tasks specified by you
(eg the sale of your house).

The withdrawal of the power of attorney by you. You must do this in writing (and register the withdrawal with DOLA).
The withdrawal from the agreement by the person who has agreed to act under the power of attorney.
An ordinary power of attorney must end by law when the person you have appointed becomes aware that you have either died OR lost the capacity to make your own decisions.

The person acting on your behalf does not become responsible for your debts or the owner of your assets

The person who is acting on your behalf DOES NOT become responsible for you debts, or become the owner of your assets simply because they are acting under a power of attorney. The debts remain your responsibility, and your assets remain your property.

The obligations of the person who agrees to act on your behalf under a power of attorney.

When you give someone a power of attorney they are still acting on your instructions, they are not in charge of your assets.

They MUST:

carry out all acts you have allowed/directed them to do and not exceed the authority you have given them.
keep accurate records of actions taken
keep you informed about your affairs .
tell you if any "conflict of interests" arise where it would be difficult for them to act with your best interests in mind. (eg if you give power of attorney to your spouse, and the relationship breaks down at a later date " a conflict of interests" might arise).
Seek advice if they are uncertain as to what their responsibilities are.
If you incur losses because the person you have appointed does not meet their responsibilities

If the person you have given power of attorney to does not meet their obligations and you incur losses, you may have grounds for legal action against them. You should seek legal advice if you have concerns about the actions taken by the person you have appointed power of attorney.

You have obligations to the person acting on your behalf

You need to give the person who is acting on your behalf:

Clear directions as to what they can and cannot do.
As much relevant accurate information about your situation as you can.
Choosing someone to act on your behalf can be risky!

Basically it comes down to "WHO CAN YOU TRUST?" Giving someone the power to manage your property and finances is a serious decision and there certainly are risks involved. The person you give the power to should

Be in a position to take on tasks, eg, have the time to do it.
Understand that they have a legal responsibility to act in your best interests.
Have the knowledge, skills and abilities to do what you want them to do.
Not have a conflict between their interests and yours. Remember that relationships can change over time.
By giving someone the power of attorney you give that person the power to do things in your name. You should not give this power unless you are sure that they are honest and reliable.

Be realistic if you give power of attorney to someone who is a great friend, but has major difficulties in keeping their own affairs in order. There's a good chance that they won’t do very well managing yours either.

Appointing more than one person to act on your behalf may be one way of reducing the risks. You can appoint more than one person to act on your behalf and specify that they can only make decisions and/or perform actions together. (eg, both must sign documents to operate your bank account).

How to create a power of attorney

An ordinary power of attorney does not have to be written in a particular way or be drawn up by a solicitor, BUT you should be aware that the wording of the document is very important. The person you are asking to act on your behalf may not be able to do what you want because the wording can be interpreted more than one way OR you could inadvertently give that person more power than you intended to.

Most solicitors have a standard form which they adapt for each client.

The fee is usually around $100.00 - $150.00 but it could be more if you have complex issues.

Witnesses

Your signature on an ordinary power of attorney can be witnessed by any independent adult witness. Use the normal attestation clause:

" signed by me… ………..(insert your name)…..

in the presence of ……….. (insert the name of the witness)"

The witness’s full name, address and occupation should also be printed in block letters under their signature.

Where the power of attorney has to be registered (eg, where the sale of real estate requires registration with DOLA), two copies should be signed.

When the person given power of attorney signs documents on your behalf they should write the following words under their signature.

" Signed by me ……..(insert their name)……..

by his/her attorney……….(inset your name) …… "

pursuant to power of attorney (insert registration number if there is one). And I declare that I have no notice of revocation of the power of Attorney

An Enduring Power of Attorney (EPA)

An EPA differs from an ordinary power of attorney because it allows someone whom you have appointed, to act on your behalf after you have "lost the capacity" to manage your own affairs. It may commence and operate at any time before you lose that capacity if you choose.

An EPA can either start:

from a set date (eg the date you sign the document).
OR
from the date that you become unable to make rational decisions about your affairs. In this case the Guardianship and Administration Board must make a declaration that you lack the legal capacity to make decisions.

Scope of an EPA

An EPA allows the person you have given the authority to, to do anything you can lawfully do in regard to your affairs. You can impose conditions or restrictions on that power.

Where real estate transactions are a possibility any power of attorney must be registered with the Department of Land Administration (DOLA) before any transfer can take place. There is a registration fee of around $60.00

In the case of an EPA, it must be lodged with DOLA within 3 months of it being signed. If 3 months have lapsed you will have to sign a declaration that the EPA has not been revoked (withdrawn).

You can appoint anyone you trust

As with an ordinary power of attorney be aware of the risks involved and protect your interests.

The person you appoint has obligations to you

They must act with reasonable diligence in protecting your interests. Failure to do so may result in them being liable for any losses you incur.

They can apply to the Guardianship and Administration Board for clarification of terms of the power of attorney and direction as to how the power should be used.

The person/s you appoint must also keep accurate records of all transactions made on your behalf. A penalty of $2,000 may be imposed if they fail to do so.

You can appoint a maximum of two people to act on your behalf under an EPA

You can specify that they may act individually, OR can only act together.

Any person you have appointed can renounce their acceptance at any time before you lose the capacity to make decisions.

If you have lost the capacity to make your own decisions

The person you have appointed cannot renounce their responsibility under the power of attorney, but they can apply to the Guardianship and Administration Board to revoke or withdraw the power and/or have another person or persons appointed.

You can only sign an enduring power of attorney while you have the "capacity" to make your own decisions

You can revoke (withdraw) an EPA at any time, BEFORE you lose the capacity to make your own decisions.

Creating an EPA

The Guardianship and Administration Act 1990 (WA) sets out the procedures and requirements of creating an EPA. The simplest way of creating an EPA is to use the standard form which can be obtained from most newsagents. The State Law Publishers book shop stocks an EPA Kit which costs around $1.25.

The person you appoint to act on your behalf must sign a statement of acceptance which should be attached to the EPA. There is a standard form available for this.

Witnesses to an EPA

Your signature on an EPA MUST be witnessed by 2 persons who are able to witness statutory declarations.

For more Information about an EPA, contact one of the legal contact points attached to this information sheet, eg, The Guardianship & Administration Board.

POWER OF ATTORNEY - CONTACT POINTS

Guardianship and Administration Board Tel: (08) 9278 7350
Hyatt Centre Level 1 1800 191 009 Toll Free
30 Terrace Road

EAST PERTH 6004

Department of Land Administration

Tel: (08) 9273 7373
Cnr Morrison Rd & Great Northern Highway
MIDLAND WA 6056

The State Law Publisher Tel: (08) 9321 7688
PERTH WA 6000

WARNING! This information sheet is intended ONLY to provide general information and should not be regarded as legal advice. You may need to seek further information and/or advice about your personal circumstances.