Enduring Powers of Attorney in South Australia: Choosing the Right Person to Manage Your Affairs

The decision to grant another person authority over your financial affairs is not one to be taken lightly. Yet it is a decision that every adult should address, because the alternative — having no plan in place if you lose capacity — can be far more disruptive, far more expensive, and far harder on your family than any act of foresight could be.

An Enduring Power of Attorney (EPOA) is the legal mechanism by which you authorise another person to manage your financial and property affairs. This article explains what an EPOA is, how it differs from other documents, how to choose your attorney, and what you need to know before you sign one.

What Is an Enduring Power of Attorney?

A Power of Attorney is a legal document in which you (the ‘donor’) appoint another person (the ‘attorney’) to act on your behalf in relation to your financial and legal affairs. A standard Power of Attorney ceases to operate if you lose mental capacity. An Enduring Power of Attorney — as the name suggests — endures beyond the loss of capacity and remains effective precisely when it is most needed.

In South Australia, Enduring Powers of Attorney are governed by the Powers of Attorney and Agency Act 1984 (SA), which has been supplemented and modified by subsequent legislation. The EPOA authorises your attorney to deal with your bank accounts, pay your bills, manage your investments, sell property, and generally conduct your financial affairs as if they were you — subject to any limitations you specify in the document.

It is important to note that an EPOA in South Australia covers financial and property matters only. Health, medical, and personal care decisions are addressed through a separate instrument — the Advance Care Directive — which is governed by the Advance Care Directives Act 2013 (SA). A complete incapacity plan includes both.

When Does an EPOA Become Active?

An EPOA may be drafted to take effect immediately upon signing, or only upon the occurrence of a specified event — most commonly the loss of the donor’s mental capacity. The latter is sometimes called a ‘springing’ EPOA, because it springs into effect upon the triggering event.

If you choose a springing EPOA, the document should specify how incapacity is to be established — for example, by a certificate from a medical practitioner confirming that you no longer have the capacity to manage your own affairs. Precision on this point avoids uncertainty and potential dispute at a later stage.

An EPOA that takes immediate effect is sometimes preferred where the donor wishes their attorney to be able to act on their behalf from time to time even while the donor retains capacity — for example, where the donor travels frequently or has difficulty attending to paperwork personally. Where this approach is taken, the trust relationship between donor and attorney is particularly important, because the attorney’s authority to act is not contingent on any particular event.

Choosing Your Attorney

The choice of attorney is the most consequential decision in the entire EPOA process. Your attorney will have broad authority over your financial life, potentially for an extended period. They will be handling your money, your property, and your financial welfare at a time when you are not in a position to supervise or correct them.

Considerations that should inform your choice include:

• Integrity and trustworthiness above all. Financial elder abuse — the misuse of an EPOA to benefit the attorney at the donor’s expense — is unfortunately common and often perpetrated by family members. The person you appoint must be someone whose honesty you trust without reservation.
• Financial competence. Your attorney does not need to be a qualified accountant, but they should have sufficient financial literacy to manage accounts, investments, and property dealings responsibly.
• Availability and proximity. Managing another person’s financial affairs, particularly if that person requires residential care, can be time-consuming. Your attorney should be someone who is genuinely available to perform the role.
• Willingness to act and awareness of the responsibilities involved. Before you finalise your EPOA, your prospective attorney should be told of the appointment and should confirm that they understand and accept the responsibilities that come with it.
• Absence of conflicts of interest. Your attorney should not stand to benefit personally from decisions they make on your behalf, beyond any express authority you grant them in the document.

An attorney appointed under an EPOA is in a position of trust. The law holds them to a fiduciary standard — they must act in your interests, not their own. They must not use their authority to benefit themselves or third parties unless you have explicitly authorised this in the EPOA.

Can I Appoint More Than One Attorney?

Yes. South Australian law permits you to appoint multiple attorneys, either to act jointly (meaning all must agree before any decision is made) or jointly and severally (meaning any one of them may act independently). You may also appoint successive attorneys, so that if your first choice is unable or unwilling to act, the authority passes to your second choice.

Joint appointment provides a checking mechanism but can cause delays if the attorneys cannot agree or if one is temporarily unavailable. Severally appointment is more flexible but requires a higher degree of trust in each individual attorney. The right structure depends on your personal circumstances and the nature and size of your financial affairs.

Where multiple attorneys are appointed to act jointly, it is advisable to address in the EPOA — or in a separate document — how disagreements are to be resolved, and what is to happen if one attorney loses capacity, predeceases you, or is otherwise unable to continue.

What Limits Can I Place on My Attorney’s Authority?

An EPOA need not be an unlimited grant of authority. You may impose conditions or restrictions on your attorney’s powers — for example:

• Limiting the attorney’s authority to certain categories of transaction (such as managing day-to-day banking but not selling real property without further consent);
• Requiring the attorney to consult with a specified person before making decisions above a particular threshold;
• Prohibiting the attorney from making gifts to themselves or to third parties;
• Requiring the attorney to keep records and provide accounts to a nominated person periodically.

The more specific the conditions you impose, the more important it is that those conditions are clearly and unambiguously expressed. Vaguely worded restrictions can be difficult to enforce and may give rise to dispute. Precision is essential.

Important: An attorney under an EPOA is generally not permitted to make gifts, loans, or benefits to themselves or to third parties unless the EPOA expressly authorises this. An attorney who does so without authority commits a breach of their fiduciary duty and may be personally liable for any loss suffered.

What If I Have No EPOA and Lose Capacity?

If you lose capacity to manage your financial affairs and have no EPOA in place, no one — not even your spouse or your adult children — has automatic legal authority to deal with your financial affairs on your behalf. Your bank accounts will become inaccessible (other than for joint accounts). Your investments cannot be managed. Bills may go unpaid. Property cannot be sold, even if that is necessary to fund your care.

The only mechanism for addressing this situation is an application to the South Australian Civil and Administrative Tribunal (SACAT) for the appointment of an administrator. SACAT may appoint a family member, a private administrator, or the Public Trustee to manage your affairs. This process is considerably more expensive, slower, and more cumbersome than simply having an EPOA in place from the outset. It is also not subject to your control — SACAT appoints the administrator it considers appropriate, which may not be the person you would have chosen.

Reviewing and Revoking an EPOA

An EPOA can be revoked at any time while you retain capacity, provided you follow the appropriate legal requirements for revocation. You should review your EPOA periodically — particularly after major life events such as a change in your financial circumstances, the death or incapacity of your attorney, or a change in your relationship with the person appointed.

If you have concerns about the way your attorney is exercising their authority, you should seek legal advice promptly. SACAT has jurisdiction to review and set aside decisions made under a Power of Attorney where there is evidence of misuse.

Conclusion

An Enduring Power of Attorney is not a document to be signed in haste and filed away without further thought. It is a serious legal instrument that, in the right hands, can be an extraordinary gift to yourself and your family. In the wrong hands, it can cause serious harm.

Take the time to choose your attorney carefully, to consider whether limitations on their authority are appropriate, and to discuss the document with an experienced practitioner before you sign. The team at Genders and Partners has long experience in advising clients on powers of attorney and related incapacity planning, and would be pleased to assist you in getting this foundational document right.

Want to Find Out More?

If you would like further advice about Enduring Powers of Attorney or any aspect of incapacity planning and estate planning in South Australia, our team is here to assist.

When it comes to Wills, Probate, Deceased Estates, asset protection and estate planning in Australia, you can trust the oldest law firm in South Australia – Genders & Partners – to guide you through the tough decisions you must make for your family’s future care and welfare.

If you have any questions or would like further information, or a quick phone call to discuss, book a timeslot for a free 15-minute phone consultation.

We can help you to protect yourself and your family. We look forward to being of service.

More Power of Attorney and Estate Planning Resources

• FAQs
• Videos – Enduring Powers of Attorney and Planning for Incapacity
• What is an Enduring Power of Attorney and Why Do I Need One?
• What You Need to Know About Advance Care Directives in South Australia
• Wills and Estate Planning – Articles and Resources

All these and many more estate planning topics are available for discussion with the oldest law firm in South Australia. Visit our articles page to explore our complete library of resources.

DISCLAIMER: This article is intended as general information only and does not constitute legal advice. The law relating to powers of attorney is complex and individual circumstances differ significantly. You should obtain specific legal advice from a qualified practitioner before taking or refraining from any action. Genders and Partners accepts no liability for reliance on this article without such advice.

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Rod Genders is a senior Australian lawyer specialising in trusts, Wills and estate planning, accident compensation, and probate and deceased estate administration in Adelaide and all over South Australia. His boutique specialist law firm, which was founded on 1848, is one of the oldest and most respected in Australia. Rod is also a prolific author and speaker.  Some of his articles and books on Wills, Probate, Trusts, Estate Planning, Asset Protection and Retirement Planning may be found at www.genders.com.au.

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