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Enduring Power of Attorney Protections

EPOA protections

Attorneys have a strict duty to act in a principal’s best interest when managing their money, property, and other affairs under an Enduring Power of Attorney (EPOA) – for more detail, see our earlier article, EPOA Responsibilites and Duties. Indeed, given their vulnerable nature, principals are granted a number of protections that can present obstacles when the person being gifted is the attorney themselves.

Property and Legal recently advised on whether an attorney was able to gift to themselves from a principal’s estate under an Enduring Power of Attorney. The short answer is yes – however, section 87 of the Powers of Attorney Act 1998 (Qld) provides for a presumption of undue influence in any transaction between an attorney under an EPOA and the principal. An attorney should be aware of this presumption and will need to be able to rebut it should a gift be challenged.

Making a case for rebuttal

Rebutting the presumption of undue influence is not a straightforward issue – there are a number of factors that can be referenced in support of a rebuttal, but none are generally considered sufficient on their own.

In order to make a good case for rebuttal, an attorney should aim to demonstrate as many of the following statements to be true as possible:

  1. the principal has received legal and financial advice separate from the attorney and their advisors, noting this may be difficult where the principal lacks legal “capacity”;
  2. the gift is similar in size and type to others made before the attorney was appointed;
  3. the gift would reasonably have been made where the principal had capacity to make the decision themself; and
  4. the principal is aware and understands the implications of the gift – again, this may be difficult to show where the principal lacks legal “capacity” (as with the first point).

It is common for a principal to choose someone close to them as their attorney, and equally common for the attorney themselves to be an intended recipient of a gift from the principal’s estate. In such cases, it can be difficult to claim the attorney did not have the opportunity and position to influence the principal into making the gift. For this reason, it will be crucial that the attorney can show that the gift is one which the principal would reasonably have made, and that they have sought independent legal and financial advice before doing so.

More articles on this topic:

Enduring Power of Attorney: Who should you appoint?

Enduring Power of Attorney: Revoking an appointment

Changes to Enduring Power of Attorney laws for Queensland