Power of Attorney – Who Can Benefit?

Posted on March 26th, 2012

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by Robert Lindsay

Robert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

Section 12(1) of the Powers of Attorney Act 2003 provides that an Attorney appointed pursuant to a Power of Attorney cannot confer a benefit on himself or herself unless the Power of Attorney expressly allows the Attorney to do so. The Attorney is bound to act in the best interests of the person granting the Power of Attorney. However, circumstances can arise where it is appropriate that an Attorney is in a position to benefit himself or herself. Consider the scenario where a couple own their home. The husband develops dementia and is placed in care, a distance from their home. The wife decides to sell their home to be closer to her husband. In doing so, she acts as Attorney for her husband who lacks contractual capacity. She signs the Contract and Transfer as his Attorney. After selling, she would like to buy another home to live in, close to her husband so that she can visit him frequently. Unless the Power of Attorney (by the husband in favour of his wife) includes a Clause under Section 12(2) of the Powers of Attorney Act, authorising the wife to confer benefits on herself to meet her reasonable living and medical expenses, then she is precluded from using her husband’s one half share of the proceeds of sale when purchasing a replacement home.

This can be a real issue, particularly if the marriage between the husband and wife is a second marriage, and the husband has children from the first marriage. They may well be concerned if any subsequent property is in their step-mother’s name only which may have ramifications for them when their father dies. If the Power of Attorney has a Clause pursuant to Section 12(2)(b) then the wife can purchase a home in her sole name, using the whole of the proceeds of sale of the previous property. If not, then she may be precluded from doing so.

A Power of Attorney is an important document and in some circumstances, a powerful document.

Robert Lindsay is a Director at Mullane & Lindsay, and practises extensively in Commercial Law, Property Law and Wills & Estate Planning. If you require any assistance in this area please contact Robert Lindsay to arrange a consultation or contact our Newcastle office.

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