Monday, February 28, 2011

How many powers of attorney does it take to create authority?

With increasing regularity, we are seeing issues arise in relation to the authority for people to act under powers of attorney.

Like many laws, the power of attorney legislation is frustratingly inconsistent, with different acts applying in each Australian state and territory.

In theory, there is also legislation requiring each jurisdiction to recognise the documentation prepared in each of the states. In practice however, it is often extremely difficult to convince third parties that a power of attorney document that looks completely different to what they normally expect to see is in fact legally binding.

One solution (although admittedly not a particularly efficient one) we are seeing more people implement is to have a separate power of attorney prepared under each jurisdiction where they are likely to spend significant periods of time. While not a perfect solution, this approach can provide significant practical benefits.

There is an ongoing push, as part of having uniform succession laws across Australia, for the power of attorney laws to also be made consistent. The timeline for achieving such an outcome is difficult to predict given the number of vested interests involved.

Until next week.