Powers of Attorney

A 'power of attorney' is a document a principal (a person or company) can sign to appoint another person (called the attorney) to act for the principal in relation to financial affairs, property matters or even, in some States, lifestyle matters such as medical treatment or where the principal lives and how they are cared for.

The most common use of a power of attorney is the appointment of a principal’s spouse or other close relative to deal with the principal’s property if the principal becomes of unsound mind. This is the enduring power of attorney (EPOA).

But powers of attorney have wider uses than this.

The first is in the area of superannuation. An EPOA allows enduring attorneys to act as trustee (or director of the corporate trustee) of a self managed superannuation fund in place of the member are an important exception to the member-trustee requirement of SMSFs.

This enables individuals to keep their SMSF and remain a member.  It gives them the freedom to pursue lifestyle interests, live overseas and become non-resident, or to enjoy the benefits of longevity without having to run their SMSF.

The second additional use of a power of attorney is for client share trading.  A limited power of attorney (LPOA) can be a very useful document for authorising and implementing some aspects of share trading for the principal by their broker or planner.

For further information or advice on the benefits and use of a power of attorney, please call our Help Desk on 02 8296 6222.