EPOA may be onerous responsibility

Clients without appropriate family nearby may request a trusted solicitor to act as their attorney under an Enduring Power of Attorney. Such appointments, whilst flattering, always entail considerable responsibility without the guarantee of remuneration at a professional hourly rate.

It is also possible for a solicitor to be appointed with mutual intention that the document be used only for a specific transaction or series of transactions. Unless the appointment reflects that limited scope, the practitioner may be unwittingly accepting a very long-term responsibility.

If you are not intending to accept an enduring appointment, a general appointment (Form 1) should be used. If you are intending to accept an enduring appointment, give serious consideration as to whether you have the capacity to discharge the responsibility properly and explore alternatives with your client. Consider also asset and business operation structures. A personal appointment may not encompass duties as Trustee or Director. Such appointments may also lapse if the client loses capacity.

Unintended responsibilities

Some time ago, solicitor D was appointed as Mr S’s attorney to sign some leasing documents while the client was overseas. Mr S was a wealthy person with diverse property and business interests.  A standard EPOA form was used. Mr S was seriously injured during that holiday, suffering life-altering brain injuries. The solicitor inherited the task of managing Mr S’s properties, businesses, care arrangements, taxation affairs and a blended family that was in perpetual dispute. Even the process of finding and restricting access to all the bank and credit accounts took weeks, and started a bitter argument with at least half the family. The remuneration clause in the EPOA form covered only a fraction of the necessary work. The responsibility extended over a decade until a professional trustee company was appointed by court order.

Remuneration

Even a well-drafted remuneration clause does not entitle us to simply charge our standard hourly rate for work of a personal or administrative character. Professional rates may only be charged for professional work, and just because the work is done by a lawyer or law firm does not bring it into that category.¹

For example, the task of selling a residence, clearing the property and finding aged care accommodation will be – for the most part – administrative work that would not justify a solicitor’s hourly rate. The fact that the hour you spent doing that work could have been spent on legal work at your standard charge out rate is immaterial. If you don’t have a competent paralegal or reputable outsourced provider to delegate that work to, it will have to be done by you at a lower rate appropriate to the complexity of the task.²

Does the clause in the document evidence “informed consent” to charge required by your fiduciary obligation? A prudent solicitor will discuss the terms of the remuneration clause carefully and confirm the advice in writing. Issues such as:

• The fact that a friend or family member may not charge for their assistance;
• That other service providers such as a private trustee company or the Public Trustee may be available and at comparable price; and that
• The client should consider independent legal advice as to the remuneration provisions before signing the document
  
  should be canvassed then documented.

The instrument should expressly permit the solicitor to instruct their own firm for legal work. The remuneration clause should also permit the solicitor to outsource or to brief non legal work to administrative staff within the firm and specify the basis on which this will be charged.³

Please see QLS Guidance Statement No 10. Power of attorney (solicitor attorney remuneration) for more comprehensive guidance on navigating the challenges that arise for solicitors acting as an attorney.⁴

An onerous responsibility

One of the more pressing tasks is ensuring that you have control over all finances, have claimed all entitlements the Adult can properly obtain and that legitimate debts (including family loans) are pursued. The client’s accounts are “Power Money” and subject to audit and record keeping obligations. The better your client’s record keeping, the easier your task will be – in particular, recording whether payments to friends and family are loans, care and maintenance or gifts.

If you can convince your client to keep an approximately up-to-date dossier recording location of assets, what donations, family maintenance (such as expenses for university aged children or aged parents) and other responsibilities they would like to continue, this will make your life much easier if you suddenly need to take over someone’s affairs. Instructions concerning pets are also important.

Go looking for trouble

Appointment as attorney requires a mindset change from your usual relationship with clients. An attorney’s duties are not just reactive but proactive. You cannot wait for someone to tell you there is a problem before acting. An attorney should check in with the Adult on reasonable intervals to determine whether they are still capable of managing their own affairs, or at least have authority to discuss such issues with their support network.

A particularly difficult area is monitoring the Adult’s relationship with carers, friends and family to protect them from exploitation and abuse. The scope of an Attorney’s responsibility in this respect is far wider than a solicitor’s. As a solicitor you may be entitled to step in to defend your client’s interests (generally on instructions, but not always) but usually not obligated to do so.

A complex balance defending the Adult’s interests while also respecting their wishes and sustaining supportive relationships must be struck. To do that most effectively you should maintain contact with the Adult to ensure that you have enough background about their social, financial and health context.

This will enable you to make good decisions for them when they are unable to do so themselves or – even more difficult – when they are in the penumbral phase of requiring support for more complex decisions. Balanced against this is the cost and the need to ensure that the client does not perceive your interest as that of a vulture circling for the purpose of enumerating their remaining marbles for your own purposes.

You cannot delegate general responsibility to a co-attorney. If they are a family member with more day-to-day contact, they might properly be the appropriate source of many decisions and day-to-day tasks, but you should coordinate to ensure it is clear who is doing what. You also have a mutual audit and supervisory responsibility. If a joint appointment, you may remain responsible for losses even if it had been arranged that the co-attorney would undertake certain tasks.

For any questions or comments: contact David Bowles, QLS Practice & Ethics Centre, on 3842 5937.

Footnotes
¹ Legal Services Commissioner v Towers [2006] LPT 003.
² Re Central Queensland Developments Pty Ltd [1988] 2 Qd R 476.
³ Consider the Public Trustee (Fees & Charges Notice) as an appropriate scale. Alternatively, at your paralegal or junior’s standard charge out rates as applicable from time to time might be appropriate depending on the work required.
⁴ Queensland Law Society, Power of attorney (solicitor attorney remuneration) (Guidance Statement No 10, 31 January 2018).