Attorney Duties and Conflict of Interest Under ACT Power of Attorney
You've been appointed as an attorney under your parent's enduring power of attorney in the ACT. You're managing their bank accounts, paying their aged-care fees, and keeping their household running. Then you use their funds to cover a shared utility bill, or you lend yourself money from their account with the intention of paying it back. Under Section 34 of the Powers of Attorney Act 2006, you may have just breached your fiduciary duty — even if every dollar was going to be repaid.
What Section 34 Actually Prohibits
Section 34 states that an EPA does not authorise the attorney to execute any transaction where the attorney has a personal interest that conflicts with their duty to the principal, unless the EPA contains an express authorisation clause permitting that specific type of transaction.
In plain terms: you cannot benefit yourself from the principal's assets, and you cannot enter into any transaction where your interests and the principal's interests diverge. This includes:
- Loans to yourself from the principal's funds, regardless of whether you intend to repay them
- Purchasing the principal's property (their home, car, investments), even at fair market value
- Paying yourself for the time you spend as attorney, unless the EPA specifically authorises compensation
- Joint expenses — using the principal's money to pay for something that also benefits you (a shared holiday, a joint electricity bill for a home you both occupy)
- Gifts to yourself or your family from the principal's assets
The prohibition is strict. A transaction that benefits the attorney is void ab initio — legally, it never happened. ACAT can order the attorney to repay every dollar, plus compensation for any loss to the principal's estate.
Gifting: Where Most Families Go Wrong
The most common breach isn't dramatic financial abuse — it's well-intentioned Christmas gifts, birthday presents to grandchildren, or charitable donations made from the principal's accounts. Unless the EPA includes a specific gifting clause, the attorney has no authority to make gifts of any kind from the principal's assets.
A properly drafted gifting clause might authorise:
- Gifts of reasonable value on customary occasions (birthdays, Christmas) to family members the principal has a history of giving to
- Charitable donations consistent with the principal's established pattern of giving
- A dollar cap per gift and per year
Without such a clause, an attorney who gives $500 from the principal's account to a grandchild for their birthday has technically breached the EPA. Most families do this without thinking twice, and most of the time nobody challenges it. But if a sibling dispute arises later, or if ACAT reviews the attorney's conduct, every unauthorised gift becomes evidence of breach.
Record-Keeping Obligations
The Powers of Attorney Act 2006 requires attorneys to keep the principal's money and property strictly separate from their own assets. In practice, this means:
- Separate bank accounts. Never deposit the principal's funds into your own account, even temporarily. If the principal's pension arrives and you need to pay their bills, the money should flow through the principal's account or a dedicated attorney-managed account in their name.
- Detailed transaction records. Keep receipts, bank statements, and records of every transaction you make on the principal's behalf. Document the purpose of each payment.
- Asset registers. Maintain a list of the principal's assets (property, investments, vehicles, valuables) and update it as assets are sold, transferred, or acquired.
- Consult other attorneys. If there are co-attorneys, keep them informed of all financial decisions. If you're the sole attorney, consult regularly with the principal's carers and family members.
These records aren't just good practice — they're your protection if your conduct is ever questioned. ACAT can require you to provide a full accounting of your management, and incomplete records make it harder to show that you acted properly.
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What Happens When Duties Are Breached
ACAT has broad jurisdiction to review attorneys who breach their obligations and make orders about their conduct. Any interested party — a family member, a carer, the PTG, a health professional — can apply to ACAT for a review of the attorney's conduct.
If ACAT finds a breach, it can:
- Order compensation — the attorney must repay any amounts improperly taken or used
- Remove the attorney from the EPA and appoint a replacement
- Appoint the PTG as replacement manager, at the principal's expense
The PTG's fees start at $340 per hour for standard matters and include capital commissions on assets under management. Being removed as attorney and replaced by the PTG is an expensive outcome for the principal — and a deeply personal one for the family.
Protecting Yourself as Attorney
The best protection is a well-drafted EPA that anticipates the practical realities of family financial management. The EPA should include:
- A gifting clause with reasonable limits
- Authorisation for the attorney to be reimbursed for out-of-pocket expenses incurred in performing their duties
- Clear instructions about whether the attorney may be compensated for their time
- Any specific transactions the principal knows will arise (selling the family home, managing a rental property the attorney also uses)
If you're already acting under an EPA that doesn't include these clauses, and the principal still has capacity, they can execute a new EPA with additional authorisations. If they've lost capacity, you'll need to apply to ACAT for specific authority to carry out any transaction that involves a conflict of interest.
Our Australian Capital Territory Power of Attorney Kit includes a duties reference guide and sample gifting clauses designed to prevent accidental self-dealing breaches.
Get the ACT Power of Attorney Kit to understand your obligations before you start managing someone else's finances.
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