Sharing Family Finances with an Enduring Power of Attorney in place?

Sharing financial assistance within family networks such as interest free loans, lump sum gifts and even contributing to the cost of the construction of a granny flat for personal occupancy occur all the time. Usually, these arrangements go on between Parents and their adult children but can also be between adult siblings and/or spouses. Commonly, the transacting parties to these “family friendly” arrangements have also agreed to act as Enduring Powers of Attorney (EPOA) for one or another and have gone on to sign up the appropriate EPOA forms which have been lodged with the relevant institutions. In any of these scenarios it is important to note that under Section 87 of the Queensland Powers of Attorney Act, any transaction (financial or otherwise) from the person who has given an EPOA (the Principle) in favour of the person appointed (the Attorney) can be challenged (by other persons), rendered completely void and reversed unless the parties involved can produce proof that the transaction was entered into without any pressure, in any form, being put upon the advancing person to pay over the money or provide the financial benefit to the receiving person.  In a Supreme Court decision that was previously determined on this issue, it was found that a way to produce this proof was for the advancing person(s) to obtain independent legal advice about the nature and the effect of the intended transaction before it was completed.  In circumstances where the entire family enjoys supreme harmony between all of its members, taking matters to the extremes of independent legal advice is probably unnecessary. But in any situation where family quarrels might occur, the extra precaution of securing proof of independent legal advice having been provided simultaneously with the transaction would be very prudent.

Michael Zande is a Queensland Law Society Accredited Family Law Specialist with over 30 years’ experience in the field. He is the principal at Zande Law Solicitors, Suite 7, Norwinn Centre, 15 Discovery Drive, North Lakes.  To contact Michael for advice, phone 3385 0999.

The information in this article is merely a guide and is not a full explanation of the law.  This firm cannot take responsibility for any action readers take based on this information.  When making decisions that could affect your legal rights, please contact us for professional advice.