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Explore what it means to appoint a representative to handle your affairs, and what it means to make decisions on behalf of someone else
A Power of Attorney is a legal document that allows you to appoint a person (or people) known as your attorney to make financial decisions on your behalf.
A Power of Attorney sets out who can act for you, what decisions they can make, and when their authority applies.
You may wish to seek legal advice when creating a Power of Attorney or before you allow someone to manage your banking.
An Administrative Tribunal in your state or territory can also appoint someone to look after your financial affairs by making a Financial Management Order (FMO) (also known as an Administration Order). The person acting on your behalf is a financial manager.
The ability to make a decision is called decision-making capacity. All adults are presumed to have decision-making capacity. Capacity should only be questioned if there is good reason to do so.
Generally, you have decision-making capacity if you can:
Understand the nature and consequences of a decision after it is explained to you, and
Communicate this in some way.
You may have decision-making capacity for some types of decisions but not others, depending on how complex the decision is.
Your decision-making ability may also fluctuate. For example, illness, stress, grief, or medication may temporarily affect your ability to make decisions.
We may ask you to provide a medical certificate from your doctor to confirm your capacity.
There are two types of Power of Attorney:
Allows your attorney to manage your financial affairs only while you have capacity.
It can be used for a specific period or during a particular event such as travelling overseas.
Allows you to appoint someone to make financial decisions for you if or when you lose capacity and are no longer able to make financial decisions.
An Authority to Operate (ATO) is a special type of authority a bank can offer you in relation to your bank accounts.
An ATO gives another person access to one or more of your bank accounts without going through a full Power of Attorney process. It is arranged directly through your bank and allows the nominated person to perform transactions on specific accounts only.
The authorised party will not be able to do things that are not within their authority, such as opening new accounts or credit card accounts.
Unlike a Power of Attorney, an ATO does not confer any legal power on the person to act on your behalf outside of accessing specific bank accounts.
An ATO can only remain in effect whilst you still have capacity and can make financial decisions.
There are several reasons why you may benefit from having a Power of Attorney. These include if you:
Are experiencing (or planning for) a decline in your mental health.
Are injured, immobile or experiencing physical ailments that make it difficult to get around.
Are in hospital, travelling or deployed in a foreign country.
Live remotely and find it difficult to access services.
Have difficulty managing your money yourself.
A general Power of Attorney can be useful when you have a specific period where you need someone to act on your behalf, for example due to absence or injury.
An enduring Power of Attorney can be useful to ensure decisions can be made in line with your wishes if you are no longer able to decide for yourself.
If you do not have an Enduring Power of Attorney and you need someone with legal authority to make a financial decision because you do not have the capacity to make a financial decision, the relevant body in your state or territory may appoint someone to make the decision for you.
If an independent decision-maker is appointed, they will do their best to make financial decisions that reflect your wishes. However, they may not know your wishes as well as someone who is involved in your daily life.
An independent decision-maker may also charge you a fee.
An attorney has significant responsibilities to act in the best interests of the principal, which includes:
Keeping accurate records, receipts and invoices of interactions and transactions.
Avoiding conflicts of interest between the attorney and the principal.
Keeping their money separated from the principal's money.
Acting honestly, with care and diligence.
Following the limits set out in the Power of Attorney.
Helping the protected person participate in the decision-making process as much as possible.
Acting in a way that does not limit the principal's ability to participate in making decisions.
Keeping the principal and other attorneys (if there are any) informed about decisions or transactions they make.
Not benefitting or profiting from being an attorney.
Consulting a lawyer before making decisions about joint accounts or property.
Only doing things that they have clearly been appointed to do. Even if the principal would have wanted to act in a particular way, they cannot do so unless the Power of Attorney allows them to do it.
An attorney can face criminal or civil penalties if they fail to adhere to the obligations required under law.
An attorney should seek their own legal advice to ensure they fully understand their role and responsibilities.
As the person making the Power of Attorney, you should:
Choose your attorney carefully.
Clearly communicate your wishes and expectations with the attorneys and your support network.
Review your arrangements regularly.
Notify relevant organisations (such as your bank) of any changes.
Seek advice if you are unsure about your rights or options.
There is no national register for Powers of Attorney. This limits the ability for your bank to see the arrangements you have in place.
Setting up a new Power of Attorney does not automatically cancel an old one.
A Power of Attorney can give a person access to your bank accounts and finances. There is a risk the attorney might use your money for their own purposes.
The following are some warning signs that an attorney may be misusing their authority:
Unexplained withdrawals, large transactions or unusual transactions.
Pressure to sign documents or make large transfers.
Missing statements or changes to contact details.
Feeling uncomfortable or excluded from financial decisions.
Please see our financial abuse webpage for more information.
Some steps you can take to help protect yourself when making a Power of Attorney include:
Think carefully about who you appoint as your attorney. Make sure they understand your wishes and will always act in your best interests. You do not have to give Power of Attorney to family members.
Start thinking about your Power of Attorney when you are in good health and have time to prepare.
Limit powers where appropriate.
Consider appointing more than one attorney.
Keep banks and advisers informed.
Review arrangements regularly.
Seek independent legal advice when setting up your Power of Attorney.
Remember that if you have capacity, you can advise IMB if you have any concerns about your Power of Attorney arrangement, or speak to a solicitor about revoking your Power of Attorney.
If you ever change your Power of Attorney, make sure you inform anyone who has a copy in writing. Please let your bank know about the change straight away.
If you have any concerns about someone abusing your Power of Attorney or finances, let your bank know. Your local bank manager can speak with you privately if you would like.
IMB is committed to protecting our customers' accounts, which may involve requesting additional documentation and information to ensure transactions involving a Power of Attorney are for the benefit of the account owner.
You can set up your Power of Attorney at your nearest IMB branch.
You will need to bring:
The original Power of Attorney document, or a copy certified by a person authorised to do so in your state or territory.
Proof of identity.
Any documents required in the Power of Attorney (for example, sometimes a medical certificate is required where someone has lost decision-making capacity).
IMB will then review the Power of Attorney and provide a response.
This response can take around one (1) business day.
IMB may request further documents if required under the Power of Attorney.
Your solicitor
Australian Guardianship and Administrative Council (AGAC) represents state and territory government agencies.
These agencies have a role in protecting adults in Australia who have a decision-making disability that impairs their capacity to make personal or financial decisions. Agencies include Public Guardians, Public Trustees, Public Advocates and Guardianship Tribunals.
This information has been prepared by IMB Bank for general information and reference and it is not intended to be advice. It does not take into account your objectives, financial situation or needs. You should seek your own legal, accounting, financial or other professional advice when appropriate, and consider the relevant Terms and Conditions or Product Disclosure Statement before deciding whether to acquire any products or services offered by IMB Bank. We do not recommend any third party products or services referred to in this article and we are not liable in relation to them. Any links to third party websites are for your information and we do not endorse any content on those sites. IMB Ltd trading as IMB Bank. ABN 92 087 651 974 AFSL/Australian Credit Licence 237
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