Understanding Power of Attorney

Power of Attorney (POA) is the legal authority an account owner (the Principal) grants to a third party to look after their financial affairs.  

Through a solicitor, you can set up one of two types of Power of Attorney:

• General Power of Attorney (GPOA)
• Enduring Power of Attorney (EPOA)

An Attorney can be anyone the Principal trusts to make decisions on their behalf. This person doesn’t have to be a lawyer and is commonly a friend or family member.

Any person of at least 18 years of age can appoint someone to make decisions and take actions for them, so long as at the time of appointment they have mental capacity and are of sound mind.

Generally, a Power of Attorney (POA) is given the same powers as the Principal. This means, subject to the terms of the POA, the Attorney may have the power to:

• open and close accounts
• update details
• perform and stop financial transactions or payments
• make changes to banking products and services.

An Attorney to a client account will usually have full control of the account and will be seen as a signatory for Anti-Money Laundering Know Your Customer (KYC) purposes and require full KYC on them as if they were the customer.  

An Attorney generally cannot delegate their responsibilities to another person unless expressly provided for in the POA document. For example, an Attorney generally cannot appoint another person to act as an Attorney under the same POA, but it is possible for an Attorney under a POA to appoint an adviser with enquiry or transactional authority to an account without delegation of their Attorney responsibilities.

The Power of Attorney (POA) document, also known as the ‘instrument’, outlines the details relevant to the Attorney and the powers given to them by the Principal. Generally, the POA document must be less than 2 years old. If greater than 2 years old, we may require a confirmation of the non-revocation of the POA.  

To find out what powers the Attorney has been given, always refer to the instrument. It will include:

• the represented person’s (Principal’s) details
• the Attorney’s details
• whether the Principal wants the Attorney(s) to act solely, jointly or jointly and severally
• an alternative Attorney’s details in case the nominated Attorney/s die, lose capacity or become unavailable
• the appointment duration
• the extent of authority – sometimes referred to as ‘conditions or restrictions’ (e.g. the Principal may specify that the Attorney can make only some or all financial decisions)
• the Principal’s authorisation – a declaration by the Principal that they are providing power to the Attorney/s
• a declaration of when the POA is to start
• the Principal’s signature and an authorised witness’ signature
• for an Enduring Power of Attorney, a declaration from the Attorney/s that they accept the power subject to the relevant laws.

When a client becomes incapacitated, we’ll need to be informed as soon as possible. Restrictions may be placed on the incapacitated client’s access. If the client has a General Power of Attorney (GPOA) in place, that Attorney’s authority will be revoked. However, if the client has an Enduring Power of Attorney (EPOA) in place, the Attorney can continue to manage the client’s financial and legal affairs as per the instrument.

It’s not the role of Macquarie to determine the capacity of the Principal. If a Principal does lose capacity, we’ll require sufficient evidence, such as a certified copy of a medical report to be provided.

The main difference between an Individual Power of Attorney and a Corporate Power of Attorney lies in the grantor (i.e. whether the grantor is an individual or a company). In either case, an Attorney appointed under a POA may be an individual or a company.

When the grantor is a company, the company is described as the entity appointing the Attorney and the following requirements apply:

• The person/s signing the POA for the company must sign in their capacity as directors, or as a director and secretary, or otherwise in accordance with the company's constitution, and not in their personal capacity.
• If the directors are signing without the use of a common seal, they must specify that they are signing as directors.
• If a director does not specify that they are signing as a director of the company, then the company has not executed the POA.

Both types of POA are essential tools for delegating authority, tailored to meet the specific needs of individuals and corporate entities, respectively.

For a Self-Managed Super Fund (SMSF) with a corporate trustee, either an Individual or Corporate POA is generally accepted. However, for all other account types, consider the entity it applies to in order to determine whether an Individual Power of Attorney or a Corporate Power of Attorney document will be required.

The online application is the fastest way to open accounts for your clients. Both CMA and Investment Wrap account online application forms have the option to tick a box stating you’re opening under Power of Attorney (POA). The POA will need to accept the terms and conditions on behalf of the client. When opening an account under POA, we’ll generally require:

• a certified copy of the POA documentation
• a certified copy of government-issued ID displaying the POA’s name, date of birth, residential address and signature.