Enduring Powers of Attorney - Jointly vs. jointly and severally

In South Australia, Enduring Powers of Attorney are governed by the Powers of Attorney and Agency Act 1984 (SA). An Enduring Power of Attorney can be created under section 6 of that Act.

When making an Enduring Power of Attorney, the person giving the power (also known as the Donor) can appoint one or multiple persons (known as the Donees) to act as their Attorneys which enables them to manage the legal and financial affairs for the Donor even in the event the Donor becomes legally incapacitated.

If a Donor appoints more than one person to act as their Attorney, then they need to decide if the appointed Attorneys must act jointly or if they can act jointly and severally, meaning that any of the Attorneys can lawfully act using the Enduring Power of Attorney without needing the consent or joint signature of the other Attorney(s).

While joint Enduring Powers of Attorney have their benefits, an issue which may arise is that in the event one of the Attorneys dies or becomes otherwise incapacitated, then the other Attorneys can no longer validly act under that joint Enduring Power of Attorney.

Appointing your Attorneys to act jointly and severally under your Enduring Power of Attorney can reduce the risk that the Enduring Power of Attorney might become invalid as a result of the death or incapacity of one or more of the joint Attorneys. An Attorney appointed jointly and severally can continue to exercise the powers under the Enduring Power of Attorney even if one of the Attorneys can no longer act.

This issue is exacerbated if the Donor has already lost capacity and cannot legally make a new Enduring Power of Attorney.

Section 46(1) of the Powers of Attorney Act 2003 (NSW), states that:

“If a power of attorney appoints 2 or more persons as joint attorneys, the power of attorney is terminated if the office of one or more of the attorneys becomes vacant.”

However, in New South Wales, the Power of Attorney will not be terminated if the Power of Attorney explicitly provides otherwise and at least one of the Attorneys or a substitute Attorney remains in office.

The NSW Act also allows for the NSW Civil and Administrative Tribunal (NCAT), pursuant to section 36(9), to reinstate a Power of Attorney that may have lapsed by reason of a vacancy in the office of an Attorney.

Unlike the NSW Act, the South Australian Act does not make provision for what happens in the event the office of one or more of the attorneys under a joint Power of Attorney becomes vacant.

Nevertheless, clients should be advised of the potential risks of joint appointments when they are deciding to appoint their Attorneys jointly or jointly and severally.

Our lawyers will be able to tailor an Enduring Power of Attorney to meet the individual needs of our clients.