You've been made someone's attorney: what that actually means, and the duties most people never realise they have

At some point many of us are asked to be a parent's or partner's attorney — to step in and manage their finances if they can no longer do it themselves. Most people accept out of love and say yes without a second thought, then start "handling Mum's money" with the vague sense that they've been given permission to do whatever seems sensible. Here's the part almost nobody is told: being someone's enduring attorney is not a casual favour or a blank cheque. It's a fiduciary position — a role of legal trust — with strict, enforceable duties: to act only in the principal's interests, to keep their money completely separate from yours, to keep careful records of everything, and not to benefit yourself. Get it wrong — even with the best intentions, even when you're the one who'll eventually inherit — and you can be removed by a tribunal, ordered to repay losses out of your own pocket, and in serious cases face criminal consequences, because misusing a power of attorney is one of the most common forms of elder financial abuse (MoneySmart). This article — the companion to our piece on making a power of attorney — is for the person on the other side of the document: what the role really involves, and how to do it well. It is general information only, not legal advice, and powers-of-attorney law is state-based, so confirm the detail for your state.

What is the role actually?

An attorney under an enduring power of attorney is appointed by a person — the principal (or donor) — to make their financial and legal decisions: operating bank accounts, paying bills, managing investments, dealing with property. As Australia's government money-guidance service puts it, an enduring power of attorney "lets someone make financial and legal decisions for you" and "continues to operate if you lose the ability to make decisions" (MoneySmart). That enduring quality — the appointment keeps working even after the principal loses capacity — is the main reason these documents exist; an ordinary general power of attorney, by contrast, ends the moment the principal loses the ability to make decisions (MoneySmart). Crucially, a financial power of attorney covers money and property only — it does not let you make lifestyle or health decisions like moving someone into care or consenting to treatment; those belong to an enduring guardian, sometimes called a medical power of attorney (MoneySmart), and we cover that role in a separate article on enduring guardianship. The whole role rests on one idea: you are acting for the principal's benefit, not your own.

When does your authority start — and when does it stop?

When your authority starts depends on the document. A financial power of attorney can often be used while the principal still has capacity (with their say-so) — to help with banking, for instance — or it can be written to operate only once they've lost capacity. Read the document to know which applies to you. When it ends is just as important: your authority ceases if the principal revokes it (while they can), if you resign or can't continue, if a tribunal steps in, and — the one people miss — when the principal dies. At death, the power of attorney stops immediately, and authority passes to the executor of the estate. An attorney who keeps operating the accounts after death is acting without authority.

What are the core duties — the part to read twice?

As an attorney you must, broadly: act in the principal's best interests, so that every decision is for them, not you; act honestly and with reasonable care, to the standard expected of someone managing another person's affairs; keep their money and property completely separate from yours, with no mixing of funds, ever; keep accurate records and accounts of every transaction — receipts, a log, statements — which is a legal requirement and the duty attorneys most often neglect; avoid conflicts of interest, so you don't put yourself where your interests compete with theirs; not gift or give benefits to yourself or others beyond what the document or the law specifically allows, since gifting is restricted, usually to modest, customary gifts the principal would have made anyway; stay within the authority the document grants; and respect the principal's wishes and support their own decision-making while they still can. Hold those and you're most of the way to doing the job properly.

What can an attorney not do?

You cannot make decisions about the principal's lifestyle or health — that's the guardian's role. You cannot make or change their will. You cannot act after they die. And — the big one — you cannot benefit yourself: no using their money for your own purposes, no "borrowing" it, no lending it to yourself, no paying yourself beyond any reimbursement or remuneration the document actually authorises, no helping yourself to the house or car. You also can't exceed the powers in the document or make decisions the law reserves for a court or tribunal.

What is the line good people cross without meaning to?

Most attorney misconduct isn't villainy — it's a well-meaning person rationalising their way across the line, one reasonable-sounding step at a time, which is exactly why the misuse of a power of attorney is recognised as a leading form of elder financial abuse (MoneySmart). The classic rationalisations: "I'll just borrow it and pay it back" — using the principal's money for yourself is a breach, full stop. "I'm the beneficiary anyway" — no: while the principal is alive, the money is 100% theirs, for their benefit, and a future inheritance gives you zero present claim; acting as if it's already yours is a breach. "I'm doing so much, I deserve to pay myself" — you generally can't. "I'll move into their place or use their car" — conferring benefits on yourself without authority is a breach. "I'll gift some to the family, it's what they'd have wanted" — beyond the limited customary gifts allowed, that's a breach too. The hard truth is that "but I'm family and I meant well" does not cure a breach — tribunals can remove you, order you to repay the money personally, and refer serious cases for criminal prosecution.

Can you be personally liable?

If you breach your duties — mismanage the money, mix funds, fail to keep records, benefit yourself, or act outside your authority — you can be ordered to compensate the principal or their estate for the loss out of your own pocket. The role carries genuine exposure, which is exactly why doing it properly matters — not just for them, but for you.

How do you do it well — and protect yourself?

Read the document carefully so you know your powers, any limits, when it starts, and whether there are co-attorneys. Keep meticulous records from day one — a dedicated file, a transaction log, receipts, copies of statements; if you can always show where every dollar went and why, you're both compliant and protected. Keep the accounts strictly separate, so their money stays in their accounts. Test every decision against "is this for them?" Involve the principal while they can take part, and respect their wishes. Be transparent with the rest of the family, because keeping siblings informed reduces suspicion and protects you against later accusations. Get professional advice for big decisions like selling the home or major investments. Don't gift or lend without checking your authority. Know when it ends — stop at death and hand over to the executor. And when you're unsure, ask: a lawyer, or the tribunal, can give you directions. One practical note: it's reasonable to reimburse yourself for genuine out-of-pocket costs with receipts — that's different from paying yourself or self-dealing.

What do worked examples look like?

These show the wrong path and the right one. They are illustrative only — not legal advice, and powers-of-attorney law varies by state.

Karen is attorney for her widowed father, who now has dementia. She's his only child and the sole beneficiary of his will. Managing his money is a lot of work, so she's started paying herself "a bit for my time," she's used some of his savings to cover her own car repairs ("I'll pay it back"), and she's stopped keeping receipts because "it's just me and Dad, who's checking?" On these facts, Karen — who genuinely loves her father and doesn't think of herself as doing anything wrong — has crossed the line on three duties at once. Paying herself "for her time" without authority is a breach. Using his savings for her car is using his money for her own benefit — a breach, and the "I'll pay it back" doesn't fix it. And abandoning her records breaches the legal duty to keep accurate accounts, and strips away the one thing that could protect her. The "I'm the sole beneficiary anyway" feeling underneath it all is the core fallacy: while her father is alive, the money is his, for his benefit — her future inheritance gives her no present entitlement to a cent of it. If this ever comes before a tribunal — perhaps raised by another relative, or by a new financial counsellor — Karen could be removed and ordered to repay everything she took, personally, with no record to defend herself. None of it required bad intent; it required only the absence of someone telling her the rules. On these facts the rational course is to stop, get legal advice, reconstruct her records as best she can, repay what she's taken, and run it properly from here.

Trevor is attorney for his mother, who's moving into residential aged care as her health declines. He wants to do it right. On these facts, Trevor models the role. He reads the document and confirms his powers and that they're now operative. He sets up a dedicated file and transaction log and keeps his mother's money in her own accounts, entirely separate from his. For the big decisions — whether to sell her home to fund the accommodation deposit, and how — he gets professional financial and legal advice, tests each option against her best interests (not the size of his eventual inheritance), and coordinates with the enduring guardian (his sister), since the lifestyle decision to enter care is the guardian's while the funding is his as attorney. He keeps his siblings informed throughout, which heads off any suspicion and means everyone understands what's being done and why. He reimburses himself only for genuine out-of-pocket costs, with receipts, and nothing more. And he notes that when his mother eventually dies, his authority will end and his sister-the-executor will take over the estate. On these facts Trevor's approach isn't just compliant — it's self-protective: if anyone ever questioned a decision, he could show exactly what he did and why. That's the whole game.

The thread is simple, and worth holding onto if you ever take on this role: it's their money, for their benefit, and you have to be able to prove it. Acting as someone's attorney is an act of love and a serious legal responsibility at the same time — read the document, keep separate accounts and careful records from day one, act only in the principal's interests, never benefit yourself beyond what's authorised, be transparent with family, get advice for the big calls, and stop at death. Do that and you'll not only meet your duties but protect yourself from the accusations that so often swirl around an ageing parent's finances. Because powers-of-attorney law is state-based and the detail matters, get advice from a legal practitioner in your state when you take on the role or face a significant decision — and remember the tribunal is there to give directions if you're ever unsure. Being trusted with someone's financial life is a privilege; treating it with the care the law requires is how you honour it.

Sources

• MoneySmart — Wills and powers of attorney
• MoneySmart — Enduring power of attorney (glossary)
• MoneySmart — Financial abuse