Why getting your Power of Attorney right matters.

The importance of properly drafted POAs

When it comes to estate planning, few documents are as powerful (and potentially problematic) as a Power of Attorney (POA). The recent case of Saunders v Maestri [2025] NSWSC 244, heard in the Supreme Court of New South Wales, highlights how unclear drafting of a POA can lead to costly disputes, family tension, and unnecessary litigation.

What Happened?

In this case, Mr Raymond Maestri (the Deceased) passed away in January 2023, leaving an estate valued at approximately $1.3 million. He had appointed his second wife, Beverley, as his attorney under a POA created in November 2013. As his health declined, Beverley used the POA to pay a $480,000 Refundable Accommodation Deposit (RAD) to secure his place in aged care.

After his death, a dispute arose between Beverley and the Deceased’s five children—four from his first marriage and one from his second—over whether Beverley was entitled to 50% of the RAD under the Will. The issue hinged on whether the POA was valid and enduring, and whether section 22 of the Powers of Attorney Act 2003 applied to preserve Beverley’s entitlement.

Types of POAs

Under the Powers of Attorney Act 2003 (NSW) and Powers of Attorney Regulation 2024 (NSW), a POA can be either:

• General POA: Operates only while the principal has decision-making capacity.

• Enduring POA: Continues to operate even after the principal loses capacity, provided it is properly executed and contains the required declarations.

The key difference is whether the POA remains effective after the principal becomes legally incapacitated.

Unclear Drafting

The POA in this case was a source of significant confusion:

• It was titled “Enduring Power of Attorney”;

• It included a detailed explanatory statement about enduring POAs;

• It was witnessed by a solicitor, as required under the Act;

• However, it crossed out the critical declaration: “I give this power of attorney with the intention it will continue to be effective if I lack the capacity through loss of mental capacity”;

• It also struck out other powers, including gifting provisions and general authority clauses.

This contradictory drafting led to uncertainty about whether the POA was valid and enduring. The Deceased’s children from his first marriage argued that Beverley’s use of the POA was invalid and that the RAD should fall into the residue of the estate, to be shared equally among the children. Beverley, supported by her daughter Linda (the executor), argued that section 22 of the Act preserved her entitlement.

Key Takeaway

This case underscores the importance of:

• Clear and consistent drafting of POAs and Wills.

• Avoiding contradictions in legal documents, especially where powers are modified or removed.

• Seeking legal advice when preparing estate planning documents to ensure they reflect your intentions and comply with the law.

A valid Will and properly executed POA can prevent disputes, protect your loved ones, and ensure your wishes are carried out. Poor drafting, on the other hand, can lead to confusion, conflict, and costly litigation.

Should you require any Power of Attorney assistance, please don’t hesitate to contact us by telephone on (02) 9525 4900 or by email info@mtklawyers.com.au