What is a Conflict Clause

A conflict clause is a specific permission written into a Power of Attorney document that allows an attorney (the person managing someone else’s affairs) to make decisions that might also benefit themselves—within reason. Without it, attorneys must avoid any personal benefit, including gifts, living rent-free in the person’s home, or using their money for personal expenses. It’s like operating under professional standards: decisions should always be in the best interest of the person, not the attorney.

Understanding Conflict Clauses in Powers of Attorney

When someone appoints a Power of Attorney (POA), they’re legally allowing another person (the attorney) to make decisions on their behalf—often financial or legal decisions. This role carries significant responsibilities, including a duty to always act in the best interests of the person you're representing.

So, What Is a Conflict Clause?

A conflict clause is a provision included in a Power of Attorney document that permits the attorney to act in situations that might otherwise be seen as a conflict of interest—like benefiting personally from their role.

Without a conflict clause, attorneys must avoid any situation where they might gain a personal benefit from the decisions they make. In practice, this means:

No personal gifts from the person’s money
Not living rent-free in the person’s property (e.g. a daughter staying in Mum’s home after she enters aged care)
Not paying your own expenses with their funds
Not nominating yourself as a beneficiary or drawing income from their assets

Even if you're the son, daughter, or long-time caregiver—you must manage things as a professional would. If it wouldn’t pass the "professional adviser test", it likely shouldn't happen under POA.

Why Conflict Clauses Matter in Aged Care Planning

In aged care, it's common for family members (often children) to act as attorneys. But without a conflict clause, their hands may be tied in situations where they live with or support the person entering aged care.

Example: A daughter who lives with her mother is appointed as attorney. When Mum moves into residential care, the daughter wants to keep living in the home and use some of Mum’s money for basic upkeep (utilities, maintenance). Without a conflict clause, doing so could be considered a breach of duty. With a conflict clause, those specific scenarios can be allowed, so long as they're clearly defined.

Key Takeaway

A conflict clause provides transparency and legal protection for both the attorney and the person they’re acting for. It ensures everyone understands what’s allowed—and helps prevent disputes or unintended breaches.

When creating a Power of Attorney document, it’s a good idea to speak with a solicitor to:

Review whether a conflict clause is needed
Define any specific permissions (e.g. continue living in the home, modest gifts)
Ensure decisions are aligned with the person’s wishes and legal obligations