What is a power of attorney?
We often get asked this common question. So, what is a power of attorney?
A power of attorney is a legal document appointing someone to act on your behalf in your property and financial matters.
The person who makes the power of attorney is the “principal”. The person appointed to act on your behalf is the “attorney”. Your attorney may be a family member, close friend, a solicitor or the NSW Trustee and Guardian.
It is important that you appoint someone you trust and who will act responsibly. They will have full authority to deal with your legal and financial affairs. Your attorney must act in your best interests.
It is possible to appoint more than one person as your attorney. You have the option to appoint multiple attorneys in two ways:
– Jointly – they can only make decisions together, or
– Severally – they can act as individuals
A lawyer can assist in determining what may be best in your situation.
A power of attorney document can authorise your attorney to do the following:
– withdraw money from your bank account
– pay your bills/debts
– give reasonable gifts
– manage your investments
– sell property and
– enter into agreements on your behalf.
A power of attorney can be for a limited period or an unlimited period:
General Power of Attorney
A limited/general power of attorney may be implemented when:
– you plan to travel overseas for an extended period of time or
– you are going to hospital and may be out of action for a while.
A general power of attorney will cease if you lose mental capacity.
Enduring Power of Attorney
An enduring power of attorney will remain valid if you were to lose mental capacity.
It allows your attorney to deal with your legal/financial needs if you can no longer do so yourself.
This document operates until you die or you revoke it or your attorney is no longer willing or able to act for you.
I have a will isn’t that the same thing?
No. Your will is a document which takes effect on your death. It ensures that your assets are distributed according to your wishes.
A power of attorney gives your attorney the power to manage your financial and legal affairs whilst you are alive. The document ceases on your death or when revoked by you.
We recommend you have both a power of attorney and a will in place.
Our free ebook is a great source to decide if these documents are right for you. In this ebook we delve deeper into the question “what is a power of attorney” along with enduring guardianship and wills.
How do I make a power of attorney?
A power of attorney document can be prepared by your lawyer and they will ensure:
– the document is witnessed by a prescribed person;
– it is drafted to include specific conditions and/or limits on the attorney’s power in accordance with your instructions (such as when it is to take effect);
– they will discuss and answer any queries you and/or your attorney may have.
What if I don’t have a power of attorney in place and I lose capacity?
Your family or a close friend will have to apply to the Guardianship Tribunal.
If they are appointed as your financial manager, they will have the Guardianship Board supervising their every move. This will include ongoing annual fees for supervising your estate, and added stress.
Call us to discuss making your power of attorney today.
Don’t forget to download your free ebook: