A Power of Attorney (POA) is an essential legal document all adults should put in place to safeguard their financial interests and their loved ones. A POA provides you with peace of mind, safe in the knowledge that you can mitigate any unforeseen challenges that life might throw at you.
Your POA is something you don’t think about until you actually need to utilise one, such as undertaking daily financial tasks you took for granted. Like paying your bills if you’re temporarily hospitalised or accessing your finances while you are on an overseas holiday.
It can be a time consuming and frustrating experience to enable other individuals to access your finances on your behalf if no POA is in place. Creating a POA is good forward life planning that we should all consider essential.
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This document allows you to appoint another person or persons to legally act on your behalf in matters of your finance and assets when you are unable to do so. In some instances you may want to appoint an organisation such as the NSW Trustee and Guardian to act on your behalf.
The individual or individuals you appoint as your attorney will have the power to deal with your finances and assets only while you are still alive. Your appointed attorney or attorneys can be directed by you to act together or separately and have part or full control of your finances depending on your requirements. The Power of Attorney will become null and void when you pass on.
Choosing your attorney is a crucial decision that should be made with the knowledge that the individual or organisation you choose will be capable of administering your assets and finances in a responsible and trustworthy manner. You can grant Power of Attorney to your spouse/partner, close friend/s or family member/s, a solicitor or the NSW Trustee and Guardian.
The latter two appointees will charge a fee to act as your appointed attorney. You have the power to choose the extent to which your appointed attorney has control over your finances and assets by stipulating your conditions in the Power of Attorney document. Your appointed attorney will not have any authority to act on your behalf on health or lifestyle matters, only your finances and assets.
There are two types of Powers of Attorney that you can choose, dependent on your circumstances. Both types of Powers of Attorney can be tailored to your specific needs, for example restricting what your appointed attorney can do or defining the time period your attorney can act on your behalf.
Enduring Power of Attorney
This is a permanent appointment of an attorney which remains in effect even if you are no longer able to make decisions for yourself if you suffer loss of capacity or illness.
General Power of Attorney
This is a limited appointment, generally for a specified period of time and will lapse at your chosen end date or if you lose mental capacity. A good example of this arrangement is if you travel overseas or are going into hospital and would like someone to make financial decisions when you are unable to.
Appointing an individual or organisation to act as your attorney is a crucial planning tool for you and your love ones. You may be capable of taking care of your finances and administering your assets now but fast forward to when unexpected circumstances such as illness or loss of capacity prevent you from doing so in the future. Your loved ones will not be able to access funds in your bank account, advocate on your behalf to government agencies or administer property or deal with real estate agencies on your behalf.
An Enduring Power of Attorney becomes crucial if you lose the capacity to take care of yourself in the future due to unforeseen circumstances.
If you own property, appointing an enduring power of attorney provide your attorney with the legal authority to make crucial decisions about your finances and assets when you are unable. For example you or your parent may need to sell their home and transition to residential aged care accommodation or at the very least have access to bank accounts to pay bills.
In NSW, you can appoint anyone over the age of 18 as your attorney as long as they have the mental capacity to understand what they are signing in the Power of Attorney document. It should be noted that you need to be deemed as mental competent to make the power of attorney.
If you are in a long-term relationship, your partner or spouse is usually the person appointed as your attorney. It’s not uncommon for trusted friends to be also considered when appointing an attorney.
In many circumstances adult children can be appointment by ageing parents to take care of their finances and assets