A Power of Attorney is a legal document that appoints a trusted person your attorney. Your attorney has the legal authority to do what you can do, and make legally binding decisions on your behalf. You can place directions or limitations on you the authority of your Attorney. Below are 6 common questions dealing with Powers of Attorney:
What are the benefits of having a Power of Attorney?
- to relieve yourself of the day to day demands of financial paperwork and record keeping;
- as a safety net when travelling or to allow someone to handle your affairs in your absence;
- you nominate who you want to act for you; or
- if you are unable to manage your prosperity or financial affairs.
Does the Attorney need to be a lawyer?
You can appoint anyone your attorney, although some States do not allow carers or social workers to be attorneys. You should carefully consider who you appointment to be your attorney as they will be able to do what you can’t do.
An ideal attorney should:
- have integrity;
- be willing to act in that capacity;
- have competence in areas of relevance;
- be able to act in a business-like manner;
- be able to spare the time necessary for the task;
- live in the locality in which they are to act;
- be agreeable to respecting the confidentiality of the donor’s affairs; and
- be impartial and have no known conflict of interest.
Are there different types of Powers of Attorney?
Yes, there is a General Power of Attorney and an Enduring Power of Attorney. A General Power of Attorney is:
- only valid while you have legal capacity;
- useful if you are going away for an extended period and you do not want the authority to continue should you lose legal capacity; and
- usually drawn up for a specific purpose with specific or general powers.
An Enduring Power of Attorney (EPA):
- continues to be valid even if you lose legal capacity due to disability or illness;
- may empower your attorney to make financial, property, lifestyle and health decisions; and
- may be activated when required or upon loss of legal capacity.
Note that in NSW there are two documents:
- Powers of Attorney
- Deals with you financial and property matters. You can chose when it commences.
- Enduring Guardianship
- Deal with your personal and medical matter. It only commence when you are unable to make those decisions for yourself
Is it better to have more than one attorney?
We recommend that you appoint more than one Attorney as it gives them more flexibility.
If you appoint more than one you should decide if they are to act together, together and separately or separately. You can appoint a spouse and a child as an alternative in the event the spouse dies. You can also appoint attorneys to act “jointly” or “severally”.
Should I pay my attorney?
This is not necessary to give legal affect to the power. If you appoint a professional as your attorney they would normally charge their usual fees for their time.
How do I know if a person has sufficient mental capacity to make a power of attorney?
There is no simple formula, but in general terms they must be able to:
- understand the significance of appointing someone their Attorney
- understand the significant of a Power of Attorney document
- freely and voluntarily sign the Power of Attorney document
If there are any doubt about a person’s capacity, a doctor’s written opinion can be obtained. It is important to remember that different powers require different levels of understanding. If there are doubts it is best to have the Power of Attorney signed on the same day as you get the doctor’s written opinion so there can be no dispute as to capacity in the future.
The need for a Power of Attorney can be numerous. In case of accident, sudden illness, planned or unexpected absence, or when you just can not cope, you may need someone to manage your financial affairs. It is irrelevant if you are old or young, in business or not, if you do a lot of travelling or not, there are benefits in having a Power of Attorney.
Chamberlains currently has a limited 15% discount offer on all Wills & Estate Packages. Call the Wills & Estates Team today to find out more.