What is a power of attorney?

In essence, a power of attorney provides a way to ensure that your financial and legal affairs are managed according to your wishes, even if you are unable to make decisions yourself.

A power of attorney is a legal document that allows one person (the “principal”) to nominate another person (the “attorney”) to act on their behalf.

Having a power of attorney might be beneficial in these scenarios:

1. Incapacity: If you become incapacitated due to illness, injury, or age, a power of attorney ensures that someone you trust can make decisions on your behalf, such as managing your finances.

2. Financial Management: If you travel frequently, live abroad, or are unable to manage your financial affairs for any reason, a power of attorney allows someone to handle your finances, pay bills, manage investments, and handle other financial tasks.

3. Legal Matters: A power of attorney can enable someone to represent you in legal transactions, such as signing contracts or handling legal proceedings, especially if you cannot be present

Types of Powers of Attorney

There are two types:

1. General: A general power of attorney operates until you die, cancel the appointment or suffer loss of capacity. A loss of capacity would include medical illness such as dementia or if you were in a coma. Most people want their power of attorney to continue if they suffer loss of capacity, so it is rare for someone to request a general power of attorney.

• Enduring: This is the most common power of attorney. It operates even when you lose capacity to make decisions yourself due to medical illness.

Depending on the type of power of attorney, you can nominate that it starts:

• Immediately,
• For a set period of time,
• When your attorney considers you need assistance,
• When a medical practitioner certifies that you are unable to manage your own affairs, or
• In other circumstances which you discuss with your lawyer.

Who should you appoint as your attorney?

You should appoint a trusted person to be your attorney. This might be your husband, wife, son, daughter, mother, father or a trusted friend.

An attorney must:

• Keep their assets separate from your assets
• Maintain adequate accounting records when dealing with your assets
• Act within the terms set out in the power of attorney.

Are there things that an attorney cannot do on your behalf?

Your attorney cannot:

• Make a Will for you
• Vote for you
• Consent to marriage on your behalf
• Consent to medical treatment or make lifestyle decisions on your behalf (this is covered in an Enduring Guardian document)

What happens if you do not have a power of attorney?

Having a power of attorney in place can help ensure that your wishes are respected and that someone you trust is empowered to manage your affairs if you become unable to do so yourself. It’s an important part of planning for potential future scenarios and can provide peace of mind for both you and your loved ones.

If you do not have an attorney appointed to manage your affairs and you are unable to make these decisions yourself, it will be necessary for someone to apply to the NSW Civil and Administrative Tribunal for a Financial Management Order. This means all or part of your financial affairs will be subject to management under the NSW Trustee and Guardian Act. The Tribunal will decide who to appoint to manage your affairs under the Order.

How can we help?

We offer fixed price quotes for preparing a power of attorney. Contact our office to discuss your needs with a lawyer and obtain a free quote.