A Power of Attorney is a legal document that gives a trusted person (your attorney) the legal authority to act for you and to make certain legally binding decisions on your behalf. If you do not have a Power of Attorney, then you may want to contact us to find out more.
Below are 6 top questions dealing with Powers of Attorney.
1. Why Would I Make 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;
- to avoid burdening family or friends with the responsibility of looking after your affairs; or
- if you are unable to manage your prosperity or financial affairs.
2. Does the Attorney Need to be a Lawyer?
The person you appoint as your attorney does not need to have legal qualifications – you can appoint anyone, although your decision should be made after careful thought, as you are providing them with considerable power.
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 your affairs; and
- be impartial and have no known conflict of interest.
3. Are There Different Types of Powers of Attorney?
Yes, a General Power of Attorney, which 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.
And an Enduring Power of Attorney (EPA) which:
- continues to be valid even if you lose legal capacity due to disability or illness;
- may be activated when required or upon loss of legal capacity; and
- allows your attorney to commence or to continue to manage your affairs even though you have become unable to give lawful instructions.
Note: different laws apply across Australian jurisdictions regarding the types and format for Powers of Attorney, so it is important to seek legal advice relevant to your circumstances and where you live.
4. Should I Have More Than One Attorney?
You may want to appoint more than one attorney, or a substitute attorney if the appointed attorney cannot act or continue to act, as it gives you more flexibility.
For example, you may wish to appoint siblings who should act together if you are unsure if one should act on their own. Alternatively, you can appoint a spouse and a child as an alternative in the event that your spouse dies. You can also appoint attorneys to act “jointly” or “severally”.
5. Should I Pay My Attorney?
This is not necessary to give legal effect to the power, and for a financial power would normally only be considered if the attorney(s) is a professional.
6. How Do I Know if a Person has Sufficient Mental Capacity to Make a Power of Attorney?
There is no simple formula, but generally, they must be able to:
- understand the major consequences of a decision;
- take responsibility for making that choice; and
- make a choice based on the risks and benefits that are important to them.
If there is any doubt about capacity, it’s best to get in touch with a doctor and ask for a written opinion. If involving a doctor, it is wise to have the Power of Attorney signed on the same day as you get the medical report, so there can be no subsequent claim that the appointment was invalid.
Conclusion
For convenience, in case of an accident or sudden illness, planned or unexpected absence, or if you lose capacity, you may need someone to manage your financial/property affairs. It doesn’t matter if you are old or young or if you do a lot of travelling or not, there are benefits in having a Power of Attorney.
Different types of Powers of Attorney cover different circumstances and situations. It is important to understand the various options available so you can make an informed decision. We can explain how the different Powers of Attorney operate and prepare documents that are tailored to your needs.
This is general information only, and you should obtain professional advice relevant to your circumstances.
To find out more, please call 02 9266 0688 or email [email protected].