What is a Power of Attorney?
A Power of Attorney is a legal document made by one person (Principal) that nominates another person (Attorney) to manage the principal’s money, bank accounts, shares, real estate and other assets. The person who manages the financial affairs for the principal is called the ‘attorney’. |
Appointing an attorney gives your attorney the legal authority to look after your financial affairs on your behalf whilst you are still alive.
You can appoint an attorney to act for you in a variety of circumstances such as an extended interstate or overseas trip, or for a time when you are no longer able to manage your affairs.
A Power of Attorney can help if you cannot look after your finances for yourself. For example, if you become ill, are confined to hospital or become unable to go to banks, government offices or real estate agencies, then you may need someone else to do these things for you. If you want someone to be able to buy, sell or deal with real estate on your behalf, then a Power of Attorney is essential.
Note: The word ‘attorney’, when used in the expression ‘power of attorney’, does not mean that the person appointed has to be a solicitor or lawyer.
A Power of Attorney only authorises an attorney to act in relation to legal and financial matters. It does not allow the attorney to make personal (including medical) decisions for the principal. Anyone who wants another person to make personal decisions for them in NSW should appoint an enduring guardian under the Guardianship Act 1987.
In Australia there are two types of Powers of Attorney:
• A General Power of Attorney, and
• An Enduring Power of Attorney.
Since September 2013 there are separate prescribed forms for each of the two types of power given.
General Power of Attorney
· short term appointments
· one-off transactions
· terminates if you lose mental capacity.
A General Power of Attorney can be useful for a short term appointment, for example if you are going overseas for a month or two and wish to appoint an attorney to look after your legal and financial affairs while you are away.
It is also useful if you want the attorney to act only in relation to certain one-off transactions, for example to buy or sell property, shares or other financial assets on your behalf. A General Power of Attorney can be easily tailored to meet your requirements.
To make a General Power of Attorney your signature need only be witnessed by a person over the age of 18 years (the witness may not be the person you are appointing as your attorney). It is not necessary for the attorney to sign the Power of Attorney.
A General Power of Attorney may start as soon as it is signed by you and given to your attorney. If you do not want your attorney to start using the Power of Attorney straight away, you can state on the Power of Attorney form when you want it to start.
A General Power of Attorney automatically terminates if you lose mental (or decision-making) capacity after its execution, therefore if you wish the Power of Attorney to continue if you lose mental capacity, use the Enduring Power of Attorney prescribed form.
If you lose mental capacity, the attorney appointed by a General Power of Attorney must immediately cease to act as your attorney. If you have a General Power of Attorney and subsequently lose capacity, you cannot make another Power of Attorney because you lack the mental capacity required to do so.
In this scenario, the only way to have someone make decisions on your behalf is to approach the Civil and Administrative Tribunal to seek the appointment of a financial manager. For this reason, it is suggested that elderly people consider using the Enduring Power of Attorney instead of the General Power of Attorney.
Enduring Power of Attorney
· long term appointments
· continues to operate after the principal has lost mental capacity to manage their own affairs.
An Enduring Power of Attorney is normally used if the principal wishes their attorney to make decisions for them in the long term. An Enduring Power of Attorney can be useful because you may become unable to look after things for yourself at some stage in the future. This could be due to physical problems, loss of mental capacity or something unforeseen such as an accident. By making an Enduring Power of Attorney, there will be someone who can legally look after your legal and financial affairs if you become unable to do so.
It is important to make an Enduring Power of Attorney while you still have mental capacity and it is a cheap, easy and practical step to prepare for the future.
Once you have lost the mental capacity to understand what you are doing, you cannot make a Power of Attorney.
An Enduring Power of Attorney cannot be revoked if you lose mental capacity so if you want the Power of Attorney to cease if you lose mental capacity, use the General Power of Attorney form.
Who should I appoint?
The person appointed as your attorney can be any person over the age of 18 years who is able to assist you with the management of money or property – a relative, friend or professional adviser. You may choose more than one attorney and specify if they are to act jointly, i.e. both must agree, or severally i.e. either attorney may make a decision without consulting the other attorney.
When does my attorney act?
An Enduring Power of Attorney cannot start until the attorney/s accept their appointment by signing the acceptance section of the prescribed form.
You may set whatever limitations or conditions on your attorney that you choose. An attorney must always act in your best interest. If your attorney does not follow your directions, or does not act in your best interest, you should revoke the power of attorney. You or someone on your behalf should inform the attorney of the revocation, preferably in writing. The attorney must then immediately cease to act as your attorney. If anyone else, such as a bank, has been advised about the Power of Attorney, that person or entity should also be informed of the revocation.
Occasionally, people will change their minds and grant a new Power of Attorney without formally revoking the first one. This can cause confusion and raise questions about which is the valid appointment. Unless the attorney has been informed in writing of the revocation, the first appointment is still considered to be legally valid.
Further Information
Should you wish to make a Power of Attorney either consult your solicitor or you may make an appointment with the NSW Trustee & Guardian. You can contact your nearest branch of the NSW Trustee & Guardian by calling 1300 364 103.
http://planningaheadtools.com.au/make-a-power-of-attorney/
https://www.carersnsw.org.au/advice/plan-ahead/powers-of-attorney/
For UK References click here.
Anne McR. Australia
NOTE: unless otherwise stated, the information in this document is based on the laws of New South Wales. People living in other places are invited to make their own inquiries. This document is for general information purposes only and does not constitute legal advice.
You can appoint an attorney to act for you in a variety of circumstances such as an extended interstate or overseas trip, or for a time when you are no longer able to manage your affairs.
A Power of Attorney can help if you cannot look after your finances for yourself. For example, if you become ill, are confined to hospital or become unable to go to banks, government offices or real estate agencies, then you may need someone else to do these things for you. If you want someone to be able to buy, sell or deal with real estate on your behalf, then a Power of Attorney is essential.
Note: The word ‘attorney’, when used in the expression ‘power of attorney’, does not mean that the person appointed has to be a solicitor or lawyer.
A Power of Attorney only authorises an attorney to act in relation to legal and financial matters. It does not allow the attorney to make personal (including medical) decisions for the principal. Anyone who wants another person to make personal decisions for them in NSW should appoint an enduring guardian under the Guardianship Act 1987.
In Australia there are two types of Powers of Attorney:
• A General Power of Attorney, and
• An Enduring Power of Attorney.
Since September 2013 there are separate prescribed forms for each of the two types of power given.
General Power of Attorney
· short term appointments
· one-off transactions
· terminates if you lose mental capacity.
A General Power of Attorney can be useful for a short term appointment, for example if you are going overseas for a month or two and wish to appoint an attorney to look after your legal and financial affairs while you are away.
It is also useful if you want the attorney to act only in relation to certain one-off transactions, for example to buy or sell property, shares or other financial assets on your behalf. A General Power of Attorney can be easily tailored to meet your requirements.
To make a General Power of Attorney your signature need only be witnessed by a person over the age of 18 years (the witness may not be the person you are appointing as your attorney). It is not necessary for the attorney to sign the Power of Attorney.
A General Power of Attorney may start as soon as it is signed by you and given to your attorney. If you do not want your attorney to start using the Power of Attorney straight away, you can state on the Power of Attorney form when you want it to start.
A General Power of Attorney automatically terminates if you lose mental (or decision-making) capacity after its execution, therefore if you wish the Power of Attorney to continue if you lose mental capacity, use the Enduring Power of Attorney prescribed form.
If you lose mental capacity, the attorney appointed by a General Power of Attorney must immediately cease to act as your attorney. If you have a General Power of Attorney and subsequently lose capacity, you cannot make another Power of Attorney because you lack the mental capacity required to do so.
In this scenario, the only way to have someone make decisions on your behalf is to approach the Civil and Administrative Tribunal to seek the appointment of a financial manager. For this reason, it is suggested that elderly people consider using the Enduring Power of Attorney instead of the General Power of Attorney.
Enduring Power of Attorney
· long term appointments
· continues to operate after the principal has lost mental capacity to manage their own affairs.
An Enduring Power of Attorney is normally used if the principal wishes their attorney to make decisions for them in the long term. An Enduring Power of Attorney can be useful because you may become unable to look after things for yourself at some stage in the future. This could be due to physical problems, loss of mental capacity or something unforeseen such as an accident. By making an Enduring Power of Attorney, there will be someone who can legally look after your legal and financial affairs if you become unable to do so.
It is important to make an Enduring Power of Attorney while you still have mental capacity and it is a cheap, easy and practical step to prepare for the future.
Once you have lost the mental capacity to understand what you are doing, you cannot make a Power of Attorney.
An Enduring Power of Attorney cannot be revoked if you lose mental capacity so if you want the Power of Attorney to cease if you lose mental capacity, use the General Power of Attorney form.
Who should I appoint?
The person appointed as your attorney can be any person over the age of 18 years who is able to assist you with the management of money or property – a relative, friend or professional adviser. You may choose more than one attorney and specify if they are to act jointly, i.e. both must agree, or severally i.e. either attorney may make a decision without consulting the other attorney.
When does my attorney act?
An Enduring Power of Attorney cannot start until the attorney/s accept their appointment by signing the acceptance section of the prescribed form.
You may set whatever limitations or conditions on your attorney that you choose. An attorney must always act in your best interest. If your attorney does not follow your directions, or does not act in your best interest, you should revoke the power of attorney. You or someone on your behalf should inform the attorney of the revocation, preferably in writing. The attorney must then immediately cease to act as your attorney. If anyone else, such as a bank, has been advised about the Power of Attorney, that person or entity should also be informed of the revocation.
Occasionally, people will change their minds and grant a new Power of Attorney without formally revoking the first one. This can cause confusion and raise questions about which is the valid appointment. Unless the attorney has been informed in writing of the revocation, the first appointment is still considered to be legally valid.
Further Information
Should you wish to make a Power of Attorney either consult your solicitor or you may make an appointment with the NSW Trustee & Guardian. You can contact your nearest branch of the NSW Trustee & Guardian by calling 1300 364 103.
http://planningaheadtools.com.au/make-a-power-of-attorney/
https://www.carersnsw.org.au/advice/plan-ahead/powers-of-attorney/
For UK References click here.
Anne McR. Australia
NOTE: unless otherwise stated, the information in this document is based on the laws of New South Wales. People living in other places are invited to make their own inquiries. This document is for general information purposes only and does not constitute legal advice.