The answer is always ‘YES’ according to Renee Stevens from SRM Lawyers (located in Lane Cove). Renee is ITC’s legal eagle and she gives us the run down on why you absolutely positively should have a Power of Attorney. Take it away Renee….
A couple of months ago I wrote about the importance of having a valid will in place. Another process that should be considered by anyone over the age of 18, with the capacity to understand and appreciate the significance of the decision they are making, is the appointment of an attorney.
What is a Power of Attorney?
A Power of Attorney is a legal document appointing a person of your choice to manage your financial and legal affairs while you’re alive. It ceases to have effect upon your death. An attorney can act in respect of your money, bank accounts, shares, real estate and other assets but can’t make decisions about your lifestyle, medical treatment or welfare. Those decisions are covered by the appointment of an Enduring Guardian.
There are two types of Power of Attorney. A General Power of Attorney is usually for a short term appointment, say if you are having an operation or going on an overseas trip. It ceases to have effect if you lose your mental capacity. An Enduring Power of Attorney is for a lifetime appointment and will still operate in the case of mental incapacity. In both cases, the Power of Attorney will only cover your financial affairs and only operates while you are alive. You shouldn’t assume that your partner or ‘next of kin’ will be able to take care of things if you’re not able to. Banks, insurance companies, health funds and other institutions have stringent privacy measures in place and won’t speak to you, as another person’s informal representative, if the proper protocols have not been met.
Consider this example. Matthew and Bianca are in their early 30’s. Bianca is pregnant with their first child. Matthew is self-employed as a builder. Some months ago, Matthew was involved in a car accident and has been in a coma since. His future is uncertain. Bianca is concerned about their mortgage repayments going forward and decides to sell their large house for something less expensive. As Matthew and Bianca had prepared Enduring Powers of Attorney in favour of each other when they got married, Bianca is able to sell their house (which is in both of their names) without any delay or court order.
Choosing the best person for the job
An attorney can do anything with your property and money that you’re able to do, so it is important that you choose someone you can trust to look after your affairs. You can appoint more than one person and can specify whether the attorneys must act jointly (making all decisions together) or jointly and severally (either making decisions together or individually). Whilst partners and adult children are commonly appointed, trusted friends, siblings, grandchildren, nieces or nephews may also be appropriate. In making your decision, you should consider qualities such as the ability to manage financial and property-related matters, availability and physical proximity.
If no family member is suitable or available, an independent third party such as the NSW Trustee & Guardian, a trustee company or a professional such as a solicitor or accountant can be appointed as your attorney, but they will be entitled to charge for their services.
With great power comes great responsibility
‘Inheritance impatience’ is a driver of elder financial abuse and often occurs when family members misuse their powers in their role as attorney. Your attorney must always act honestly and avoid conflicts between their interests and yours. They must keep your money and property separate from their own and act in your interests at all times. Having a Power of Attorney in place does not mean that you lose your right to operate bank accounts, deal with real estate or exercise any other rights that you have while you continue to have the mental capacity to do so.
Anything your attorney does for you under this power, as long as it is legal, is binding on you. Restrictions and conditions can, however, be placed on your attorney’s powers and you can choose when it comes into effect. Your Power of Attorney can be cancelled at any time, provided you have the mental capacity to do so.
Don’t put it off
You never know what the future may bring. Although mental incapacity may not be a foreseeable issue, you might regularly travel overseas, require major surgery or simply do not wish to personally manage aspects of your affairs. If you don’t have a Power of Attorney in place and subsequently lose capacity, there will be nobody with legal authority to manage or make decisions about your property and finances. A court application for the appointment of a financial manager may be needed, who will not necessarily be the person you would have chosen.
SRM Lawyers are happy to assist you with a Power of Attorney.
Address: Level 1, 102-104 Longueville Road
Website: SRM Lawyers
Phone: 02 9188 9631
Mobile – 0419 257 392
Email – firstname.lastname@example.org
Mobile – 0410 466 286
Email – email@example.com
Linked In: SRM Lawyers
This is advice of a general nature, this article does not constitute legal advice and is not meant to be complete or exhaustive.
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