What is a Power of Attorney?
A Power of Attorney is a legal document that gives a nominated person or trustee organisation the legal authority to manage your assets and make financial decisions on your behalf. The choice of whom you appoint as your attorney is at your discretion however, care must be taken in the selection of your attorney(s) as an attorney has extensive powers in relation to the management of your financial and legal affairs. There are two types of Power of Attorney: General and Enduring.
General Power of Attorney
A general Power of Attorney is a legal document which allows the appointed person to manage financial and legal decisions on your behalf. You can place limitations on the powers that your Power of Attorney has, such as confining an attorney’s power to the purchase or sale of real estate. By creating a general or enduring Power of Attorney you do not lose the power over your financial or legal decisions. Some examples of when a General Power of Attorney is used include if you are too busy to sign various documents or when you are overseas and are not able to tend to pressing financial or legal decisions. A general Power of Attorney will cease when you lose mental capacity.
Some powers that a General and Enduring Power of Attorney has, includes but is not limited to;
- Paying your bills;
- Signing legal documents;
- Selling or purchasing assets;
- General management of your money;
- Accessing your bank accounts.
Enduring Power of Attorney
An enduring Power of Attorney confers the same power as a general Power of Attorney except it continues to be operative when you lose mental capacity and ends when you pass away unless appropriate provision is provided in the power of attorney extending the operation of your attorney until a grant of probate/letters of administration are granted by the Supreme Court of New South Wales in respect of your estate.
Importance of choosing the right person to appoint as your Power of Attorney
It is crucial that when appointing someone to be your Power of Attorney, that you choose someone whom you can trust will act within your best interests. They must be at least 18 years old and have capacity to make the relevant financial and legal decisions on your behalf. As the Power of Attorney confers significant power over your financial and legal decisions, it is important that you have confidence that the person you appoint will not abuse that power.
Can you revoke a Power of Attorney?
You may revoke your Power of Attorney at any time provided you have capacity to do so. You must notify your attorney in writing that you are revoking their appointment and serve a copy of the signed revocation upon the attorney. The attorney must receive notice of the revocation of their appointment in order for the revocation to be effective. You should also notify any institutions that you gave a copy of the Power of Attorney to that they no longer act on your behalf.
WMD Law has a team of experienced and dedicated Lawyers who can assist you in writing Power of Attorney documents. Please do not hesitate to contact our Will and Estate experts on 9525 8688 or email info@wmdlaw.com.au. We also invite you to download our free Estate Planning eGuide.
