By conferring a power of attorney on an individual, you are allowing them to make important financial decisions on your behalf.
This appointment can be beneficial for a variety of reasons including when you are physically or mentally unable to do so.
Appointing a power of attorney can also assist your family members, friends and other individuals understand who you have trusted to look after your affairs so as to avoid any unnecessary confusion and delay when decisions need to be made.
There are two types of Powers.
A general power of attorney gives someone the ability to act on someone else’s behalf in financial matters such as paying bills and managing money if for any reason they are unable to manage financial matters themselves.
Some examples of when this could be helpful include when a person is incapacitated by illness, or you are travelling abroad.
An appointed power of attorney is able to attend the bank on your behalf, pay bills utilising your funds and sign documents in your stead.
It is important to note that a general power of attorney does not allow the attorney to continue to act on your behalf after you have lost the capacity.
Capacity is defined as when a person can process information, can communicate clearly and understands the impact of any decisions they make.
Remember: A POWER OF ATTORNEY ONLY RELATES TO FINANCIAL DECISIONS
AND NOT MEDICAL DECISIONS.
An Enduring Power of Attorney has the same powers as a general Power of Attorney, however, this type continues to operate when a person no longer has the capacity to make decisions.
A person must appoint their Enduring Power of Attorney before they lose the capacity for the appointment to be valid. Therefore it is important to do this once you become aware of any circumstance which may impact your future cognitive abilities. Examples include such things as being diagnosed with a degenerative illness such as Alzheimer’s.
Enduring Power of Attorney arrangements can come into effect immediately or contingent upon an event occurring, such as a medical professional providing a report that your capacity has diminished. Should you elect to make your Enduring Power of Attorney come into effect automatically, you are able to revoke the power at any time, provided you are still competent.
It is important to note that with both the General and Enduring Power of Attorney’s, your nominee cannot make lifestyle, accommodation or medical decisions on your behalf. The Attorney’s powers extend only to financial or property matters.
Should you require an individual to make lifestyle and health decisions on your behalf, you will need to enter into an Enduring Guardianship.
It is a requirement that your attorney is a competent adult. Therefore you should elect someone who you trust to carry out your decisions or to make appropriate decisions on your behalf. This person should be both willing and able to take the appointment and should let you know if there is any conflict that will prevent them from doing so.
It is helpful to have a preliminary discussion with your nominee as to whether they will agree to take the position and if so let them know as to what decisions need to be made and what your expectations of their actions would be.
If you provide your nominee from the outset with clear instructions regarding any financial and legal situations that may affect you, then you can be confident that they are acting in your best interest.
To safeguard your position you should also, if possible, write down your decisions and furnish a copy of these to your nominee and also other family members to help prevent conflict in the future. This is especially so in circumstances where there are other people who hold a different opinion as to those that you or your attorney may have.
The making of a Power of Attorney involves the signing of formal documents appointing your nominated attorney. On this form, you can indicate if the power you will be conferring will be general or enduring.
On this form, you also specify the types of decisions that you wish your attorney to make.
A person accepts the appointment by signing the acceptance section of the form. Your Power of Attorney is an important legal document and it is important to have it prepared by a professional so that your specific requirements are met. This is more so pertinent in circumstances where you wish this power to be enduring.
At Sarah Bevan Family Lawyers, our legal team can assist you in the creation of a power of attorney and will ensure that this caters for your individual needs. Our skilled staff take a diligent and considered approach in creating these documents so as to provide you with confidence and peace of mind, that your future affairs are looked after.