What is a power of attorney?
A power of attorney is a legal document that nominates and gives authority to another person to make personal/financial decisions on your behalf. Personal decisions such as your health care and welfare can be made by your Power of Attorney, as well as financial decisions such as the paying of your bills and how your income is spent.
Are there different kinds of powers of attorney?
There are two kinds of Power of Attorney:
- General power of attorney
- Enduring power of attorney
The difference between the two are that an enduring power of attorney has the ability to operate after the person loses the capacity to make decisions.
What is a general power of attorney?
A general power of attorney is used while you have the capacity and ability to make decisions. A general power of attorney ceases when you do not have the capacity to make your own decisions. A general power of attorney would be good to use in situations such as if you were to go overseas and need someone to maintain your finances while you’re away.
You are considered to have lost capacity to make decisions if you can’t;
- Understand the decision
- Voluntarily make the decision
- Communicate the decision in some way
What is an enduring power of attorney?
An enduring power of attorney would be used to make financial or personal decisions on your behalf when you don’t have the mental capacity to manage your own affairs. An enduring power of attorney must be at least 18 years old, not your paid carer, not your health provider and not a service provider for a residential service where you reside. Having an enduring power of attorney is a good option for elderly people.
What are the advantages of having a power of attorney?
- Your power of attorney can legally sign binding documents on your behalf (for example if you are overseas)
- Your power of attorney an make decisions for you if you lose the ability to make decisions for yourself and can no longer manage your financial affairs
- You can revoke your power of attorney at any time if you have the capacity to do so
If you don’t have an appropriate person to nominate as your attorney, you can apply to appoint the Public Guardian for personal decisions, and a Public Trustee for financial decisions.
What are the Attorney’s responsibilities?
A nominated Attorney’s responsibilities include;
- Act honestly and with care
- Act within your bests interests
- Obey your instructions
- Keep accurate records of their dealings
- Recognise your right to confidentiality
- Consider your existing supportive relationships, values and culture
- Apply the general principles under the Powers of Attorney Act 1998.
How do I appoint a Power of Attorney?
It is advisable to have a professional assist you with appointing a Power of Attorney. You will need to complete the relevant form and have a an eligible witness present when signing and completing the form.
You should choose your attorney carefully as you must be able to trust them and be confident that they understand your wishes and have the ability to manage your finances while acting in your best interests. A power of attorney should not have any conflicting interests and ensure they can remain impartial to all decisions.
Can I cancel or change my Power of Attorney?
You may want to cancel your power of attorney for reasons such as wanting to appoint a new attorney, a change of relationship between yourself and your attorney not being available.
To cancel a power of attorney, you must tell your attorney that you are ending their appointment, which should be done in writing. You will also need to inform your bank or any other businesses which your Attorney may have been dealing with. In some states in Australia, you might need to complete a revocation form to cancel any your power of attorney.
You can then sign a new Power of Attorney document that appoints a new power of Attorney.
More information? To find out more, give us a call on 1300 023 782 or email firstname.lastname@example.org.
The team at C&D Restructure and Taxation Advisory are here to help. As part of the Vault Group we can offer the full suite of financial products and advice to help you navigate the business landscape. Schedule a meeting here via Calendly or give us a call on 1300 1 VAULT (1300 182 858)
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