Are you still able to manage your daily activities and finances? If so, take the opportunity to consider a scenario in which you are unable to act. Who would you want making decisions for you? How much power would you wish they had? And why is this authoritative figure necessary? These are the sorts of questions that you should be considering now.
What does Power of Attorney mean?
The power of attorney (POA) is a legal document which allows an individual to grant a separate individual/s authority over their decisions in the occasion that they are incapable or busy. There are broadly two categories, an enduring power of attorney and a general power of attorney.
General POA: This document will cease to operate you lose the mental capacity to make a financial decision.
Enduring POA: This document will continue to exist even if you lose capacity. Mental capacity may deteriorate due to dementia, stroke or various other brain injuries.
If you are still confused you can find out the difference between the two of them here.
Determination of your capacity?
In order to confirm your capacity, you are required to consult their local GP for an assessment. If capacity is competent then a written document will be granted for legal validity.
A person is eligible to be an attorney if they are;
- 18 years of age or older;
- Not insolvent under administration; and
- Not a care worker, a health provider or an accommodation provider for you.
Who should I choose?
So when you are deciding who your attorney should be, consider the following factors:
- Is the individual 18 years or older?
- Is the person trustworthy?
- Will they be competent in dealing with all my financial and property matters?
- Should I put conditions or restrictions of this person?
- Will this individual act in my best interests?
What if I don’t know?
If you’re unsure of who to delegate this role to, you are able to appoint the ‘NSW Trustee and Guardian’ as your attorney. This body offers assistance, which is designed to provide you safeguard from unforeseen events (such as massive increases in operational costs). This request will not entail a fee for the drafting of the POA, however you will incur costs if you lose capacity and require the ‘NSW Trustee and Guardian’ to act as your attorney.
How much power?
You are able to be specific in what authority you grant their attorney, having the option to either grant one specific issue or delegate the majority of their matters to their attorney – particularly financial and personal.
Examples of Financial Decisions
- Consent to paying certain bills,
- Manage assets
- Assistance with taxes
- Make deposits and withdrawals
Examples of personal care and welfare decisions
- Consent to giving, withholding or stopping medical treatments or services
What can I do if my Attorney is not acting in my best interest?
You have the ability to revoke the power of attorney at any time provided you have the mental capacity to do so.
“What if I’ve lost my mental capacity?”
If you have lost capacity and your attorney is not acting in your best interests, you are advised to confer with the ‘Guardianship Tribunal’ or the ‘Supreme Court’ to inquire into the issue.
What could happen if I don’t have a power of attorney?
If an individual were to become mentally incapable and thus be unable to manage their day to day finances, their bank would reject any instruction that is brought to them from an individual who is not legally recognised as their attorney.
Furthermore, is the situation, the guardian will be required to apply through the court, rather than by POA, in order to lawfully act on your behalf. This process via the court is costly and will often require continual costs throughout your life.
A POA can only be granted whilst an individual is mentally capable in understanding the nature of the document. Should an individual fall ill or experience an accident which results in incapacity, they will subsequently be unable to opt for a POA. As such, it is acknowledged that due to the fact some illnesses are unanticipated, individuals are recommended to proceed with the registration of a POA as soon as possible. This urgency will alleviate the unfavourable outcome of that may result due to incapacity, as it ensures your interests will continue to be protected by your attorney.
Steps to constructing a POA
- Decide whether the Attorney will be dealing with financial or medical matters – in a general or enduring nature.
- Choose your desired Attorney
- Download or write up at POA document
- Name the parties within the document
- Name the powers granted
- Gather witnesses, as it is necessary in some states to have the signing of the document witnessed.
- Have the document authorised by a notary, in order to reduce the chance that the documents validity will be contested.
The choice is in your hands
Therefore if you delay creating a power of attorney, your interests can be at risk should anything happen to you. But by creating a power of attorney today, you can give yourself peace of mind and security for your interests. Furthermore, if you are unsure about anything, it is best to get into contact with a lawyer for comprehensive legal advice.
Have more questions? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents and obtain a fixed-fee quote from Australia’s largest legal marketplace.