Anyone over the age of 18 years can be made Power of Attorney, common choices are a spouse, relative or friend. However it is important to choose your attorney carefully, as you need to be able to trust them to make decisions in your best interest should the need arise. You will need someone with the ability to manage your financial affairs, be impartial and capable of communicating your wishes.
There are many reasons why you would appoint a Power of Attorney. A Power of Attorney can be broad or very specific as required. They can be limited to financial or medical decisions and can last as long as you specify.
Some common reasons for appointing a Power of Attorney include:
There are two different types of Power of Attorney:
A general Power of Attorney
This type is used to appoint someone to make legal and financial decisions on your behalf, for a specified period of time. A general Power of Attorney ceases to operate if you die or no longer have the mental capacity to make your own decisions. In NSW, a Power of Attorney can only apply to financial or legal matters, such as receiving income, paying bills, taxation and contractual issues, investment or property management.
Enduring Power of Attorney
Unlike a general Power of Attorney, an enduring power of attorney continues to operate if you have lost your capacity to make decisions. You must be of sound mind when making an enduring power of attorney. Your attorney will be able to make decisions about your lifestyle and general welfare when you no longer have the ability to do this for yourself.
A power of attorney can be used for almost any financial purpose. Having one enables you to manage your financial affairs according to your wishes if you cannot, or do not want to, manage them yourself. For example, if you are travelling for an extended period of time, having a power of attorney can relieve the burden of managing your financial affairs while you are away. In the event of being unable to make decisions for yourself, having an enduring power of attorney relieves the worry of financial and medical decisions, giving peace of mind that decisions continue to be made with your best interests in mind.
A Power of Attorney is a legal document and as such should be drawn up by a legal professional. You will need to complete a form and have it witnessed by an eligible witness.
The form for an enduring power of attorney is different to the one for a general power of attorney. The form must be witnessed by a barrister, solicitor, registrar of the Local Court, an employee of the NSW Trustee and Guardian or Trustee Company, a qualified overseas lawyer or a licenced conveyancer. That person must also sign a certificate stating that they have explained the document to you and that you understood its effect.
Your financial adviser can assist with the setup of your power of attorney and ensure its suitability for your own personal circumstances.Let's Talk