What is an “Enduring Power of Attorney” and why should I have one?
“Why do I need an Enduring Power of Attorney, I’m so young?” our answer is simple, to cover any unexpected illness, injury or disability, which might affect your capacity to make decisions. Should this situation occur, it would be an emotional time for your family but decisions may still need to be made as to your finances and other business matters and if there is no document in place appointing an Attorney, your family will need to approach the Guardianship Tribunal in an effort to have an attorney appointed. This can be distressing, time consuming and may be costly.
What is a Power of Attorney?
A Power of Attorney document is an important and powerful legal document and should only be signed after you have had legal advice as entering into a Power of Attorney requires you to trust the person you are appointing to look after your financial assets on your behalf. You can appoint someone to act for you for a specific period or while you are overseas, for example, but mostly the powers are intended to endure indefinitely.
What is an Enduring Power of Attorney?
An Enduring Power of Attorney is a legal document which allows you to nominate one or more persons to act on your behalf and gives the appointed attorney the authority to manage your legal and financial affairs, including buying and selling real estate, shares and other assets, operating your bank accounts, and paying your bills on your behalf. This power will continue to be valid if for any reason you lose your mental capacity to manage your own affairs.
Your attorney must only act with your best interests in mind and must keep accurate records and keep your money separate from their own. It is very important that you trust the appointed person implicitly. Unless you insert “limitations” in the document, an attorney may even sell your house on your behalf. Your attorney has all the same power you have.
You may consider appointing your spouse as your attorney and also a substitute attorney in case your spouse eventually cannot act (i.e. your children). You may appoint one or more attorneys to act on your behalf. If you choose to appoint more than one attorney, you will need to appoint them either “jointly” or “jointly and severally”:
- “jointly” means your attorneys must make decisions together and sign any necessary documents. This option may not be convenient if attorneys live apart;
- “jointly and severally” means your attorneys can make decisions together or separately and only one attorney need sign any necessary paperwork. However, there should be in place a mechanism to deal with situations where the attorneys have differing opinions on how to move forward with a particular asset. For example, if you have lost capacity and need to go to aged care but one attorney says yes to sell your house and the other attorney says no, whose decision should prevail?
Unless you are confident both attorneys can act well together perhaps you might stipulate the types of decisions which require unanimity.
Most states recognise powers of attorney signed in other states, however if you move interstate, it would be a good idea to have your power updated.
An Enduring Power of Attorney can be revoked at any time by simply notifying the attorney in writing they are no longer appointed.
Medical or lifestyle decisions
It’s important to note that an Enduring Power of Attorney cannot be used to make medical or lifestyle decisions on your behalf, for these types of decisions, an Appointment of Enduring Guardian should be prepared.
If you have any assets you should consider having in a place an Enduring Power of Attorney for peace of mind. Should you wish to discuss the preparation and obtain a quote for an Enduring Power of Attorney, please contact Gillian Kirwan directly on 02 8226 7321.