Having someone you trust to take control of your financial affairs when you are unable to do so is an important decision. We can help you appoint a suitable power of attorney, so that you can relax in the knowledge that someone you trust completely will step in to make the best decisions on your behalf when needed.
Power of Attorney
A power of attorney (POA) is a legal document in which you appoint a person or trustee organisation of your choice to manage your assets and financial affairs while you are alive. It enables your financial affairs to be managed according to your wishes when you do not want to manage them yourself, or are unable to – such as when you are ill, travelling or simply do not wish to be burdened with the day to day management of your financial affairs.
You can use a power of attorney for almost any financial purpose, tailoring it to your particular needs. For example, you can authorise your attorney to collect debts, vote at meetings, operate your bank account, sell your house, manage your investments or carry out any other function which can be lawfully delegated. You may cancel your power of attorney at any time.
There are two types of power of attorney
General power of attorney - this is only valid while you are of sound mind and able to make decisions about your affairs. Should the situation arise where you are no longer sound of mind (for example, following an accident or injury), the POA is automatically cancelled. This type of document is often used by persons travelling overseas for a designated period of time and who require their assets to be managed or their bills paid.
Enduring power of attorney - this will continue to have effect after you have lost your capacity to self-manage. This is important for everyone, but particularly for elderly people.
You should bear in mind that choosing a POA is an important decision and you must be able to trust that the person you appoint will act in your best interests. You can choose the level of decision making power and access to your finances that they have, and at what times they may act on your behalf.
Our team will be able to advise you about your unique situation and prepare the power of attorney document accordingly.
Some common questions about appointing a power of attorney:
Will I lose control over my financial affairs?
No. Making a power of attorney just gives formal authority to manage your financial affairs according to your instructions. Your power of attorney can be cancelled at any time, provided you have the capacity to do so.
What decisions can my power of attorney make?
In NSW, a power of attorney can only apply to financial or legal matters. These include receiving income, paying bills, taxation and contractual issues, investment and property management.
Decisions about your lifestyle, medical treatment or welfare are covered by enduring guardianship, which is a separate document.
Why have an enduring power of attorney?
If you don’t have an enduring power of attorney and you lose the capacity to manage your financial affairs, the NSW Civil and Administrative Tribunal (NCAT) may need to appoint a financial manager to make financial and legal decisions for you. This will not necessarily be the person you would have chosen, and this could cause stress and conflict for your family and friends. By making an enduring power of attorney, you are ensuring that your affairs are managed by the person or organisation of your choosing.
A person (typically a close family member) may make an application to NCAT to become your financial manager. NCAT will first assess your capacity to make your own financial decisions and make a determination following a hearing. NCAT will decide whether or not the person applying to manage your affairs is suitable. If not, the NSW Public Guardian may be appointed to manage your affairs.
Who can make a power of attorney?
In order to make a valid power of attorney you must be 18 years or over and be able to understand exactly what is involved. This means that you understand:
The authority your power of attorney will have and the kinds of decisions they will be able to make
When and how your attorney will have authority to exercise their power
The effect that the actions of your attorney could have on you
The options you have to cancel or change your attorney appointment in the future
How do I make a power of attorney?
Making a power of attorney involves a formal document which gives someone else the authority to make financial decisions on your behalf. The process is as follows:
You sign a form appointing as an attorney the person or trustee organisation of your choice
You may specify the types of decisions that your attorney will be able to make
Your attorney agrees to their appointment by signing the acceptance section of the form
Seeking advice from a lawyer is recommended, as everyone’s circumstances are unique and there can be many variations to a power of attorney. You can also see the NSW Trustee and Guardian to prepare your power of attorney document and also act as your attorney if you prefer not to burden your family or friends with this role.
I have a will, isn't that enough?
A power of attorney lets you appoint someone who can manage your financial affairs on your behalf while you are still alive. Your will distributes your assets according to your wishes after your death. Having both an enduring power of attorney and a will is important for peace of mind.
Who can witness a power of attorney?
At the end of all enduring power of attorney forms there is a prescribed witness certificate. This certificate can only be completed by:
A solicitor or barrister
A registrar of a NSW Local Court
A licensed conveyancer who has completed an approved course under the Powers of Attorney Act
An employee of Public Trustee NSW or a Private Trustee company who has completed an approved course under the Powers of Attorney Act
The certificate states that the witness:
explained the effect of the power of attorney directly to you before it was signed
was satisfied that you appeared to understand the effect of the power of attorney