17-06-10
Heath Adams
What is a Power of Attorney?
A power of attorney is a legal arrangement that allows a person (“attorney”) to manage and make decisions for you about your money, investments, bank accounts, shares, real estate, assets and other such financial concerns.
There are two main types of powers of attorney:
- General or Ordinary power of attorney; and
- Enduring power of attorney.
The principal difference between both is that an enduring power of attorney continues even if you lose your mental capacity.
When should I consider a Power of Attorney arrangement?
A Power of Attorney may be beneficial in any circumstances that render you unavailable or unable to deal with your own financial affairs, for example, due to travel, a hospital operation or car accident.
You do not need to wait until such circumstances arise to have a Power of Attorney made. You may make the arrangements at any time simply on the condition that the attorney will only have the power to make decisions after a certain date or a certain event.
It is important to make your Power of Attorney sooner rather than later as once you lose the mental capacity to make your own decisions, it will be too late to have an attorney appointed.
What can my attorney do?
An attorney may make an extensive range of decisions that concern your financial affairs including but not limited to:
- Investing your money
- Buying, selling or leasing property including your home
- Accessing your money to pay your bills and expenses
- Buying or selling shares
- Selling your motor vehicle.
Is there anything my attorney cannot do?
There are a number of things an attorney cannot do including:
- making decisions concerning your health and lifestyle (in NSW, these decisions may only be made by an Enduring Guardian)
- giving away your money or property unless you grant them the power to do so
- making decisions for their own interests rather than in your interests
- anything you expressly prohibited them from doing under the Power of Attorney.
Who can be an attorney?
A person over the age of 18 may be your attorney. They may be a friend, family member, colleague or a professional.
We recommend that you seek professional legal advice before making a decision to appoint an attorney to ensure that that person will be the most appropriate in your particular circumstances.
Back