A power of attorney is just as important for life planning as making a will. Many people prepare a will but do not give the same consideration to appointing an attorney until it is too late. A power of attorney is a legal document appointing a person or trustee organisation of your choice to manage your financial and legal affairs while you are alive. By appointing an attorney, you give them the legal authority to look after your financial affairs on your behalf.
There are a number of reasons to consider using a power of attorney including:
- It can free you of the day-to-day demands of financial paperwork and record keeping.
- You may be going overseas or around Australia and don’t want to deal with your financial affairs while you’re away.
- You become unwell or otherwise incapable to manage the demands of your financial affairs.
How to make a power of attorney – The process is fairly straightforward. You must complete an appropriate form and have it witnessed by a legally valid witness. This person can be:
- A solicitor or barrister
- A registrar of a local court
- An appropriately qualified licensed conveyancer
- An appropriately qualified employee of a public or private trustee company
An ordinary power of attorney is only legal while you have capacity. If you want to make sure your attorney can still operate if you lose the capacity to self-manage, you will need to appoint an enduring power of attorney.
Keep in mind too that a power of attorney only deals with financial and property matters and does not cover decisions about your lifestyle, medical treatment or welfare. These aspects are covered by an enduring guardianship.
A power of attorney also ceases when you die. The executor named in your will then takes over the responsibility of administering your estate.
It is important to choose your attorney carefully. You need to be able to trust this person and be assured that they understand your wishes, have the skills to manage your finances and will act in your best interests. Your attorney should have the business and financial capabilities to manage your affairs properly and be capable of keeping accurate records of all dealings and transactions they undertake on your behalf.
Making a power of attorney does not mean that you will lose control over your financial affairs. It simply gives your attorney formal authority to manage your financial affairs according to your instructions. Your power of attorney can be cancelled or revoked at any time provided you have the capacity to do so.