Have you set up a Power of Attorney?
by Bottrell Wealth- Mar 12, 2021
- 0
- Category: Aged Care, Money Tips, Retirement
Don’t forget these important documents
What would happen if you were physically unable to sign important documents or became mentally incapable of making key decisions? This is when a Power of Attorney becomes a vital tool in managing your life – when you are unable to.
Put simply, a Power of Attorney is a legal document that allows another person to act on your behalf. There are three different types of Power of Attorney (POA) arrangements – a General POA, an Enduring POA and Medical POA. The differences are important to note for the purposes of managing your estate.
Types and uses
Under a General Power of Attorney you appoint someone to act for a specific period of time or for a specific purpose. About the only things your attorney can’t do is to make a will or enter into a contract of marriage on your behalf! A General POA ceases to be effective if you lose your mental capacity.
An Enduring Power of Attorney acts in the same way as a General POA but it has the advantage that if you lose the capacity to make decisions for yourself your attorney will be able to do so. Enduring Powers of Attorney can cover your financial affairs, or, with an Enduring Power of Guardianship, your nominee can also make decisions regarding lifestyle issues, such as where you live.
A Medical Power of Attorney may also be executed (depending on the state in which you live, this document can have a different name). This directive can help to ensure that your wishes in relation to medical treatment will be considered if you are unable to express those instructions yourself.
Appointing or revoking an attorney
Although the person you appoint as your attorney has a legal obligation to act in your best interests, it is obviously important that you trust your nominee and are confident that he or she understands and will respect your wishes. In many cases you can appoint joint attorneys, and even stipulate that they must agree on any decision.
Most people appoint a spouse, partner, adult child or other trusted family member as their attorney. In some cases, professionals such as an accountant or lawyer may fill the role.
Establishing a Power of Attorney
Enduring Powers of Attorney will often be prepared by a lawyer when Wills are made, although relevant forms can also be obtained from legal stationers or downloaded from the websites of relevant state government authorities.
A Power of Attorney may be revoked simply by telling your nominee that they are no longer your attorney and the original and all copies of the POA form destroyed.
The rules for Powers of Attorney vary from state to state, so it is always beneficial to seek professional advice when drawing up this important legal document.
More information:
www.moneysmart.gov.au Powers of Attorney
