Understanding the Power of Attorney: Key Points and Recommendations

by LukeAdmin

By Jacqui Bilson, Principal Solicitor

Power of Attorney is a legal document allowing your appointed Attorney to manage your legal and financial matters, including money, real estate, and assets. It is possible to appoint a person to make medical, health care, and lifestyle decisions through an Appointment of an Enduring Guardian.

Should I appoint a professional Attorney?
Appointing a professional Attorney, such as the NSW Trustee and Guardian or a Solicitor, will incur significant fees. In some circumstances, appointing the NSW Trustee or a Solicitor may be appropriate. Please carefully review the applicable fees before proceeding with these options.

Does my Power of Attorney need to be enduring?
Yes, an enduring Power of Attorney will enable the appointment to continue after you have lost capacity.

What happens if I don’t have a Power of Attorney?
If you lose capacity and have not completed an enduring Power of Attorney, nobody (even your spouse) will be authorized to make decisions or manage your property and finances. Your loved ones (even if they have been your carer for an extended period) cannot pay bills, access accounts, or arrange property sale to assist with residential aged care needs.

Only your Attorney can authorise such things. Without a valid Power of Attorney, your family must apply to the Guardianship Division of NCAT or the Supreme Court to take control of your affairs. The Guardianship Division will appoint a financial manager for you, but this may not be the person you would have chosen. This is an emotional and stressful time for your family.

What is a substitute Attorney?
An Attorney has vacated their office if they die, resign voluntarily, become bankrupt, lose mental capacity or their authority is revoked. You should, if possible, ensure that you have a substitute appointed.

What is capacity?
A person must have the cognitive capacity to prepare a Power of Attorney. If you have a cognitive related diagnosis, do not delay seeing your Solicitor. The Solicitor will conduct an initial capacity assessment and if appropriate, the Solicitor can obtain a letter from your doctor to report on your capacity to provide instructions to your Solicitor. Even if there may be a slightest chance that a person may make future accusations, a letter should be obtained as a safeguard from potential claims against your Attorney or your Estate.

Should I use a template form?
A Power of Attorney is a personal process that will vary from person to person, so you must consider your specific needs. A template form will not be able to cater your specific needs.

For example, is your focus:

  • Easy transition for a loved one/trusted person to take over affairs
  • Safeguarding from a troublesome individual
  • Do you want your Power of Attorney to operate before or after you lose capacity?

Regardless of your goals, a focus should be preserving your financial independence.

Who to appoint?
You must appoint a person you trust. You can appoint more than one Attorney and substitute Attorney. If appointing more than one, your Attorney’s can be appointed jointly or jointly and severally.

Jointly: this means that your Attorneys must act together and consent to make decisions. This arrangement can be problematic if the jointly appointed Appointees do not get along or are often unavailable
Jointly and severally: your Attorneys may act individually, without the consent of each other, or can act together.

What are powers and limitations?
How much power your Attorney has is entirely up to you – you can decide what powers and authority, as well as any limitations on your Attorney.

Some additional powers you may consider appropriate include: gift giving; and, paying for your Attorney or another person/s reasonable living and medical expenses. The strict rule preventing your Attorney from spending your money other than for your essential needs can be a problem for your spouse Attorney. For example, your spouse may not be able to provide for themselves adequately. You can place any limits on the Attorney’s power. Some examples include:

  • Attorney is not authorised to sell my house (i.e. limiting tasks)
  • Until I am no longer able to make decisions for myself my Attorney may not make decisions without my express authority
  • The Attorney must submit accounts to a nominated accountant annually for audit
  • The Attorney must consult with a particular person/s before making decisions.

When should my Attorney commence?
Your Power of Attorney can commence immediately, or, when a Doctor or your Attorney considers that you need assistance.

Most importantly, start having the conversation! You must talk with your loved ones about your wishes.

Would you like Principal Solicitor, Jacqui Bilson, to speak at your next event*? Contact Bilson Law to arrange a group information session at no cost! Call 02 7233 0600 or email info@bilsonlaw.com.au. *min 25 attendees.

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