Power of Attorney
What is a Power of Attorney?
A Power of Attorney is a legal document in which one person grants another person or persons the authority to make financial decisions on their behalf. The authority that is given by this document includes the ability to withdraw funds from bank accounts to pay bills, to sell assets and to sign documents that make financial commitments on behalf of the person such as an aged care agreement.
The person appointed by the Power of Attorney is known as “the Attorney”.
Why do I need a Power of Attorney?
A General Power of Attorney can be signed by a person who decides to spend an extended period of time travelling overseas. The General Power of Attorney can be signed prior to the traveller leaving for their adventure and can be revoked upon their return. During the adventure, the Attorney can take care of the traveller’s financial affairs.
An Enduring Power of Attorney is a document that everyone above the age of 18 should have in place to ensure that if they become ill or have an accident and are unable to manage their financial affairs, they have someone available to step in and take over.
What sort of Enduring Power of Attorney should I have?
Enduring Powers of Attorney can be prepared in two ways:
- To come into effect immediately and to continue on and after you become ill or have an accident and lose your mental capacity, or
- To come into effect only if you lose your mental capacity at a future time.
Experience tells us that it is handy to have an Enduring Power of Attorney that comes into effect straight away.
This is because sometimes it is desirable for you to have someone take care of your finances even if you haven’t lost your mental capacity – such as if you have an extended hospital stay to recover from an accident or illness.
If your Enduring Power of Attorney comes into effect straight away, it also means that if your Attorney ever needs to use the power they have been given because you have had an accident or become ill, they don’t need to obtain a doctor’s certificate to show that you do not have mental capacity. They can just get on with the job.
When can I arrange a Power of Attorney?
You can only arrange and sign a Power of Attorney if you have mental capacity. It is too late to organize it if you become ill and no longer understand financial matters. It is therefore important to make sure that you get this document in place so that it is there in future if you need it.
What happens if I don’t have one and I need one?
This situation is an unfortunate one because it means that your loved ones will need to make an application to the South Australian Civil and Administrative Tribunal for an order that they be appointed as your administrator. Once this order is obtained, they can then manage your financial affairs, subject to some reporting requirements that they are bound by.
To avoid putting your family through this in the event of your ill health, make sure that you have proper arrangements in place. Don’t delay. Contact us to arrange to have an Enduring Power of Attorney put in place today.