Powers of attorney may sound complex, but in essence, it involves giving another person the authority to make decisions for you in the event that you lose the capacity to make your own decisions. These decisions can be both personal and financial. Personal decisions include health decisions and living arrangements, while financial decisions refer to the control and management of your finances. Powers of attorney come into play when you can no longer make your own decisions due to injury or illness. There are two types of powers of attorney: a general power of attorney and an enduring power of attorney.

Forms of Powers of Attorney

A general power of attorney makes financial decisions for you for only a certain period of time. This is helpful when you are overseas and may need someone to continue to pay your bills and make financial decisions for you while you’re away. An enduring power of attorney can make both personal and financial decisions and commences when you lose your own capacity to make your own decisions. However, a general power of attorney can only be used while you still have capacity to make your own decisions and gives limited power to the person/s you appoint as attorneys.

powers of attorney, enduring power of attorney, testamentary capacityWhen creating a power of attorney, it is essential to understand the legal requirements. Legal advice will provide essential information such as:

  • the consequences of having a power of attorney
  • specifying the actions of what your power of attorney can do
  • the time limits of your power of attorney
  • the terms outlining the loss of capacity
  • the control your power of attorney has

Because powers of attorney give such wide-ranging power to your appointed attorneys, it’s important that you seek legal advice to understand exactly what the document will do. You should leave your original document in a safe place, such as with your bank, but it’s important to keep a copy to refer to.

You should also give a copy to anyone else who may need to be involved, such as:

  • your attorney
  • your doctor
  • your solicitor
  • your accountant
  • your stockbroker
  • your bank.

You do not need to register your completed document unless it is likely to be used in transactions related to buying or selling land. To register your document, take the original document to the Titles Registry and pay the fee.

Powers of Attorney: Who To Appoint?

powers of attorney, enduring power of attorney, testamentary capacity, mental capacityBefore you begin this process, it is best to have someone in mind for being your power of attorney. As this person will be making very important decisions on your behalf, you should consider who to appoint very carefully. As a minimum, the person must be over 18 years of age. They are also not permitted to be your paid carer, your health provider or work at where you are living (i.e. residential provider). Consider who you can trust or who seems to be responsible with their finances. However, if you cannot think of anyone, then you can appoint a Public Guardian; someone who works for the government and specialises in handling these forms of cases.

Contacting a lawyer and seeking legal advice will help you understand what exactly a power of attorney must do in regards to conduct and personal/ financial decision making. However, you can always revoke your power of attorney while you still hold capacity. In this instance, there are also other ways in which powers of attorney may cease. These include the death of your attorney, marriage, divorce, the beginning or end of a de-facto relationship or the documents you wrote are void. Unfortunately, even if you choose someone who you believe would function properly in this new role, things may go wrong. If your power of attorney goes against your wishes, then an investigation by the Public Guardian may begin and the court may become involved.

Powers of Attorney:Capacity

Section 41 of the Powers of Attorney Act 1998 states that for those wishing to make an power of attorney, a person is regarded to have sufficient capacity only if they understand “the nature and effect of the Enduring Power of Attorney”.

Adults are presumed to have capacity. A person must have the capacity to understand the role of a power of attorney and how they function. If you are worried that your capacity is declining, it is best to discuss these issues with your lawyer and doctor. Most lawyers will ensure that you have directions that should be followed once you no longer have capacity. In most cases, this is when an enduring power of attorney comes into action.

We can help you establish a power of attorney or give advice on how to act under the stipulations of a power of attorney. If you believe that a power of attorney is being misused or abused, we can help you. Contact us today for your FREE, 10-minute phone consultation.