A Power of Attorney is a legal document that gives a trusted person the legal authority to act for you and to make legally binding decisions on your behalf if you are unable to make these decisions yourself, such as in the case of serious illness. If you do not have a Power of Attorney then you should contact us and find out more.

Below are 6 common Power of Attorney questions that you should know the answers to.

1. In what circumstances is a Power of Attorney important? 

  • To relieve yourself of the day-to-day demands of financial paperwork and record keeping;
  • As a safety net when travelling or to allow someone to handle your affairs in your absence;
  • To avoid burdening family or friends with the responsibility of looking after your affairs; or
  • If you are unable to manage your prosperity or financial affairs.

2. Does the Attorney need to be a lawyer?

The person appointed does not need to have legal qualifications – you can appoint anyone. Deciding on the person to be appointed should be done with careful thought and consideration as you are providing them with significant power.

An ideal attorney should:

  • Have integrity;
  • Be willing to act in that capacity;
  • Have competence in areas of relevance;
  • Be able to act in a business-like manner;
  • Be able to spare the time necessary for the task;
  • Live in the locality in which they are to act;
  • Be agreeable to respecting the confidentiality of the donor’s (the person giving the Power of Attorney) affairs; and
  • Be impartial and have no known conflict of interest.

3. Are there different types of Powers of Attorney?

There are two types of Powers of Attorney.

A General Power of Attorney is:

  • Only valid while the donor has legal capacity;
  • Useful if you are going away for an extended period and you do not want the authority to continue should you lose legal capacity; and
  • Usually drawn up for a specific purpose.

An Enduring Power of Attorney (EPA) which:

  • Continues to be valid even if the donor loses legal capacity due to disability or illness;
  • May empower your attorney to make financial, property, lifestyle and health decisions;
  • May be activated when required or upon loss of legal capacity; and
  • Allows your attorney to commence or to continue to manage your affairs even if you have become unable to give lawful instructions.

4. Is it better to have more than one attorney?

We recommend that you do have more than one attorney, or a substitute attorney. Therefore if the appointed attorney cannot act or continue to act, as it gives you more flexibility. Common instances where more than one attorney is appointed include:

  • When siblings are appointed together
  • A spouse and a child are appointed together

You can appoint attorneys to act “jointly” (this means they must agree on everything) or “severally” (this means one of the appointed persons can make decisions alone).

5. Should I pay my attorney?

This is not necessary to give legal effect to the power, and would normally only be considered if the attorney is a professional.

6. How do I know if the donor has sufficient mental capacity to make a power of attorney?

There is no simple formula, but in general terms they must be able to:

  • Understand the major consequences of a decision;
  • Take responsibility for making that choice; and
  • Make a choice based on the risks and benefits that are important to them.

If there is any doubt about capacity, it’s best to get in touch with a medical professional and ask for a written opinion. Remember, different powers require different levels of understanding. If a medical opinion about capacity is sought, it is wise to have the Power of Attorney signed on the same day as you get the medical report so there can be no subsequent claim that the appointment was invalid.

To find out more about Powers of Attorney and their benefits call us on (02) 9963 9800 or via our contact form here.