Know the facts about Power of Attorney
A Power of Attorney is a legal document whereby one person (the appointee) authorises another (the attorney) to act on his or her behalf, generally in relation to financial and property decisions. It is important to be aware that the Power of Attorney cannot be used after you as the appointee passes away and it expires when you lose mental capacity; this is not the case if it is established as an Enduring Power of Attorney. The appointed attorney is often a solicitor and generally has the authority to sign documents for the appointee. Depending on the limitations and conditions set out within the Power of Attorney document the attorney may also have other responsibilities such as accessing and managing the appointee’s finances.
General Powers of Attorney are used for commercial or transactional purposes to conduct, for example, a sale or purchase of property. However, the attorney does not usually gain the right to make decisions regarding medical treatments and procedures for the appointee. An Enduring Power of Attorney is particularly useful as it allows you to appoint an attorney that will continue to act on your behalf even if you lose mental capacity. You can elect when you wish the enduring Power of attorney to come into effect that is, from the moment it is signed or it can come into effect only when you become of unsound mind.
An attorney can have significant power over your affairs. As such, an attorney must be over the age of 18 and should be someone you can trust, who is competent enough to make decisions and seek expert advice where necessary, who respects your wishes and who is likely to be in the locality and is also healthy enough to carry out the appointment. If your financial affairs are complex, you should appoint an attorney who is capable of managing complex affairs and is available to do so.
Your attorney must:
• Act in your best interests at all times;
• Act honestly and protect your assets;
• Prepare and keep records of all dealings and transactions; and
• Not renounce a Power during any period of your legal incapacity, except in limited circumstances.
It is also possible to appoint more than one attorney to act, and they may act jointly or severally.
• Jointly and severally – the attorneys can act together or separately;
• Severally – the attorneys can act separately; or
• Jointly – the attorneys must agree on all decisions.
Registration of your Power of Attorney is only required if the attorney is going to deal with your real property, for example, a mortgage, lease or selling your property. Setting up a Power of Attorney is an important action as this document enables another person to make decisions for an individual. In order to ensure the validity of the document and that an individual understands the extent of the power being provided certain formalities must be fulfilled.
A general Power of Attorney usually only requires a witness but an Enduring Power of Attorney requires a “prescribed witness” to sign a prescribed witness certificate. An Enduring Power of Attorney can only be witnessed by a:
• Solicitor or barrister
• Registrar of a NSW Local Court
• A licensed conveyancer who has completed an approved course under the Powers of Attorney Act, or
• An employee of Public Trustee NSW or a Private Trustee company who has completed an approved course under the Powers of Attorney Act.
The prescribed witness must attach to the document, a certificate stating that he or she explained the effect of the Power of Attorney to the associated parties before it was signed, and that they were satisfied that the appointee appeared to understand the explanation. If it is an Enduring Power of Attorney there must also be an acceptance by the attorney. By signing this document an attorney accepts his/her appointment.
We can help you create a Power of Attorney or an Enduring Power of Attorney and we can provide you with the information you need to make the best possible decision as well as ensuring all the formalities are fulfilled. Here at The Quinn Group our experienced team of lawyers are able to assist you should you require more information or advice on establishing a Power of Attorney. For this, or any other Wills & Estate information submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to arrange an appointment.