Powers of Attorney Act changes25-October-2013 Guardianship By admin
In the unfortunate event that you lose the ability to manage your own financial affairs, it is common for a trusted relative, friend or solicitor to take over the management of your affairs. But it is important that you elect a Power of Attorney while you still have the mental capacity to understand what you are signing.
Following a review of the Powers of Attorney Act in September 2013, two new forms have been created to replace the single form that was previously used to create both General and Enduring Powers of Attorney. So we thought it was a good time to explain the difference between a general and enduring power of attorney and under what circumstances you might need to appoint someone to manage your affairs.
What is a Power of Attorney?
A Power of Attorney is an important legal document made by a person (“the Principal”) allowing another person (“the Attorney”) to deal with the Principal’s property and financial affairs.
A Power of Attorney cannot be used for health or lifestyle decisions such as where you should live or what medical treatment you should receive. An Enduring Guardian would need to be appointed to make such personal decisions.
General Power of Attorney
A General Power of Attorney may be useful for a short-term appointment such as when you are going overseas and require an Attorney to look after your legal and financial affairs while you are away. It may also be useful if you want the Attorney to act in relation to certain specific transactions, such as the sale or purchase of a property.
A General Power of Attorney automatically terminates when you lose mental capacity. If this happens, it is necessary to apply to the Guardianship Tribunal to appoint a financial manager to make decisions on your behalf.
Enduring Power of Attorney
An Enduring Power of Attorney is more applicable if the Principal wishes the Attorney to make decisions for them in the long term. It will continue to operate after the Principal has lost mental capacity, unlike a General Power of Attorney.
Making an Enduring Power of Attorney is a means for you to appoint a person of your choosing to manage your legal and financial affairs if you become unable to do so.
When should a Power of Attorney be made?
A Power of Attorney must be made while you still have the mental capacity to fully understand what you are signing. You do not lose your rights to deal with your own legal and financial affairs for as long as you have mental capacity. You may stipulate in the form when you want the Attorney to start having power to deal with your affairs.
Different formalities apply depending on whether you use a General Power of Attorney or an Enduring Power of Attorney.
Who can I appoint as my Attorney?
The person you appoint should be:
someone you can trust to look after your affairs, as any lawful action they take will be binding on you.
over 18 years of age.
You may appoint more than one Attorney in which event you will need to indicate whether you want them to act jointly (so that they must all agree on any particular action), or jointly and severally (so that one will be able to act independently of the others).
If you don’t have an appropriate close family member or friend with the required skills, you may appoint a professional such as a solicitor or accountant or you can appoint the NSW Trustee & Guardian or a Trustee Company to act as your Attorney.
What are the Attorney’s obligations?
An Attorney is under a duty to act in your best interests in accordance with the provisions of the Power of Attorney.
The Attorney must:-
keep the Attorney’s own financial affairs and assets separate from yours;
keep proper accounts and records of all dealings.
How long does a Power of Attorney last?
A Power of Attorney continues for as long as you want it to. It can be cancelled at any time provided you have the mental capacity to make the decision.
As stated before, a General Power of Attorney automatically terminates if you lose mental capacity.
Any Power of Attorney will automatically terminate when you die.
What if there is a dispute?
A dispute concerning a Power of Attorney that cannot be resolved by the parties involved can be referred to either the Guardianship Tribunal or the Supreme Court of New South Wales.
It’s important that your estate planning is up-to-date. Streeterlaw has the expertise to manage the appointment of your Power of Attorney and can also act as your Attorney. To discuss your individual circumstances, please contact Streeterlaw Sydney Lawyers by phone on 8197 0105 or email email@example.com