As a result there are now two documents available – a General Power of Attorney and an Enduring Power of Attorney.
Firstly, what is a Power of Attorney?
It is a document where you, the principal, appoint a trusted person or people, the attorney, to manage your assets for you. It can be as simple as accessing your bank account to pay bills or more significant in selling your property.
What is the difference between a General Power of Attorney and an Enduring Power of Attorney?
A General Power of Attorney is only valid while you are of sound mind. They are usually used for a specific purpose e.g. to sell a property, or for a specified time period eg. while you are overseas.
A General Power of Attorney becomes void if you become of unsound mind or you die, whichever occurs first.
An Enduring Power of Attorney continues to be valid, even if you become of unsound mind. It enables your attorney to continue to manage your assets for you, if you can no longer do so. An Enduring Power of Attorney, unlike the General Power of Attorney, must be explained to you by a prescribed witness e.g. a Lawyer.
An Enduring Power of Attorney becomes void when you die.
What if I don’t have an Enduring Power of Attorney?
If you don’t have an Enduring Power of Attorney and become of unsound mind, and therefore unable to manage your financial affairs, no person automatically has the right to manage your assets.
Not even if they are your husband or wife.
An application to the NSW Civil and Administrative Tribunal (formerly the Guardianship Tribunal) can be made and this would usually be by a close family member (the applicant). The applicant would apply to become your financial manager. If this person is not deemed fit by the Tribunal then the Tribunal may appoint the NSW Trustee and Guardian to manage your affairs.
Powers of Attorney prepared prior to 1 March 2014 should still be valid but please contact our Wills & Estates Team if you are unsure and wish to discuss further. Also, if you don’t have an Enduring Power of Attorney and would like us to prepare one for you, please give our office a call.