Every day in Australia hundreds of people just like you lose control of their property, finances and their lives as a result of illness or accident... but luckily it doesn't have to happen to YOU!
Appointing an Enduring Power of Attorney in NSW
Loss of mental capacity can affect anyone… not just the elderly and infirm. An accident, a temporary illness or a permanent disability can strike you at any time, without warning. That’s why it pays to be prepared with an Enduring Power of Attorney! You should consider NOW giving someone you trust your Power of Attorney… before it’s too late! A Power of Attorney can save you and your family from unnecessary anguish and financial difficulty.
Consider these real-life examples…
Imagine you’re driving to work one morning, moving through the traffic lights on green. Suddenly you hear a screech of brakes, and the crunch of metal on metal and then… nothing! You wake up in hospital having suffered head injuries and brain damage. No matter how hard you try you can’t communicate, and can’t sign your name. No-one can act for you. Your affairs are left in limbo… your assets are frozen!
You decide to call in on your mother on your way home from work. Your father is enjoying his weekly game of bowls down at the club. While he’s out, your mother has suffered a stroke and has been unconscious for several hours. Despite the best of care her recovery is slow, and she is likely to be permanently disabled. Your father wants to sell the home and buy another, more accessible for your mother. But your mother and father are joint owners of the home, and because your mother is unable to sign a contract or transfer document, the home can’t be sold.
Situations like these can be easily avoided. How? By signing a Power of Attorney NOW!
Frequently Asked Questions (FAQs)
1. What is an Attorney?
An attorney is a person (or persons) who you appoint to be in control of your assets and finances, if you are capable and/or incapable of managing your assets and finances. Your attorney can to do such things as buy or sell real estate, operate your bank accounts and/or make general enquiries on your behalf.
2. What is a “Power of Attorney”?
A Power of Attorney (POA) is a document which enables the person (or persons) of your choice to act in your place, and do the things you would normally do yourself…
… things like signing documents, paying the bills and the rent, doing the banking. The person you choose, your Attorney, has the right to stand in your shoes when you wish them to look after your affairs.
3. Why would you need a Power of Attorney?
In the past, Powers of Attorney were mainly used for very specific purposes. For example, if you went overseas, you could give someone your POA to handle the sale of your home. Nowadays, POA are more often used as a safeguard to ensure that, should the need arise, another person can step in and do the day-to-day things for you… things that we generally take for granted.
What would happen, for instance, if you fell very ill, and could not even sign your name on your joint bank account where both signatures are required? Giving POA to your partner can avoid a lot of delay and anguish in this situation.
Like us, financial planners strongly recommend that their clients grant POA so their assets are not locked up if a person lacks what is called legal capacity to sign documents or do other things.
4. Who can be appointed as a Power of Attorney?
Anyone who is over the age of 18. Preferably, it would be a spouse, child, children, near relative or some other significant person in your life, whom you trust.
5. Why cant you wait until something happens and then grant Power of Attorney?
Say you suffer an accident, or a stroke, which leaves you unable to understand, speak, communicate, or write. This means you don’t have the legal capacity to make decisions. Then it’s too late. You cannot give Power of Attorney if you don’t have the legal capacity to understand the Power of Attorney document itself and make decisions. A person who has suffered an irreversible problem, such as dementia or brain damage, may be unable to give Power of Attorney.
If you know a person who, due to age or health problems, may be at risk of suffering dementia, a stroke or any other serious illness, it might be a good idea to talk to them about giving Power of Attorney before it’s too late.
6. What is an Enduring Power of Attorney?
There have been changes to legislation applicable to Powers of Attorney. As a result there are now two documents available – a General Power of Attorney and an Enduring Power of Attorney.
An ‘Enduring’ Power of Attorney is the most common type of Power of Attorney made these days, because it lasts, or endures, even if you, the person giving the Power of Attorney, suffer unsoundness of mind.
Normally a basic POA would become invalid as soon as you suffer loss of capacity through unsoundness of mind. This is a protection given automatically by the law… if you suffer loss of legal capacity, you cannot cancel a POA you have given, so the law does it for you.
However, most people give an Enduring Power of Attorney so that it continues to be valid after the point in time of unsoundness of mind. Such a Power requires special wording, and the law requires that it MUST be explained to you by your lawyer before you sign.
If the difference between the two documents is still unclear, please give one of our team members a call.
7. 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. your lawyer.
An Enduring Power of Attorney becomes void when you die.
8. 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 – NCAT (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 – TAG to manage your affairs.
9. Can a Power of Attorney be tailored to suit your needs?
Yes. The variations are many. You may want a Power of Attorney, for example, to come into effect from a certain date, or from the date you sign it. You may wish the Power of Attorney to come into operation only when you are overseas, or only if you suffer a loss of legal capacity.
You can set a fixed time when the Power of Attorney is to cease, for example when you return from that overseas holiday, or when you recover from illness.
You can appoint more than one person to act as your Attorneys, either independently or together, and you can choose another person as an alternate, should your preferred person be unable to take on the task.
10. When does my Power of Attorney end?
When you die, or when you revoke it, or when it is terminated by the Supreme Court or Guardianship Tribunal.
11. Can I change my mind after I have appointed an Attorney?
12. Does my Power of Attorney have to be registered with the Registrar General?
Only if your Attorney is buying, selling or transferring real estate on your behalf.
13. How can you stop the person you appoint as your Attorney taking advantage of you?
You can place limits on how your Power of Attorney is to be used. You may decide that your Attorney is not allowed to sign a document or do something which leads to your Attorney receiving a benefit. The Power of Attorney may be conditional upon your doctor providing a medical certificate to state that you have suffered a loss of capacity through unsoundness of mind.
You can see there are many ways we can draft a Power of Attorney, so you should discuss your options with us. Then we can prepare the document according to your personal requirements.
14. Why does a Lawyer have to prepare your Power of Attorney?
While the final document may look relatively simple, there are many legal questions to be considered to ensure the Power expresses your instructions clearly.
There are also technical rules under the provisions of the Conveyancing Act, about the drafting and signing of a Power of Attorney.
You cant give an effective enduring Power of Attorney without having a lawyer explain the document to you before you sign, and the Lawyer signing a certificate that he or she has carried out that task.
If you draw up your own Power of Attorney, you run the risk that it could be ruled invalid just when you need it most… when something happens to you.
Lets face it … its not worth the risk!
15. How much will you need to spend to gain this peace of mind?
We will be happy to provide you with an estimate of how much your Power of Attorney will cost before you commit yourself. The reason we can’t set out a fixed cost in this Fact Sheet is that everyone’s needs are different. Generally we can provide you with an especially attractive package if you instruct us to prepare your Will, Power of Attorney and Guardianship documents at the same time, or if you and your partner are having mutual Powers of Attorney, or if you’re on a pension.
As you can see, it’s vital you do take the small steps required to get the full protection of an Enduring Power of Attorney.
16. What other services can Turnbull Hill Lawyers provide?
As well as expert advice on Wills, Powers of Attorney and Enduring Guardian documents, we can advise you on Deceased Estates, Testamentary Trusts and Estate Planning and Disputed Wills.
We have disabled access at all of our offices for your comfort.
If you’re physically unable to come to our office, just call one of the members of our Wills and Estate Planning Team to make special arrangements for us to come to you.
17. When signing a document as Power of Attorney, what is the correct information one must supply with their signature?
If you’re signing a document under a power of attorney then you need to write under your signature “signed by [name of attorney] under power of attorney dated [insert date].” If the power of attorney has been registered then you need to also write the registration number.
18. What happens if my Power of Attorney abuses that power?
Click this link to read our article on this topic: What happens if my Power of Attorney abuses that power?
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24/05/2011 by Natalie Power The difference between a Power of Attorney and Enduring Guardianship
08/04/2010 by Warwick Gilbertson Changes to the Law of Intestacy
24/02/2016 by Rani Gandha What happens if my Power of Attorney abuses that power?
01/06/2016 by Natalie Power How is testamentary capacity determined when making a Will
25/10/2017 by Adrian Corbould Solicitor Trust Accounts: Of no interest