You can protect yourself and your loved ones against unnecessary complications by setting up a Power of Attorney. This is a document that authorises another person to make legal, financial and property related decisions on your behalf for a specific point in time or if you have lost the mental capacity to make these decisions for yourself. The Power of Attorney is helpful as you get older and require assistance to make financial decisions and manage your legal affairs.
If you lose the ability to make your own decisions without having set up a Power of Attorney, then your loved ones would need to make an application to the relevant Court or Tribunal to be given the authority to make these decisions on your behalf. The Court or Tribunal will decide who is the best person to manage your legal and financial affairs, and if there isn’t any one suitable for the role, will appoint a public or corporate trustee to make decisions for you.
The Wills & Estates Team at Coutts can provide you with a well-rounded understanding about the types of Power of Attorney documents available and give you advice on the ramifications of your decisions when choosing an Attorney for your legal and financial decision making.
Frequently Asked Questions
A Power of Attorney is a legal document which authorises the person who is your attorney to make legal, financial and property related decisions on your behalf. This document effectively gives another individual the power to act in your name and do all of the things you would normally do for yourself.
Our Team works with you to ensure you are setting up the right Power of Attorney, and helps you choose and appoint the person or persons who would be suitable Attorney(s).
There are three types of Power of Attorney documents in New South Wales:
- A General Power of Attorney authorises the attorney to act on your behalf for a specific time or a specific purpose whilst you still have capacity to make your own decisions. This might be whilst you are working or travelling overseas. The General Power of Attorney is automatically terminated on the date you nominate in the document or if you lose mental capacity.
- An Enduring Power of Attorney authorises the attorney to act on your behalf if you no longer have mental capacity to make decisions for yourself. An Enduring Power of Attorney will only become terminated once you have passed away or by an order of the Court or Tribunal.
- A Corporate Power of Attorney is a legal document made by a company that authorities the attorney to act on the company’s behalf.
The legal requirements for a valid Power of Attorney in New South Wales are different depending on the type of Power of Attorney being set up. However, in all scenarios, it is important that you have the mental capacity to understand that nature and effect of the Power of Attorney document at the time you are making it.
Both the General Power of Attorney and the Enduring Power of Attorney will authorise another person (the Attorney) to act on your behalf and make legal, financial and property related decisions for you. The key difference between the two is that a General Power of Attorney will end if you die or lose the mental capacity to make your own decisions, whereas the Enduring Power of Attorney will continue to remain valid during your lifetime even if you lose the ability to make your own decisions.
You should carefully consider your individual circumstances and needs when choosing whether to set up a General Power of Attorney or Enduring Power of Attorney.
Someone who is your Attorney under a General Power of Attorney or Enduring Power of Attorney must always act in your best interests when making your legal, financial and property related decisions.
Their specific tasks could vary depending on any conditions or limitations you include in the Power of Attorney document, but broadly speaking, an Attorney would be able to:
- Manage your financial affairs and operate your bank accounts.
- Buy and sell your real estate if required and ensure that you have accommodation that is appropriate for your needs.
- Pay your bills and expenses on time.
- Manage and invest your assets.
- Manage your taxation obligations, such as your tax return.
The person who is your Attorney must not enter into any transaction that is a conflict of interest and must keep accurate records of all financial transactions.