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Power of Attorney - when do we need one ?

  Power of Attorney FAQs

Q: What is a power of attorney?
A: A power of attorney is a legally binding document that gives another person permission to act on your behalf in business, finance, private matters, or legal concerns. The person given permission to act is called a donee or agent, while the person who created the power of attorney is the donor.

For instance, if you're part of the Australian Defence Force serving abroad, you can authorise your spouse with a power of attorney to sell property, operate your bank account, or carry out specific tasks for you while you're away.

Take note that the power of attorney you provide will be different from what others have since the authorisation you provide will be influenced by your circumstances and the tasks you decide to delegate to your agent.

Q: Why should I get a power of attorney?
A: A power of attorney ensures that someone will act on your behalf in case you are unavailable or have lost the ability to decide for yourself. These decisions could be for daily tasks like when to pay your utilities, or may involve major choices such as preparing your own will.

A power of attorney is important because financial institutions and various other establishments do not accept instructions from non-customers or individuals who have not been legally permitted to act as some sort of proxy for someone else.

Without a power of attorney, the court would have to intervene; the process is slow, expensive, and difficult.

Q: Who can make a power of attorney?
A: Anyone can grant a power of attorney, provided that they meet the two conditions:

  • They have to be at least 18 years old.
  • They have the legal capacity or competence to make the power of attorney.

The term "legal capacity/competence" needs to be qualified, however. It simply means you have the ability to understand, retain, and analyse information regarding the power of attorney that you will be giving to another individual. You should be able to grasp details such as:

  • What powers the attorney will have.
  • The kind of decisions the attorney can make.
  • When and how they can make decisions on your behalf.
  • The effects of the power of attorney on you.
  • How to cancel or modify the power of attorney.

The bottom line is that you understand your decision and that you made it at your own free will.

Q: What can my agent/attorney do?
A: This depends on what authority you give your attorney. Being the donor, you decide what the attorney can and/or cannot do; you can give them broad powers or limit it to certain kinds of decisions. You can even determine how long the attorney will have this power.

Q: What is a general power of attorney?
A: A general power of attorney authorises the donee to make legal and/or financial decisions on your behalf. General powers of attorney as typically used for a specific function or for a limited time (e.g. you want someone to purchase a property while you're away). It automatically ends if you lose the ability to decide for yourself.

Take note that if you just need to have someone withdraw money from your bank, you can simply arrange it through your financial institution without creating a power of attorney.

Likewise, if you need to claim a social security benefit, get in touch with Centrelink to find out.

Q: What is an enduring power of attorney?
A: An enduring power of attorney authorises the donee to make legal and/or financial decisions on your behalf. The main difference between a general and enduring power of attorney is its validity--an enduring power of attorney remains in effect even if you lose the ability to decide for yourself.

An enduring power of attorney allows donors to anticipate any unforeseen circumstances. For example, if the donor goes into a coma, their donee can make decisions regarding their medical treatment. Just remember to speak to your family about your enduring power of attorney since your agent has the authority to reverse treatment-related decisions made by family members.

Q: Can I get more than one attorney?
A: Yes, you can authorise more than one agent. However, you must choose whether your donee can decide "jointly", "severally", or "jointly and severally". Here are the differences between these three options:

  • Jointly means your all agents need to agree on the decision. Furthermore, all documents need to be signed by all agents.
  • Severally means either attorney can decide and sign documents by themselves.
  • Jointly and severally means either attorney can decide and sign documents by themselves or with the other agents.

Q: How long does a power of attorney last?
A: It depends on the type of document you create and how long you want it to last. A general power of attorney can last until the donor cancels the document, passes away, becomes mentally unable, becomes bankrupt, the attorney passes away, or the document's expiry date elapses.

An enduring power of attorney, on the other hand, lasts until the donor passes away, cancels the document while mentally capable, and becomes bankrupt. It may also be cancelled by the Supreme Court.

Q: How do I cancel a power of attorney?
A: You can cancel a power of attorney by simply destroying the document and any copies, or telling your agent that you've revoked their authority. However, it is recommended that you formalise the cancellation by writing a letter stating this.

Depending on your location, you may also fill up a revocation form or inform the corresponding government agency (e.g. if you're in NSW, register the cancellation at Land and Property Information).

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