Choosing someone to act as your representative when you create a power of attorney is like getting married – you go into it with faith and trust that it’ll last forever. But how can you protect yourself with and from your power of attorney?
Like in marriage, situations change, relationships shift, and the situation that once suited you no longer exists.
So when it comes to choosing someone to act as your representative (or ‘attorney’ as the role is known), it’s critical to think about these three simple but key points.
- Make one.
- Choose a person, a group, or an organisation you trust as your nominated attorney.
- Keep it updated!
Firstly, what’s a power of attorney?
A power of attorney (POA) is a legal document that authorises your nominated representative(s) or organisation to make decisions on your behalf if you’re not able to make them yourself. These decisions might be financial such as paying bills, or legal if you have investment properties.
The POA might be useful if you’re travelling, for example, or more urgently, if you’re ill or injured – say, you’re in a coma after an accident or develop dementia.
There are two types: general and enduring.
- General power of attorney: Useful for short-term situations, for example, if you’re travelling overseas and need someone at home to make decisions such as sign documents, pay your bills etc. You can still control your affairs, including revoking (that is, cancelling) this arrangement at any time. It’s worth noting that if you die or lose the capability to make your own decisions, this arrangement becomes invalid.
- Enduring power of attorney: This continues for your lifetime, even if you lose the capability to manage your own affairs. An enduring power also becomes invalid when you die.
Either way, their role is to make sure they make decisions that you would normally make, follow your wishes, and in general, protect you.
Who should you nominate as your representative (your attorney)?
A power of attorney is usually granted to someone you trust – your spouse or partner, a parent, sibling, your child (if they’re over 18), your solicitor etc.
Whoever you choose, consider your decision carefully. Will they respect your wishes? Will they treat your affairs respectfully? Do they have the financial skills and smarts required? Will they keep their finances separate to yours? Will they ‘dip into’ your money for their own benefit?
This process makes you examine your relationships very carefully. Regardless, what works now, might not work in one, three, five, 10 or more years. No one’s road runs smoothly, and relationships and needs can change.
All that said, are you bound by your choice of attorney?
No! You can change your nominated representative … well, mostly.
Let’s start with the easy part. You can change your nominated representative for whatever reasons you want – they’re not respecting your wishes, you are no longer close to them, the relationship has changed, they’ve lost their ability to make their own decisions, or your circumstances have changed, and the person is no longer suitable. Or maybe they’ve just taken the attorney role too far, and you’ve changed your mind about their appropriateness to have the role. Let’s face it – money can make people behave very badly.
To cancel your power of attorney here’s what you need to do
1. Write to your nominated representative(s) to let them know about your decision to cancel the arrangement. If you don’t do this, your representative(s) can legally continue to make decisions on your behalf. We can help you do this to ensure the cancellation is carried out correctly.
2. Destroy the original POA document, and ask them to return all copies.
3. Contact your bank, real estate agent, health care provider, NSW Land Registry Office (if you registered with them for real estate assets) and anyone else your representative has been liaising with on your behalf. Advising them of the change reduces the risk that the POA with that nominated representative will continue to be in effect.
There is a legal procedure that needs to be followed for the cancellation of the power of attorney and appointment of a new attorney – Contact Us To learn more about how CM Laweyers can help.
When can’t I change my POA?
If you don’t have the capability (or mental capacity) to make decisions, then you won’t be able to revoke the Power of Attorney. This is in place to protect people from being exploited.
There are different tests for mental capacity, but in essence, the question to be answered is whether you’re able to understand the general nature of the decisions you’re making.
In life, things change, so it’s critical for you to get help from legal specialists who will act on your behalf and protect you when things happen.
Contact CM Law today. we will walk you through what needs to happen to ensure your wishes are carried out.