What Is A Power Of Attorney?
Power Of Attorney
When considering the future, particularly finances, it’s not uncommon for people to think about if the worst should happen. This usually means preparing a will and appointing an executor to ensure all debts are paid and that any money or assets left over are allocated per their wishes. What people often don’t think about is who can administer their finances while they are still alive. This requires giving someone power of attorney.
If you are unwell and no longer have the capacity to administer your financial and legal issues, you may want to appoint a power of attorney. A power of attorney, however, is not just for when you are incapacitated. Going away on a trip overseas, or somewhere where you’ll be difficult to contact? Rather than miss important information, payments or decisions, a power of attorney can be a stand-in for you while you’re gone. You can limit the power in any way you want to. If you only want the attorney to have power over particular tasks or for a given time period, that can be specified in your attorney document.
In the case of decisions to be made when you are unable
A general power of attorney will not be eligible. For this, you would need to appoint an enduring power of attorney. Where some confusion may lie is that surrounding health and lifestyle choices. A power of attorney is limited to making decisions of legal or financial nature. To give somebody the power to make choices on your medical or lifestyle needs you will need to appoint an enduring guardian. If you have a power of attorney, an enduring guardian doesn’t have to be the same person but can be if you wish. In the event of death financial matters can no longer be decided by power of attorney. They are now the responsibility of the executor of your will. These can be the same person, however appropriate documentation must be completed for both positions. If you haven’t nominated an executor, your power of attorney doesn’t automatically assume the role.
To give somebody the power of attorney
The correct documentation needs to be prepared and registered. The form must be signed by you and the person you are giving power of attorney and must be witnessed. A solicitor can prepare the form and act as a witness. The role of the witness is to ensure that the person giving power of attorney is of sound mind. This is a requirement of appointing power of attorney or an enduring guardian. Being of sound mind means the person has full comprehension of what they are instructing, who they are giving power to and what the document means. If a person isn’t of sound mind, then a valid power of attorney can’t be allocated. It is helpful to have a solicitor as a witness to ensure ‘sound mind’ requirements are met without issue. If the person is of sound mind when signing, but are later deemed not to be of sound mind an enduring power of attorney is allowed to continue, while a general power of attorney is no longer able to make decisions for the person.
It is very important to consider the person that you give power of attorney to
Giving someone power of attorney is a huge responsibility that can have a big effect on your future. They must be somebody that you trust and that you know is capable to administer for you and would make the decisions you would. To reinforce this, it is vital to have a frank discussion with them. You need to be very clear about your wishes and even clearer that they understand them.
If you are considering giving somebody general or enduring power of attorney
it can help to discuss the process with a solicitor. Contact us at CM Lawyers to discuss it with one of our solicitors or to have documentation prepared and witnessed.