A Power of Attorney is a document that allows another
person to legally manage your financial and legal affairs. A Power
of Attorney can be General or Enduring.
More commonly used is the Enduring Power of Attorney that many
people set up at a time in their lives when they are managing their
own affairs quite well. However, understanding that sometimes
health can fail, they chose to set up a Power of Attorney on their
own terms and nominate that it will commence operating at a later
date (usually when their treating doctor determines they are no
longer capable of managing their own affairs).
What can a Power of Attorney do?
An attorney can undertake any actions that you can- they can pay
your bills, liaise with government departments and withdraw money
from your accounts, in addition to open and close bank accounts,
enter into lease and hire purchase agreements and even sell your
house. So it is vital that you trust the person you appoint as your
attorney. It can be helpful to have more than one to promote
accountability. An attorney must avoid placing themselves in a
position where their interests are in conflict with yours. A common
example is where there is an adult child still living at home with
shared expenses who then manages your money.
An attorney must act in accordance with your directions. If you
have set up a Power of Attorney and you now wish to change or stop
it, you must formally revoke this Power, provided you have the
capacity to make that decision.
If your attorney wants to deal with your land, the Power of
Attorney must be registered with the LPI (formerly known as the
Land Titles Office). If a registered Power of Attorney is revoked,
that revocation should also be lodged with the LPI.
What is a General Power of Attorney?
A General Power of Attorney is convenient to set up for a
specific purpose. For example, if you have an overseas trip planned
and while away you will have legal documents that require
attention, perhaps you have bought a house and settlement is while
you are away, or you have purchased an unregistered block of land
that might register during your trip. Allowing a trusted family
member or friend to sign documents on your behalf means the
transaction will continue in your absence. A General Power of
Attorney will automatically cease if you lose your mental
Why appoint a Power of Attorney?
A Power of Attorney is a vital document to help a person
maintain independence in their later years, should they actually
need it. It allows them to retain control of their affairs by
stating who and on what terms their financial and legal affairs may
be managed. A Power of Attorney should be appointed in advance of a
situation where you may find yourself lacking the mental capacity
to make their own decisions.
We often receive enquiries from people who have a parent that
has developed dementia, alzheimer's diseases or are otherwise
not able to manage their own affairs. The children state that they
have been able to help their parents in the past but now an
organisation, often a bank, is requiring a formal Power of
Attorney. The difficulty with this situation is, when a person
lacks the mental capacity to manage these transactions, they almost
always lack the mental capacity to instruct a solicitor to prepare
a Power of Attorney and our hands are tied.
When a person has lost their capacity and either needs a Power
of Attorney made, or, needs to revoke a Power of Attorney, they or
concerned people need to approach the Guardianship Tribunal for a
decision to be made on that person's behalf.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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