A Power of Attorney is an important document that is often overlooked. Many people understand the importance of having a Will, but the same consideration is not given to circumstances where you might be unable to manage your own financial affairs while you’re still alive.
A Power of Attorney can be useful when you:
- are absent due to extended travel;
- will be in hospital for a while;
- become unwell or sick;
- lose your mental capacity (an Enduring Power of Attorney, more info further below);
- simply wish to be free of financial duties.
Making a Power of Attorney does not mean that you will lose control over your own financial affairs, only that you will assign someone else the authority to act on your behalf according to your instructions.
Importantly, there are two types of Power of Attorneys.
General Power of Attorney
A General Power of Attorney is valid until you lose mental capacity. Once you lose mental capacity, it can no longer be used.
A General Power of Attorney can be witnessed by anyone over 18 and who is not the Attorney being appointed.
Enduring Power of Attorney
An Enduring Power of Attorney continues even after you lose mental capacity.
You can revoke an Enduring Power of Attorney at any time, as long as you have the mental capacity to do so.
An Enduring Power of Attorney can be completed and witnessed by a legal professional.
You can dictate the types of decisions that your attorney will be able to make and when this begins and/or ends. Typical start dates are the date of signing, when you’re going to be away or you can elect your Attorney to only have signing power if/when you lose mental capacity.
A Power of Attorney does not need to be registered unless dealing with real estate you own in NSW. In this case, the document must be registered with the NSW Department of Lands.
A Power of Attorney is only valid while you are alive.
It’s important to note that a Power of Attorney can only deal with financial matters. If you wish for someone else to manage decisions related to your health and lifestyle, an Enduring Guardianship will need to be made.
For more information, contact the NSW Trustee & Guardian or seek legal advice.
What Can Align Financial Do For You? Visit our homepage to learn more about our service. If you would like to speak to us about your financial circumstance, please feel free to give us a call on 02 9913 9995. We are located in Narrabeen on the Northern Beaches of Sydney.
Disclaimer: This post has been prepared for general information purposes only. It is not specific advice to any particular person. You should consult an authorised Align Financial adviser before making financial decisions. Align Financial | Financial Planner Northern Beaches | Servicing North Narrabeen, Narrabeen, Mona Vale, Elanora Heights, Newport, Avalon, Palm Beach | Enquire with us online