A Power of Attorney is a formal deed governed by the Power of Attorney Act 2006 (ACT). A Power of Attorney is a binding legal document which gives one or more people the legal authority to make decisions, and do certain things on your behalf, but it does not remove your rights to do these things. It is a common misconception that the Attorney needs to be an “Attorney” (i.e. a lawyer) but he or she does not. The Attorney can be anyone over the age of 18, however it is important that you trust them implicitly.
Types of Powers of Attorney
A Power of Attorney does not have to give blanket control to do anything or everything. There are different options available and limitations that you can place on each. They can be broadly categorised into the following types:
- General Power of Attorney
- Enduring Power of Attorney
General Power of Attorney
A General Power of Attorney is usually created for a specific purpose, with either specific or general powers given to the Attorney.
Examples of where a General Power of Attorney is useful are as follows:
(a) if you are going overseas for work or on holiday and are in the middle of a business or property transaction that requires your signature; or
(b) if you are in hospital for an extended period of time and finding it difficult to manage your affairs.
Some of the powers you may confer on your Attorney are:
(a) execution of documents on your behalf generally;
(b) general dealings with banks, insurance companies etc. on your behalf; and
(c) any other specific powers, for example execution of a specified document on a one off basis.
General Powers of Attorney are only valid while a person has legal capacity, and are immediately revoked upon loss of legal capacity. Legal capacity means the ability to fully understand the nature and effect of the document you are signing.
Enduring Power of Attorney
An Enduring Power of Attorney remains valid even if a person loses legal capacity as a result of disability or illness. However, you can revoke it at any time, providing you have legal capacity.
When creating an Enduring Power of Attorney, you give your chosen Attorney or Attorneys the capacity to make decisions in relation to certain aspects of your affairs. You choose whether or not to give your Attorney of Attorneys power to make decisions in relation to your:
- finances;
- property; and/or
- health
You can choose, one, two or all of these aspects and can also choose whether the power takes effect immediately or only upon loss of legal capacity.
Why have one?
A Power of Attorney can be a safety net that enables your affairs to be dealt with by someone you trust in situations where you can’t effectively manage them yourself. You might want to think about creating a Power of Attorney in circumstances such as the following:
(a) where your health is failing;
(b) if you are going in for major surgery;
(c) if you are going overseas; or
(d) as a general precaution.
If you intend to put an Enduring Power of Attorney in place, you must do so while you still have full legal capacity.
Our estate planning lawyers have the knowledge to guide you and the skills to reflect your intentions clearly in creating your General Power of Attorney or Enduring Power of Attorney.