Before we dive into the nitty-gritty of Powers of Attorney, let’s clear the air. There’s some misinformation floating around about their roles and functions, and we’re here to set the record straight. At Copeland Estates Legal we believe in transparency and we want to ensure you have the right information. In this blog, we’ll unravel the true nature and effect of Powers of Attorney – a tool that can be a game-changer in managing your finances and securing your future.
What is a NSW Power of Attorney?
A Power of Attorney is a legal document that allows you to legally appoint a substitute decision-maker to handle your legal and financial matters while you’re alive but indisposed – whether due to ill health or logistics. It’s the ultimate legal life hack to make sure your finances can still be dealt with by a person or persons you trust if you aren’t able to deal with them yourself.
Your appointed attorney steps into your ‘legal’ shoes, wielding the power to sign your legal and financial documents for you including dealing in property transactions, handling bills, dealing with your bank on your behalf and more. In NSW you can even decide when and in what circumstances your Power of Attorney kicks in.
The choices you have include:
- Make it effective immediately so you always have your trust person (your attorney) authorised to sign for you.
- Only activated if your trust person (your attorney) think you need assistance.
- Activated only if you lose the capacity to manage your finances and this is confirmed in writing by your doctor
General Powers of Attorney vs. Enduring Powers of Attorney: What the difference?
NSW General Power of Attorney
These cover your back only while you have mental capacity. If or when you no longer have mental capacity, these can no longer be used. You can choose whether you authorise your attorney to handle all or only specific financial matters, such as buying or selling property. In fact in our humble experience there seems to be a direct correlation between conveyancing matters and overseas holidays!
They’re a handy option for those that are planning a trip to sip coconut cocktails on the beach and need paperwork dealt with back home.
NSW Enduring Power of Attorney
Now, Enduring Powers of Attorney take it up a notch. They’re the superheroes of the Power of Attorney world, staying effective even if you lose mental capacity. As you can’t sign legal documents when you are mentally incapable, this document is crucial to have in place to safeguard your future and loved ones.
Trust is always key when it comes to appointing substitute decision-makers; if you’ve got someone you trust to make the right decisions they can be a good choice for these documents.
Accountability matters: Why have a Power of Attorney?
When you appoint someone through a Power of Attorney, you’re not just handing over the reins blindly. Your attorney is accountable under law, and if they misuse their powers, criminal penalties await. Unlike adding a signatory to your bank account which allows carte blanch to operate your bank account, an attorney appointed under your Power of Attorney is legally required to only act in your best interests and in line with the terms of your document.
Life changes and Powers of Attorney: What you need to know
- Marriage and divorce won’t cancel Powers of Attorney. If your relationship status changes, consider revisiting your choices.
- As long as you’re mentally sound, you can revoke or create a new Power of Attorney. A new one doesn’t cancel the old – you’ll need a Revocation of Power of Attorney for that.
- Registering your Power of Attorney with the NSW LRS can unlock its potential for property transactions. However, it’s still able to be used for other matters without being registered.
Timing matters: Why you should get your Power of Attorney in place now
Here’s the golden rule – get a Power of Attorney sorted before you need it. Once you lose capacity, legal documents are off-limits, and no one else can sign on your behalf. It’s a popular myth that your spouse or children automatically have legal authority to make legal and financial decisions for you or sign the legal paperwork on your behalf if you are incapacitated. This is NOT the case. Your loved ones need to be appointed as an attorney under your Power of Attorney to have the legal right to do this. Once you get to a certain maturity your treating doctor may ask if you have a Power of Attorney or Enduring Guardianship document. This is because if you need a Power of Attorney and don’t have one, your family may not be able to make decisions on your behalf: they may not be able to withdraw monies to pay your bills, they may not be able to arrange or pay for in home care, respite care or residence at an aged care facility. This leaves your family in a position where their only alternative is to apply to NCAT NSW Civil and Administrative Tribunal for Financial Management Orders.
At Copeland Estates Legal we’re not just lawyers; we’re your partners in protecting your legacy for a worry-free future.
If you are looking to get your estate planning in order and want to chat it over with a lawyer why not book in a free 10 minute chat here or send us an email here or at [email protected].
We’ll look after you.
