Power of Attorney
A power of attorney is a document where you set out who has authority to act or make decisions on your behalf. Depending on whether the decisions relate to property or your personal care and welfare, and whether the authority ceases or continues to operate if you lose mental capacity, there are different types of power of attorney.
The different types of power of attorney
The first is called a power of attorney. Under this document you can appoint someone to have the authority to act for you and sign documents on your behalf in relation to property and financial matters. This document can be prepared for a specific transaction, for example if you were overseas, or it can be a more general power to act on all property matters. This type of power of attorney ceases to have effect if you lose mental capacity.
The second type is an enduring power of attorney (EPA). They are enduring because they continue to operate if you lose mental capacity. There are two different enduring power of attorney documents.
- A property enduring power of attorney is a person or persons with authority to act on your property and financial affairs.
- A personal care and welfare attorney is a person who can make your care and medical decisions in the event that you have lost mental capacity.
Decisions to make when appointing an EPA
- Do you want to have successor or back up attorneys?
- In relation to your property attorney(s), do you want to have multiple people acting at the same time, and if so, do you want them to act jointly on all decisions or can they act individually from one another?
- Do you want your attorneys to consult with anyone before making a decision?
- Do you want to give someone the right to request documents from your attorney about how they are carrying out their role?
- When do you want your property attorney to commence? For example, once you sign the document or only once you have lost mental capacity?
- Do you want your property attorneys to be able to make gifts or benefit another person using your money?
Choosing an enduring power of attorney
There are many considerations when deciding who will be the right choice for you and your family. The foremost consideration is choosing someone that you trust to act on your behalf, as your attorney will have the authority and ability to make important decisions on your behalf. If you do not want to appoint a family member or friend, you can appoint a professional trustee, such as a lawyer or professional body, to be your attorney. However if you do appoint a professional attorney, you will need to consider the fees they may charge for acting on your behalf.
If you are appointing more than one person to act jointly, you need to consider their relationship and whether they will be able to work together. Depending on your family, you may want certain people to be consulted prior to your attorney making a decision, so that they do not feel left out. You may want to allow certain people to have the right to request information from your attorneys about how they are carrying out their role, if you would like other family members or friends to feel included or to check on what your attorney is doing.
You should also consider the health and age of your attorneys, as you may want to appoint successor attorneys who will take on the role in the event your first attorney is unable to act.
How to appoint a power of attorney
A lawyer/solicitor or public trustee can help to set up your power of attorney documents for you or you might like to start the process by downloading the free power of attorney forms online. Note that even if you download an online form or fill in your EPA online, the document and signatures will still need to be witnessed by a solicitor or public trust at a fee. Find a wills and estates lawyer in your area.
Who should you choose as your power of attorney?
The most important consideration when choosing your power of attorney is having people you know you can trust to act faithfully on your behalf to carry out your wishes, in your best interests. Power of attorney are usually:
- Family members;
- Close friends;
- Your lawyer; or
- A trustee from a professional body e.g. Public Trust.