Ever stopped to consider what might happen should you become mentally or physically incapacitated? Who would make trustworthy decisions on your behalf, sign the relevant documentation or act in your best financial interests? This is where a Power of Attorney can be an invaluable document that could save you and your family a whole lot of heartache.

Importantly, a Power of Attorney isn’t just about you being injured or unwell. It can also be applied as a one-off, for very specific circumstances or for any transaction and document signing that may be required when you’re not available.

So, let’s look a little further into the Power of Attorney, and when and where it is used.

What is a Power of Attorney?

A Power of Attorney is an official document that grants another person, people or a trustee organisation permission to act on your behalf.

Their role can be as simple as signing a one-off document while you’re on holidays or as complex as managing your entire affairs in the instance you become physically or mentally incapacitated.

The Power of Attorney document establishes the extent of matters that your representative is allowed to deal with and can include conditions, such as the type of transactions they can make or the duration of time they are permitted to act on your behalf.

The different types

There are three common types of Power of Attorney documents:

GeneralA General Power of Attorney allows your representative to do anything that you (the principal) are lawfully able to do.

However, if you become mentally incapacitated, this power ceases. Often that means that a General Power of Attorney is not appropriate if you want a representative to step up and make decisions when it comes to your legal or financial affairs in the event that you become extremely unwell or injured.

It may be appropriate if you wish to have assistance dealing with paperwork, finances, property and legal matters.

LimitedA Limited Power of Attorney involves placing restrictions on when someone else can act on your behalf, and under what circumstances.

This type of power of attorney might be used if you are on holidays and seeking to buy a property during that time. It could give your representative the right to enter into a contract and negotiate on your behalf.

In addition to specifying what types of transactions the representative (attorney) can undertake, the document might also specify a timeframe for expiry after a set period.

EnduringEnduring is the one most people think of when a Power of Attorney is mentioned. This allows your representative to make financial or legal decisions on your behalf in the event you are incapacitated.

In NSW, an Enduring Power of Attorney allows your appointed representative to handle items like receiving income, paying bills, taxation and contractual issues, investment or property management.

If you need someone to make decisions relating to where you live, who you live with, what health care you receive, and daily issues like diet and dress, you will need to appoint an Enduring Guardian.

Should you get better, the Enduring Power of Attorney automatically ceases, and should you pass away, the provisions of your Will take effect.

Selecting your representative

Above all, your representative (attorney) should be someone you trust implicitly to act in your interests. They must also be over 18 and have a general awareness of their legal responsibilities in the role, and the state of your relevant affairs.

In most cases, people give their spouse or another family member Power of Attorney, but a trusted friend or even trustee organisation can also be appointed.

The final word

Whether you are 18 or 81, it is worth considering having a Power of Attorney in place, enabling someone to act in your interests if you can’t.

Remember, you can be specific about what that attorney is able to do, and outline the circumstances under which they can act, ensuring you really remain in control of your affairs no matter what happens in the future.

About T & T Lawyers

T & T Lawyers is a dynamic and progressive Sydney-based firm offering sound advice, effective strategies and the best possible outcomes in all areas of law including Power of Attorney.

You can learn more about our services here, or contact us directly for further advice.