What is a Power of Attorney?

A Power of Attorney is a document given by one person (the principal or donor) to another person (the attorney) which enables the attorney to act on behalf of the principal. The power can be to act generally on the principal’s behalf or to act in specified circumstances and could include the right of the attorney to sue and be sued in the place of the principal. Any mentally sound person who is capable of understanding the effect of the document may give a Power of Attorney.

What is the purpose of a Power of Attorney?

For ensuring essential matters are attended to by a trusted person at the appropriate time. This could be when the principal is overseas for a long period, or travelling in Australia but out of contact.Giving Power of Attorney could be advisable if the principal is in hospital, in a nursing home, has limited physical mobility, or is deteriorating mentally though illness or age.

What formalities are there?

A deed of appointment must be signed and witnessed, and if it is to be used for property transactions it should also be registered at the NSW Land Registry Services. Additional formalities are required if the power is intended to continue in effect after the principal becomes mentally incapable.

Although there is no legal requirement to do so, it is advisable to have a solicitor prepare a Deed of Appointment. This is particularly important if the Power of Attorney is to be limited to specific powers in which case the wording will be critical. A Power of Attorney becomes effective when you desire it. Under the new forms you are able to nominate that the Power of Attorney does not become effective until a doctor has issued a report to confirm that you no longer have capacity.

Can a Power of Attorney be limited?

You can limit a Power of Attorney in three main ways:

• A Power of Attorney can be general, entitling the attorney to act in any matter on behalf of the principal, or it can be specific, allowing the attorney to act only in the matter spelt out in the Deed.
• A Power of Attorney can be limited to a particular state, for example, New South Wales only.
• A Power of Attorney can be limited to a particular period of time, for example one year, or until a specified event has occurred, eg the sale of a property.

What if I don’t give it until I really can’t manage at all?

You run the risk, if you wait too long, that you will be incapable of granting the power. If you become mentally incapacitated your affairs very possibly will then pass to the NSW Trustee & Guardian – that is, you affairs will be managed by a government official.

“If you become mentally incapacitated, your affairs very possibly will then be taken over by the Guardianship Tribunal – that is, your affairs will be managed by a government official.”

Can I still deal with my own affairs?

Yes, as long as you are mentally capable. Granting the power does not stop you from dealing with matters yourself, but the attorney will still be able to deal with your affairs at the same time unless you tell him or her not to deal with a particular matter.

Can I have more than one attorney?

There is no legal limit to the number of attorneys though it is not advisable to give powers to too many people – they may not coordinate with each other. You can appoint people jointly (all must sign documents) or separately (each may sign), and can appoint trustee companies, alone or jointly with individuals.

Can I revoke the power if I change my mind?

Yes, provided you are still mentally capable. Revoking the Power of Attorney should be done in a formal way, preferably in writing to avoid any argument. The revocation does not take effect until you have given notice of the revocation to the attorney. If the Power of Attorney was registered at the NSW Land Registry Servcies, a written revocation of the power should also be registered.

When does the Power of Attorney stop otherwise?

• When the attorney notifies the principal that he or she will no longer act under the power.
• When either the principal or the attorney dies or becomes bankrupt.
• When the principal demonstrates to the attorney by actions that he or she considers the power to be at an end.
• Where the Power of Attorney was given in a Deed and was stated to be irrevocable it is just that, though the Supreme Court may end the power under certain circumstances.

Should every person give a Power of Attorney?

Since the advent of the Privacy Act, it is important for each and every one of us to have a nominated person to make legal enquiries on our behalf. If you are planning to be away from home for an extended period or if you are approaching an age at which you might become incapable of handling your own affairs, a Power of Attorney appointment is a necessity.

In this day and age it is important that spouses protect each other in the event one is struck seriously ill or is incapacitated by an accident. Also parents could give power to an adult child or to children jointly, or to a trusted family friend.

Knowing you have an attorney capable of dealing with your affairs when you are absent or incapacitated can give you peace of mind.

A solicitor is the best adviser to ensure your requirements are covered and a proper balance is struck between convenience and caution