A power of attorney is a legal document that authorises another person to act on your behalf and handle your affairs.

This person is known as your ‘attorney’.

They are usually a trusted friend or relative – someone who can sign documents, pay bills, access bank accounts, talk with utility companies, etc,, on your behalf.

As a result of the high level of power that you’re vesting in them, you won’t want to allow just anyone to act on your behalf.

The power of attorney is a convenient method of allowing someone to handle your affairs and this can be for a number of reasons, like:

• you go on an overseas trip
• you take an extended vacation away from the normal running of your affairs
• you reach an age where you need assistance

Knowing that you have an attorney that is capable of dealing with your affairs will give you peace of mind – for those times that you are unable to attend to them yourself.

Having somebody take care of your business dealings can be real nice. Just think about it. You don’t have to go to your business meeting in say Uganda to sign documents. You can just send a representative with the power of attorney and that person can sign the contract for you. But for all its benefits, the power of attorney can also be a bane when not done the right way and when put into the wrong hands.

What is a power of attorney?

Before we can discuss the advantages and disadvantages of using a power of attorney, you must first understand that exactly is the concept. Power of attorney is a document that gives people the authority to act on another person’s behalf for a specific period and matter depending on what is stated on the paper. This means that another person can sign documents for you and make decisions on your behalf. The person who gives the power of attorney is often called the principal while the grantee is called the proxy or sometimes the agent.

Use of the Power of Attorney

Power of attorney is used within corporations where executives have tightly packed schedules that require them to travel in three different countries in a span of three days. This can either be physically impossible or at best, physically tiring. Thus, the power of attorney serves to lift the burden from the executives, allowing them to become more productive. Company lawyers are often sent or subordinates who are trusted to make decisions and sign the contract.

Another advantage of a power of attorney is its importance in making healthcare decisions. A power of attorney can also be given to people, authorizing them to refuse or allow medical care to the principal if they become incapable of making decisions for themselves. This also includes making the decision to pull the plug in cases when only a machine is keeping the principal alive.

Some people are also given the power of attorney to take care of a principal’s financial portfolio. Although this is well and good especially when you are so busy and want to put the business of investing your money to a professional. But money can turn people dishonest. And here lies the one disadvantage of a power of attorney— putting your trust into one person.

On the downside

Remember that in giving a power of attorney to someone, you are basically telling people who read the document or the contract that you are giving the agent full rights to sign for you and agree or refuse something on your behalf. If the agent turns out to be corrupt, then any transactions that he or she handles is at risk for fraud. This is why although this is a very convenient thing to do; only a few ever use it. Giving that kind of power to one person can be very risky even if you plan to monitor all the transactions made under your name.

If you want to authorize anyone or any organization to properly handle your affairs while you are unable to do so or while you are unavailable, you should get a power of attorney.

It is a document that summarizes and proves your agreement to give your appointed person (the agent or attorney-in-fact) the authority to act on your behalf.

There are four main types of power of attorney that you could choose from.These types may be functional and useful depending on your need and requirements.

They are:

1. General Power of Attorney
2. Special Power of Attorney
3. Healthcare Power of Attorney
4. Durable Power of Attorney

A general power of attorney is a document that gives your agent a broad authority in handling your affairs. This authority usually includes handling of your banking transactions, purchasing and disposing properties, settling claims, exercising stock rights, entering into deals or contracts, filing tax returns, and buying life insurance. It is usually used to enable your appointed agent the power to handle your important transactions within a specified period when you are practically unable to do them personally.

The special power of attorney provides your agent specific powers. You would decide on those specifics. Unlike the general power of attorney, the special power attorney does not give the agent a broad range of coverage. It only specifies how he/she should act. The document should specify which activities the agent should do. Transactions that are not included in the provisions could not in any way be managed or handled by the person.

The healthcare power of attorney designates the agent as a person who should make proper healthcare decisions for you if you get mentally incompetent or unconscious. If you would not be able to make logical decisions due to health reasons, the agent would be authorized to do so in your behalf. However, take note that the healthcare power of attorney is not the same as a living will, which is a document to express your personal wishes in case you would need life-sustaining procedures.

The durable power of attorney could be a general, healthcare or special power of attorney containing specific durability provisions. In case you suddenly get mentally incapacitated while any of the three kinds of power of attorney is in effect, the durability provision of the document would allow the agent to stay as your attorney-in-fact indefinitely. In the durable power of attorney, you are acknowledging the possibility that you could become mentally or totally incompetent because of any accident or illness. For this power of attorney to take effect there has to be a genuine certification from a doctor to prove the illness.

In every power of attorney you would get into, it is always important to make sure you are choosing and agent or an attorney-in-fact who is very trustworthy and reliable. He/She should be able to uphold only your best interest when doing transactions and making decisions on your behalf. You may fully entrust into him/her the authority and power to handle and manage your money or assets.

Here’s a short video (based on US terminology, but pretty close!) about three types of power of attorney.

Article courtesy of The Age.

A financial enduring power of attorney is a legal document. By signing it, you authorise a person to make financial and legal decisions for you.

The main difference between this and the general power of attorney is that a financial enduring power of attorney is valid even if you become mentally incompetent.

This type of power of attorney is especially useful when you are planning for the future. For example, if you are unconscious in hospital as a result of a car accident, the person you have appointed under an enduring financial power of attorney can make financial decisions for you even though you are unconscious.

What can my attorney do?

Your attorney can make any legal and financial decision that you can make. So if you only want to appoint an attorney for a short time, perhaps you should use the general power of attorney, rather than a financial enduring power of attorney.

Multiple attorneys

Where it is permitted under State/Territory law, if you do this you may be able to decide whether you want your attorneys to make decisions ‘jointly’ or ‘jointly and severally’. ‘Jointly’ means that both attorneys have to agree with the decision they make. ‘Jointly and severally’ means that either attorney can make a decision by themselves.

There are no set rules to say what is the best choice, it depends on your circumstances. For example:

* appointing attorneys to make decisions jointly and severally could be useful if one of your attorneys travels a lot; or
* if you want two people to make decisions for you, and you don’t fully trust the judgment of one of them, then you can appoint them to make decisions jointly.

How long does it last?

This type of power of attorney will last until:

* you cancel it (you must be mentally competent to do this);
* you die;
* you become bankrupt; or
* it is canceled by an appropriate Court/Tribunal.

How do I cancel it?

You can cancel an enduring power of attorney at any time, as long as you are mentally competent. Check whether there are formal requirements in your State/Territory, particularly if there are registration requirements. And don’t forget to tell your banks or other agencies that have dealt with the attorney.

The appointment of a power of attorney allows someone else to make decisions on your behalf. To appoint a Power of Attorney you need to be able to understand the implications and consequences of what you are doing. If you do not have the capacity to understand this, the appointment will not be legally valid.

For downloadable fact sheets and forms related to powers of attorney and enduring powers of attorney as well as the full suite of publications from the Office of the Public Advocate, please go to the Office’s website.

There are four types of Powers of Attorney:

General Power of Attorney

This is where you appoint someone, usually for a specific period of time, to make financial or legal decisions for you. If you appoint a General Power of Attorney and then lose legal capacity at a later stage the appointment will no longer be valid and the person you have appointed will no longer be able to make decisions on your behalf.

Enduring Power of Attorney (Financial)

This is where you appoint someone to make financial or legal decisions for you in the event of you losing, at some time in the future, the capacity to make those decisions for yourself

Enduring Power of Attorney (Medical Treatment)

This is where you appoint someone to make medical treatment decisions for you in the event of you losing, at some time on the future, the capacity to make those decisions yourself

Enduring Power of Guardianship

This is where you appoint someone to make lifestyle decisions for you, such as where you will live, in the event of your losing, at some time in the future, the capacity to make those decisions yourself.

Deciding Who to Appoint

You need to make this decision for yourself. You should try to appoint someone who you have grounds for believing is trustworthy and who both knows you well enough, and is objective enough, to make the decisions that are best for you.

With a General Power of Attorney and an Enduring Power of Attorney (Financial) you can appoint joint decision makers and stipulate, if you wish, that both of them have to agree for their decisions to be valid.

Appointing an Attorney or Guardian

You need to fill out the appropriate form and give it to the person you have appointed and keep a copy for yourself. The forms are available from Victoria Legal Aid and the Office of the Public Advocate. The signing of some of the forms will need to be witnessed.

Revoking the Appointment

You can revoke the appointment by telling the attorney or guardian that their power is withdrawn, and by destroying the document and any copies.

Contacts

Office of the Public Advocate
5/436 Lonsdale St
Melbourne VIC 3000
Tel: 03 9603 9500
Email: publicadvocate@justice.vic.gov.au

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Acknowledgements:

Article is copyright, supplied and endorsed by the Victorian Government.

NSW Enduring Power of Attorney

An attorney appointed under an enduring power of attorney can make financial decisions on your behalf, for example selling your house or operating your bank account.

The NSW legislation governing enduring powers of attorney is the Powers of Attorney Act 2003.

Other states and territories of Australia have their own legislation governing enduring powers of attorney. The Powers of Attorney Act 2003 came into force in February 2004. It made some important changes to the law about powers of attorney, particularly enduring powers of attorney.

Reviewing Enduring Powers of Attorney

The Guardianship Tribunal has the power to review enduring powers of attorney under the provisions of the Powers of Attorney Act 2003 . The Tribunal can review an enduring power of attorney if it considers the request for a review is in the best interests of the person who made the enduring power of attorney.

If it is satisfied of the need to do so, the Tribunal can vary or revoke the enduring power of attorney. The Tribunal has the power to remove an attorney from office or appoint a substitute attorney. It can reinstate an enduring power of attorney that has lapsed because the attorney is no longer able to act. It can also require an attorney to provide accounts and information for audit and require an appointed attorney to submit a financial management plan.

The Tribunal has the power to declare whether the person did or did not have the mental capacity to make a valid enduring power of attorney. The Tribunal can declare an enduring power of attorney to be invalid, in whole or in part.

The Tribunal also has the power to declare that the person lacked capacity at or during a specified time or lacks capacity for the time being.

For more information

For further information about how to make an enduring power of attorney, read the brochure Planning Ahead…Enduring Power of Attorney.

For further information about reviewing enduring powers of attorney, read the brochure Review of Enduring Powers of Attorney: Information for Parties.

An Appointment of Enduring Power of Attorney form and an Application to Review Enduring Power of Attorney form are available for download.

To speak to someone about enduring powers of attorney either contact the Guardianship Tribunal or contact a solicitor.

Acknowledgements:

This article proudly acknowledged and supplied by the NSW Government.

Most complaints to the Adult Guardian are about financial abuse by attorneys under an enduring power of attorney. The Adult Guardian may also investigate allegations of inappropriate personal decision making by attorneys, such as denying contact with other family members.

If there are reasonable grounds to believe that the attorney is not acting competently (for example, neglecting their duties or there is abuse or risk that requires immediate intervention) the Adult Guardian can suspend the attorney for financial or personal matters for up to three months.

The Adult Guardian can also apply to the Guardianship and Administration Tribunal on the adult’s behalf for the appointment of:

• an administrator (for financial matters) or
• a guardian (for personal matters and health care).

What if there is no attorney?

In most cases, anyone with an interest can apply to the tribunal for appointment of an administrator or guardian where there is evidence of:

• inappropriate decision-making
• abuse
• neglect
• exploitation of an adult who does not have an attorney.

If there is insufficient evidence of abuse, but strong grounds for concern about inappropriate decision making, the Adult Guardian may conduct an investigation.

Concerns about physical and sexual abuse

Complaints about an adult with impaired capacity being physically or sexually assaulted should be made directly to police as soon as possible.

The Adult Guardian may accept a referral about this type of abuse if it is alleged the adult remains at risk of abuse or exploitation while police investigate.

The Adult Guardian’s investigation would aim to determine what protection measures might be required and consider matters such as:

• the appropriateness of a guardianship order
• the need to apply for a warrant to remove the adult from their place of residence
• whether a domestic violence order or other action is needed to prevent the abuse.

This investigation would not duplicate the police investigation. It would not seek to identify whether a crime had been committed or prove who was responsible.

This article proudly recognised by the Qld State Government.