What is a Power of Attorney?
A Power of Attorney grants another person the legal authority to make important financial and legal decisions on your behalf if an accident or illness means that you do not have the capacity to make the decision yourself. The person you give the Power of Attorney to should be someone you trust.
A Power of Attorney is as important for life planning as making a Will. Many people prepare a Will but do not give the same consideration to appointing a Power of Attorney until it is too late.
Your Power of Attorney can be revoked at any time provided you have the capacity to do so.
A Power of Attorney ceases when you die. The executor named in your Will then takes over the responsibility of administering your estate.
When do I need a Power of Attorney?
A Power of Attorney enables your financial affairs to be managed in accordance with your wishes when you are unable to do so or you do not want to conduct them personally – such as when you are ill, travelling overseas or simply do not wish to be burdened with the day to day management of your financial affairs.
You can use a Power of Attorney in a variety of circumstances including:
- you can authorise your attorney to collect debts
- vote at meetings
- operate your bank account
- manage your investments
- sell your house
- carry out any other function which can be legally delegated
For example, you may be travelling overseas and want to give your attorney access to your bank accounts to pay your bills or manage your finances. Alternatively, it can be beneficial to have a Power of Attorney if you become unwell and are no longer able to manage your financial affairs.
What is the difference between a General and Enduring Power of Attorney?
A general Power of Attorney ceases once you have lost the capacity to deal with your financial affairs.
An Enduring Power of Attorney continues after you have lost capacity. This is important for everyone, but particularly for elderly people.