Power of Attorney – Top 5 Points to Consider16-May-2023 Property Estates By Simone Green
Things don’t always go as planned in life. Whether you’re looking for some certainty in the way decisions will be made for you in the future or are just taking some proactive steps to manage your estate, it is important that you are informed about the different estate planning instruments to give effect to your wishes.
Solicitor Sara Afaghi has written an article for you that focuses on the Power of Attorney as an estate planning instrument.
1. What type of Power of Attorney do I need?
A Power of Attorney instrument is a document that allows the ‘Principal’ to authorise another person, being the ‘Attorney’ to make financial and legal decisions for the Principal.
There are two types of Power of Attorney documents namely:
- A General Power of Attorney is relevant if you wish for someone to make decisions on your behalf whilst you still have capacity but may be unavailable for an extended period of time, such as while you are on holidays.
- An Enduring Power of Attorney is used as an estate planning instrument where your attorney can make decisions on your behalf in the event that you lose capacity – whether this is temporary or permanent incapacity. It can only be made whilst you still have capacity and for this reason, it is crucial that you make the Power of Attorney whilst there is no question as to your mental capacity.
The type of Power of Attorney that is most appropriate for you will depend on your specific circumstances and the outcome you wish to achieve.
2. Who should I appoint as my Attorney?
Generally, a trusted family member or friend is appointed as the Attorney. The Attorney must be over the age of 18 and have capacity. The Attorney should be someone that you trust and have confidence will make decisions that are in your best interests.
When deciding who is appropriate to act as your Attorney, consider:
- Is the Attorney someone that is equipped to make the types of decisions needed for your specific circumstances (considering the nature and complexity of decisions that may need to be made);
- Is the Attorney experienced in managing situations similar to yours;
- Is the Attorney someone that you trust to make decisions in your best interest?
3. What Powers Should I Give my Attorney?
As the Principal, you may elect to provide the Attorney with additional optional powers, such as the power to give reasonable gifts and confer benefits on third parties. Alternatively, you
can limit the decision-making power of the Attorney to limit it to certain tasks (such as selling your house), or such that restrictions are imposed on the manner in which the task is
The extent of the powers provided to the Attorney, and whether any restrictions are placed on the power will ultimately be a decision for you and depend on the nature of the decisions that are being made and the extent of power you wish to provide the Attorney.
4. What Other Estate Planning Instruments are Relevant?
A robust estate plan will usually contain the following key instruments in addition to the
Power of Attorney instrument:
- Deed of Enduring Guardian
- Advance Directive
Each of these instruments will serve a different function and if drafted correctly, will work together in unison so that decisions will be made in your best interests and in accordance with your wishes in the event you die or become incapacitated.
When considering any estate planning, it is important that you understand the function of each of these instruments and whether they are required for your circumstances. If you want to know more, click here for a brief summary.
5. Who Can Draft a Power of Attorney Instrument?
It is important that you understand the nature and effect of the Enduring Power of Attorney instrument and have confidence that it is drafted in a way that accurately reflects your wishes.
At Streeterlaw, our specialist estate planning team take great care to ensure we understand your unique circumstances and have the expertise to give you comfort around any uncertainty you may have.
Give us a call on (02) 8197 0105 and take the next step in your estate planning journey today – or click here to contact us
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