Elder
6. Making a Power of Attorney
Authors: Staff Legal Eagle
Firm / Chambers:
Last updated: 22 Jul 2015
- Under a power of attorney you formally give another person or a trustee organisation the legal right to manage your assets and finances on your behalf in the event that you cannot do so yourself.
- A power of attorney can only deal with property and financial matters.
- A person appointed under a power of attorney can lawfully exercise all the powers that you would normally have. This includes:
- entering into contracts on your behalf;
- buying and selling real estate;
- buying and selling shares; and
- making investments.
- By making a power of attorney you do not lose control over your financial affairs. The person appointed as the power of attorney manages your affairs according to your instructions. The person making the power of attorney is called the donor.
- The power can be revoked at any time and it automatically ceases when you die.
- There are two types of power of attorney under Australian law.
- An ordinary power of attorney is used short term situations such as where you want to go overseas. Your attorney can manage your finances and pay your bills while you are overseas. It will remain valid only until you have capacity to self-manage your affairs such as when you return from being away.
- An enduring power of attorney is different to a basic power of attorney in that it continues after you have lost capacity to deal with your financial affairs.
- This is particularly important for elderly persons whose health may deteriorate unexpectedly.
- Establishing the power of attorney before your capacity diminishes is a safe idea as it ensures that someone you trust will be able to manage your affairs no matter what happens to you.
- Capacity may be of concern if the lawyer is aware or believes a person may be mentally incapacitated and particularly if the person is in the hospital, aged care facility or a nursing home. However lawyers are experienced at establishing capacity and will make every effort to give effect to your wishes if it is legally appropriate to do so.
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