From what Power of Attorney means, to appointing someone, to the difference between Power of Attorney and Enduring Power of Attorney.
What is a Power of Attorney?
The role of a Power of Attorney is to help you manage your finances, property and other legal or lifestyle matters if you can’t manage them yourself.
The role is formalised in a legal document called a Power of Attorney. While there are templates out there guiding you on what goes into a Power of Attorney, you can include precise instructions on what your Power of Attorney can and can’t do for you.
The benefit of having a Power of Attorney
By appointing a Power of Attorney, depending on what powers you give, you would have representation if you fall ill, have an accident, or are otherwise unable (or unwilling) to manage your own affairs at any time throughout your life.
What does it mean for your banking?
It depends on the type of Power of Attorney you have appointed, and the instructions (if any) set out in the Power of Attorney document. They could have as much or as little access and control of your banking as you allow.
What happens if you don’t have POA?
If you don't have or don’t want a Power of Attorney, you can alternatively choose to add a signatory to your account. However a signatory to your account is more limited in what they can do.
Is it the same as Enduring Power of Attorney?
The main difference is that an Enduring Power of Attorney can still make decisions on your behalf if you were to lose mental capacity – whereas a general Power of Attorney cannot.
Eligibility and other considerations
Anyone can be a Power of Attorney – as long as they’re 18 or over, are not bankrupt, and are deemed to have ‘normal’ mental capacity. This means they understand the consequences of the decisions they make.
Generally, it’s someone you trust unreservedly to have your best interests at heart. Often, it’s a spouse or family member, friend, accountant, or lawyer.
The important thing to remember is that both you and your Power of Attorney understand the general nature of the decisions you make, and that you make the decisions freely.
How to appoint a Power of Attorney?
The process can depend on where you live – it’s managed at a state level. Find out more from the relevant agency in your state or territory.
When does it end?
General Power of Attorney
A General Power of Attorney can end in any of the following circumstances;
- It’s cancelled
- The Principal dies or becomes what’s deemed to be mentally incompetent
- The Attorney dies or becomes what’s deemed to be mentally incompetent
- The Attorney resigns as Attorney
- The Attorney becomes bankrupt (only in some states)
- The expiry date in the document has passed
A General Power of Attorney can be cancelled in the following ways, providing the Principal is what’s deemed to be mentally competent.
- Being torn up
- The Principal telling the Attorney that it has been cancelled
- By completing a revocation of Power of Attorney form (only in some States)