What is a Power of Attorney and do I need one?
A power of attorney is a legal document where you appoint someone to make decisions for you. The person that you appoint will be called your “attorney” and can act in relation to property and financial matters.
The attorney cannot make health or lifestyle decisions for you – if you wish to appoint someone to make those decisions, you will need to prepare an Enduring Guardianship.
There are two types of powers of attorney, which are:
- A general power of attorney. If the person who gave the power of attorney loses their mental capacity, the document cannot be used. This type of power of attorney is usually given for a specific reason, such as you will be overseas and need someone in NSW to sign documents while you are not here.
- An enduring power of attorney. This document allows your attorney to make decisions for you, even if you lose mental capacity.
We recommend that people prepare an enduring power of attorney at the same time as preparing their wills. This is so that if you ever do become unable to make decisions for yourself due to a physical or mental incapacity, your attorney can step in and act. It is important that you appoint someone that you trust to be your attorney – usually a family member or a good friend. Your attorney will be able to do anything you could do, so you need to appoint someone you trust to make decisions in your best interests.
What happens if I don’t have a power of attorney?
If you are unable to make decisions for yourself because of a physical or mental incapacity, there is no one who can legally step into your shoes to sign documents for you. If you are lucky, you will have joint bank accounts that can be accessed, but otherwise, there is no quick solution. Someone such as a family member will need to apply to the Court or Tribunal to have a financial manager appointed for you.