Szabo & Associates News & Updates
Explained: An Enduring Power of Attorney in NSW
A General Power of Attorney, or POA for short, gives one person the authority to handle another's financial matters when they are unable, or do not want, to do so themselves. They are usually used for specific purposes. So, for example, a person with mobility issues who is unable to travel to the bank may grant a General Power of Attorney in favour of a younger family member who they trust, to do this on their behalf.
A Power of Attorney will only continue to be valid however, while the granter of the Power has capacity - the ability to make decisions for themselves and understand the effects of those decisions. Therefore, when a person loses capacity – perhaps through an illness like dementia or an accident – and cannot make decisions nor understand the consequences of them, the Attorney cannot continue to act on the person's behalf. When such unfortunate circumstances arise, having an Enduring Power of Attorney in place is vitally important.
Enduring Powers of Attorney
Setting up an Enduring Power of Attorney, which comes in the form of a legal document, enables a person to choose another who they trust ('The Attorney'), to manage legal and financial affairs if they lose capacity. The Attorney cannot make lifestyle, accommodation (where a person lives or who they live with) or medical decisions (what health care is received) however; the right to make such decisions lies with an Enduring Guardian. A separate document is required to do this – keep an eye out for a blog on the matter very soon.
Choosing the Right Attorney
It is important people think carefully when setting up an Enduring Power of Attorney and determining the most important person to appoint as the actual Attorney. After all, that person will become solely responsible for making legal and financial decisions on behalf of another. The individual selected must be a competent adult who is able and willing take responsibility for another person's affairs. The person to be made Attorney must be trusted to act in the best interests, and to know and carry out the wishes, of the person setting up the POA. The best way of achieving this is for the person setting up the POA to have an open and honest discussion with the would-be Attorney, explaining the decisions they may be asked to make and the respective choices that should be made. It is also advisable for the person setting up the Power to write down their wishes in relation to specific circumstances as this will help to avoid confusion and may help prevent stress and or conflict where different people have different opinions about what choices should be made. With trust being such a crucial factor, close family members as well as friends are commonly appointed Attorneys.
Certain rules must be adhered to when having an Enduring Power of Attorney setup. First, Enduring Powers of Attorney need to be appointed when the appointer has capacity and must be drafted in a specific way. Obtaining help and advice from a solicitor with relevant experience is therefore highly recommended. Further, an individual is unable to appoint enduring powers for anyone other than themselves. There is also a requirement for Enduring Powers of Attorney to be explained to the person setting up the Power by a prescribed witness - unlike with the General Power of Attorney. The witnesses can be a: solicitor; barrister; New South Wales Local Court Registrar; or a licensed conveyancer, an employee of NSW Trustee & Guardian or an employee of a Private Trustee company, who has completed an appropriate Powers of Attorney Act course.
Generally, there is no requirement for an Enduring Power of Attorney to be registered. There is an exception to the general rule however, and where an Attorney is required to handle any real estate based in New South Wales, the Power document needs to be registered with Land and Property Information Division of the NSW Department of Lands.
Enduring Powers of Attorney can be brought to an end in two ways. First, the enduring power can be revoked at any time by the person who set it up providing they are competent – i.e. have not lost capacity. To revoke an Enduring Power, the appointer must write to their Attorney notifying them that their appointment is being terminated. Doing so maybe appropriate where the relationship between the person who established the Enduring Power and the Attorney has changed, meaning the Attorney has become unsuitable for the role. Secondly, an Enduring Power of Attorney becomes void when the person who established it passes away.
Losing Capacity without an Enduring POA
If a person loses capacity and thus the ability to make decisions for themselves without having an Enduring Power of Attorney in place, then under the law, no one - not even their spouse or partner - gains the right to manage their affairs. To rectify this, family members, usually close ones, can apply to the Civil and Administrative Tribunal of New South Wales for the right to manage the financial affairs of the person who has lost capacity. The Civil and Administrative Tribunal will then determine whether the applicant is fit to do so. Where the applicant is not deemed fit, the Tribunal can appoint a Trustee and Guardian to handle the affairs of the person without capacity. Setting up an Enduring Power of Attorney at an early stage avoids this stressful and often unwanted step.
Want Help Setting Up An Enduring Power of Attorney in NSW?
Having an Enduring Power of Attorney can go a long way in helping you and your family members should you lose capacity. For help and advice setting up either a General or Enduring Power of Attorney, please contact Szabo & Associates Solicitors today by calling 02 9281 5088. Alternatively, you can book a consultation by clicking here.