Enduring Power of AttorneSome Day You Will Need It
ESTATE PLANNING INFORMATION SHEET
Putting someone else in charge of your affairs needs careful consideration. Becoming incapacitated without an Enduring Power of Attorney can cause a lot of heartbreak. What should you do?
If you were unable to handle your own affairs you would want someone you knew and trusted to be in charge of them. Usually this happens when you are overseas for some time and can’t attend to your affairs yourself. But, if you were debilitated by a disease such as a stroke or from a car accident, and you couldn’t look after your own things what would happen?
When you die your Will takes effect but if you are still alive, your spouse may not be able to have access to funds or be able to make the decision to sell a property if needed.
For example, let’s say your house was owned in your name and you had a major stroke and were left incapacitated. Your spouse would not be able to sell the house when it became too much for them, would not be able to access your bank accounts to pay bills and would have to make an application to the Guardianship Division of the NSW Civil and Administrative Tribunal, for the right to any of the things that would be theirs if you had died and your Will was in effect.
What is an Enduring Power of Attorney?
It is a document given by one person to another to act on behalf of that person. The powers can be general or only for specified circumstances. A Power of Attorney can also operate for a defined time or until a certain event has occurred, such as if you are going overseas and you appoint an attorney to handle the sale of a property.
You will need to prepare a Power of Attorney and have it signed and witnessed. If you are preparing a Power of Attorney that will be used for property transactions it should also be registered at NSW Land Registry Services. Although you can prepare the Power of Attorney, it is advisable to appoint a Solicitor to do this for you. This is particularly important if the Power of Attorney is to be limited to specific powers because the wording could be critical.
An attorney has the same powers as you have over your property and assets and could conceivably sell your property from under you, so it is important to make sure that the Power of Attorney covers exactly what you intend it to do.
Granting a Power of Attorney does not mean that you can’t still handle your own affairs, provided you are mentally capable. Appointing more than one attorney can also cause problems as they may not co-ordinate their activities.
You can also appoint two or more people to act jointly, meaning that they must both sign documents.
Powers of Attorney can be revoked by you at any time provided you are still mentally capable. To do this you must revoke the Power in writing to the attorney.
A Power of Attorney is not for everyone, however, if you are planning to be away from home for an extended time or if you are approaching an age where you might become incapable of handling your own affairs, it could be necessary and advisable.
What Could Happen if you don’t have an Enduring Power of Attorney!
Spouses should give each other power of attorney in case one is struck seriously ill or incapacitated. Parents could also give one to an adult child, children or a trusted family member.
As an example, Bill & Louise had prepared their Wills and thought they had taken care of everything. Their Wills said that if either one of them died their assets would revert to the survivor. –
Without warning Bill suffered a stroke and was only kept alive by modern medicine. He was, however, left physically and mentally incapacitated. If Bill had died his Will would have come into effect but as he was still alive Louise had no access to his money and could not take steps to sell the home and move closer to the hospital. She needed money to live on and to pay the bills but due to the situation could not gain access to it.
Louise had to ask the Supreme Court for an order giving * the authority to deal with Bill’s property. The bills were eventually paid and the house sold so she could be closer to her husband, however, she had to go begging to a Government authority every time she required money or wanted to do anything that affected Bill’s assets.
This was humiliating and very stressful for her and could have been averted if they had prepared a Power of Attorney at the same time as they prepared their Wills.
Knowing you have an attorney who will deal with your affairs when you are absent or infirmed can give you and your spouse security and peace of mind. We are happy to advise you about preparing a Power of Attorney for you.
P.S. It is wise to make your Power of Attorney at the same time you are preparing your Will. It is also more economical doing both at the same time.