Perhaps you offered to deal with a seemingly simple bureaucratic matter on behalf of a friend or family member, only to discover you have no authority and cannot do a thing. Everyone, regardless of age, needs a Power of Attorney.
This article from YOURLifeChoices magazine outlines why a Power of Attorney is so important, what the different types are and what could happen if you don’t have one. Remember this is a state issue, so terminology and details differ from state to state.
Think you don’t need a Power of Attorney? Here are a few good reasons to use this simple safeguard.
Whether far from home in a remote jungle or unexpectedly incapacitated in hospital, you could regret not appointing someone you trust as your Power of Attorney. For instance, if you have an extended hospital stay, bills will still need to be paid. Or while you are on that three-month Italian sojourn, there could be myriad impossible-to-anticipate administrative and financial details requiring your signature and which no one else can help you with unless they have been granted Power of Attorney. Or perhaps your parents are overwhelmed by call centres, being put on hold and having to remember endless passwords just to ask a simple question about financial or household concerns. As they age, it could make life easier for all if you can represent them and sign on their behalf. You may think a Power of Attorney is only necessary if a person is totally incapacitated, but even if you want to be able to help your parents with something as simple as a telephone account or withdrawing cash it is vital to have been granted Power of Attorney. Don’t assume the beneficiaries of a will have the power to act in such matters – they don’t.
What is a Power of Attorney?
A Power of Attorney is a document which means that the person to whom it is granted becomes virtually indistinguishable from the person granting the Power of Attorney, in so far as the institutions which require transactions to stand up in court are concerned. More than one Power of Attorney can be appointed if it’s appropriate. But decide if they will be able to act only together (jointly) or together and separately (jointly and severally). If one person could be away when a signature is needed, it might be worth them being able to act separately.
Are there different types?
There are four main types of Power of Attorney and each state and territory has slightly different uses and powers for the different types. See the MORE box at the end of this article for where to find specific information for your state or territory. 1. General Power of Attorney is for use when you can’t sign anything because you are hiking in Thailand or because you are in hospital. You may wish to consider having an expiry date for a General Power of Attorney if you are going overseas.
2. Enduring Power of Attorney is more powerful. It comes into use when someone has no means of looking after themselves and documentation has to be dealt with in regards to their long-term circumstances, often to do with living arrangements. A General Power of Attorney would not continue to be effective should the person lose mental capacity but an Enduring Power of Attorney would. Check your state’s laws in regards to the specific boundaries and definition of this type of Power of Attorney as there can be crossover with Enduring Guardianship (see below).
3. Medical Power of Attorney is known under different names in different states: in the ACT, Enduring Power of Attorney; in Victoria, Enduring Power of Attorney (Medical Treatment); in SA, Medical Power of Attorney; in NSW and Tasmania, Enduring Guardianship; in WA, Guardianship Orders; and in the Northern Territory, Medical Enduring Power of Attorney. It’s about appointing someone to make life and death decisions, such as whether to continue with life support. You might want to appoint someone in this role if you have no living relative, as hospitals will usually make such decisions in collaboration with the family.
4. Enduring Guardianship is important if someone can no longer make decisions about where to live, whom to live with, what health care to receive, and daily issues like diet and dress. In some states you will need an Enduring Guardian rather than an Enduring Power of Attorney to decide on living arrangements.
What does it cost?
You can buy a Power of Attorney from any legal stationer for about $5, but it can be a complicated process to fill it out, requiring correct numbering, layout etc. It’s worth paying a lawyer to cross every ‘t’ and dot every ‘i’. The minimum legal cost would be $200, more if you have to be visited in hospital. So get it done now and save everyone the hassle later.
Why you should get one now
There will be someone you trust to look after you or your parents’ personal and financial affairs in a manner of which you or they would approve. Not having a Power of Attorney can create enormous logistical problems for children or friends and can hold back important processes. It can help save legal costs should problems arise with financial situations and matters end up in court. Most of all, if you or someone you love hasn’t appointed a Power of Attorney, no one has that most precious commodity – peace of mind.
The information provided is of a general nature, and should not be construed as legal advice. The information is provided solely on the basis that readers will be responsible for making their own assessment of it. Please contact AussieLegal for further information:
Ph 1300 728 200
Here are the relevant government websites for each state. Just type ‘power of attorney’ into the search window of the web page.
New South Wales