Can an Enduring Power of Attorney change a Will?
No, a Power of Attorney or Enduring Power of Attorney does not change the provisions of a Will. A general Power of Attorney will cease to have effect if the person making the appointment loses capacity, and both general and Enduring Powers of Attorney are no longer valid after the principal dies.
A Power of Attorney is a legal document that gives a trusted person the legal authority to act for you and to make certain legally binding decisions on your behalf. This person is known as your attorney and the person making the appointment is known as the principal.
You might make a Power of Attorney:
- to relieve yourself of the day-to-day demands of financial paperwork and record-keeping
- as a safety net when travelling or to allow someone to handle your affairs in your absence
- as a safeguard so somebody can manage your financial and legal affairs should you become incapacitated (Enduring Power of Attorney)
Below are 5 top questions dealing with Powers of Attorney.
Does the Attorney need to be a lawyer?
Despite the title, your ‘attorney’ does not need to have legal qualifications. However, your attorney must be over 18 years and the person appointed should be carefully considered as you are providing them with considerable power.
An ideal attorney should:
- have integrity
- be willing to act in that capacity
- have competence in areas of relevance
- be able to act in a business-like manner
- be able to spare the time necessary for the task
- live in the locality in which they are to act
- be agreeable to respecting the confidentiality of the principal’s affairs
- be impartial and have no known conflict of interest
Are there different types of Powers of Attorney?
Yes, a General Power of Attorney which is:
- only valid while you have legal capacity
- useful if you are going away for an extended period and you do not want the authority to continue should you lose legal capacity
- usually drawn up for a specific purpose with specific or general powers.
And an Enduring Power of Attorney which:
- continues to be valid even if you lose legal capacity due to disability or illness
- may be activated when required or only upon loss of legal capacity
- allows your attorney to commence or to continue to manage your affairs even though you are unable to give lawful instructions
Is it better to have more than one attorney?
We often recommend that clients have more than one attorney, or a substitute attorney if the appointed attorney cannot act or continue to act, as it gives you more flexibility. You can appoint attorneys to act ‘jointly’ which means they must act together, or ‘severally’ which means they can act individually even if more than one is appointed.
Should I pay my attorney?
This is not necessary to give legal effect to the power and would normally only be considered if the attorney(s) is a professional.
How do I know if the person has sufficient mental capacity to make a Power of Attorney?
There is no simple formula, but in general terms they must be able to:
- understand the major consequences of a decision
- take responsibility for making that choice
- make a choice based on the risks and benefits that are important to them
If there is any doubt about capacity, it’s best to contact a doctor and ask for a written opinion. Remember, different powers require different levels of understanding. If this is done it is wise to have the document signed on the same day as you get the medical report so there can be no subsequent claim that the appointment was invalid.
Conclusion
Many do not understand the function, benefits, and potential pitfalls when considering a Power of Attorney. In case of an accident, sudden illness, planned or unexpected absence, or when you cannot manage certain matters, you may need someone to manage your financial affairs. It doesn’t matter if you are old or young, in business or not, or if you do a lot of travelling, there can be benefits in having a Power of Attorney. In all cases, it is wise to be guided by an experienced professional.
This is general information only. If you or someone you know wants more information or needs help or advice, please call 02 9150 6991 or email [email protected].