Why have a power of attorney?
A will is a document that tells people how your estate is to be managed and divided if you die. A Power of attorney deals with what happens when you are still alive but cannot deal with your affairs. There are many circumstances where this may arise. Here are some examples:
- You need to be out of the country for a while but an important document needs to be signed on your behalf while you are away.
- You are suffering an impairment due to a medical condition and are incapable of signing important documents such as bank withdrawals which are needed for paying your ongoing bills.
- A specific document such as a mortgage may have a very specific power of attorney in it which covers a specific commercial event.
- Your financial planner may advise your relatives, while you are suffering a disability that certain asset transfers or nominations need to be made on your behalf that will save you substantial money in tax. While you are under a disability you may not be able to sign these forms yourself but your attorney will be able to.
Powers of Attorney have been a legal document that have been used for many years however in recent times people have developed more complex affairs . Many people have been encouraged to invest in assets such as superannuation and property to plan for their retirement and this means that Powers of Attorney are not just for business people and wealthy people. They are an important element of an estate plan for many people.
What is a Power ofAttorney?
A power of attorney nominates a trusted person who will be known as your attorney to sign documents and manage your financial affairs in circumstances when you are unable or incapable of handling those affairs yourself.
How do you decide upon an attorney?
You will naturally chose a person who you trust and who shares your values around issues such as money, time and communication to be your main attorney.
However, circumstances arise when people become unwilling or unable to act as your attorney. In this case you can appoint alternate attorneys who can fill this role. This will ensure that your document will have some longevity and is not required to be amended in the near future due to a change in circumstances.
Change in life circumstances
You can revoke your power of attorney by a separate document and appoint a new attorney.People change in their attitude toward you and you change in your attitude toward them at different times of life and sometimes people suffer disqualifying events.
Generally powers of attorney do not get revoked by operation of law as they do in the case of wills. Wills made before marriage are revoked by operation of law in the event of a subsequent marriage. This does not generally happen with powers of attorney.