Power of Attorney for Families – what a General Power of Attorney can do for you
Todays Modern Families can be biological or logical.
You might be partnered, officially de facto, officially married, perhaps parenting with kids, parenting solo with kids, part of a blended family, parenting and partnered with kids, (yours, theirs, and ours), co-parents, foster parents, adoptive parents, or even adoptive parents of kids with additional needs (just beautiful!).
You might even be super involved 'Guncles' or Aunties, or perhaps something a little more complicated. When it comes to modern families today there's really no such thing as average and that includes our level of responsibility and drive to protect and provide.
- Families are in the business of growing healthy future adults. Much of what we teach is caught, rather than taught, and we’re all a role model for somebody.
- How we live our lives — with random disregard for the risks and realities of life and business, or with a healthy respect balancing security and spontaneity — will undoubtedly influence our partners and leave an impact upon our families and how they decide to live their lives in the future.
So having a backup plan, just in case, is part of living a bigger life and wanting more for your partner, your kids and whoever is family to you.
The most used estate planning document for Couples and Families is a Power of Attorney.
What does a Power of Attorney do?
A Power of Attorney is a legal document that allows you to appoint someone (called your Attorney) to make decisions on your behalf (and usually manage your financial and legal affairs) when you are unable to do so.
- Any decision made by your Attorney will have the same legally binding effect as if you had made that decision yourself.
- A general Power of Attorney document gives your Attorney the ability to make important legal decisions on your behalf and it's therefore wise to choose your Attorney carefully.
Caution: Not to be confused with an Enduring Power of Attorney document, (EPOA) a general Power of Attorney (POA) deals with your assets, for example, real estate and bank accounts. Your POA does not deal with your health, medical treatment or lifestyle. This is managed under a separate document usually called an Enduring Power of Attorney (or Enduring Power of Guardianship).
When do you need to set up your Power of Attorney?
Probably yesterday.
One of the common mistakes we see people make is leaving foundational legal decisions, until the last minute. There are some legal documents you need to have already in place before you need to use them, otherwise, it can be too late to put them in place.
- In the same way, you get your driver's license issued before you hire a rental car at the airport, in the same way, you need to get your home insurance in place before the bush fire surrounds your house, and in the same way, you need to get you Crisis Insurance policy in place before you are diagnosed with a terminal illness, a General Power of Attorney needs to be documented, signed and in place before you need to use it.
How long does a Power of Attorney last?
You get to decide.
A general power attorney can take effect for a specified amount of time. For example, you may plan to spend 6 months overseas and would like someone to manage your financial affairs for you while you are away.
Alternatively, you can set a period of time linked to a specific event – like moving house for you when you are undergoing surgery or medical treatments where you have reduced mobility.
A general Power of Attorney can also remain active until you revoke it. For example, many elderly clients transfer the day-to-day management of their financial affairs to an adult child when they're physically ill or unable to manage their affairs due to reduced personal mobility (ie: they have surrendered their driver's licence, cannot attend the bank due to mobility issues, have deteriorating eyesight and struggle with documentation —even though they are still mentally capable.
What decisions can be made using a Power of Attorney?
Virtually anything that you can legally do, your appointed Attorney can do on your behalf.
This means your Attorney can do the following:
- deposit and withdraw money from your bank accounts on your behalf
- enter into and negotiate legal agreements on your behalf (such as real-estate leases, renewing licenses or other contracts) and related
- buy or sell shares & investments on your behalf
- buy or sell real estate on your behalf
This can include both short term, fixed term or ongoing management on your behalf. For example, for an immediate short-term need, such as an extended overseas trip, a fixed term event such as completing the sale of a property, or moving house interstate, or a long-term need to plan for a frail aged person, someone with a disability or perhaps a complex illness with invasive symptom management like dialysis or chemotherapy.
What does a Power of Attorney not do?
There are two exceptions to the available authority granted under a Power of Attorney:
- The Power of Attorney will not be effective in delegating to another person any responsibility you have as a Trustee. This includes where you are an Executor of a deceased estate. Separate laws relate to a delegation of authority as a Trustee.
- The Power of Attorney equally will not be effective in delegating your authority in your capacity as a Director of a company. Delegation of authority by a Director is governed by the Corporations Act.
Frequently Asked Questions about Powers of Attorney for Families
Does my nominated Attorney have to accept their role as Attorney?
Can I have more than one Attorney?
Where you wish to appoint more than one Attorney, you need to make a decision as to whether the Attorneys are to act jointly or jointly and severally.
- Jointly means that the Attorneys must all sign documents or act together on your behalf.
- Severally means that either or any of the Attorneys may act on your behalf in signing documents and so on.
- Where reference is made to Jointly and/or Severally, then both options apply.
You can also make provision for a Substitute Attorney or Attorneys in case the first appointed Attorney or Attorneys are unable to be your Attorney due to their own sickness, disability, death or unwillingness to act. If you appoint more than two Attorneys, then you may decide whether you wish for a majority rules type approach; for example, two out of the three Attorneys must act together.
How we can help
If you're in a relationship or part of a family, setting up your Power of Attorney is the first step in helping you get your modern estate planning documents sorted. If you're in a vulnerable business structure, it forms an important key legal document to safeguard your business interests too.
Contact us for a confidential chat about your needs.