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Speaking for myself

Making a power of attorney

What is a power of attorney?

A power of attorney is a legal document that you can use to appoint someone (your attorney) to act on your behalf - that is, to be your decision maker - in property and financial matters. You are called the principal or donor.

An attorney in this sense does not necessarily mean a lawyer or solicitor. Your attorney may be a family member, close friend, a solicitor or the NSW Trustee and Guardian. An attorney can’t make health or lifestyle decisions for you, only financial ones.

A general power of attorney is usually given for a specific period of time, for example, if you plan to travel overseas or are going to hospital. It stops operating if you lose the ability to make your own decisions (lose capacity).

An enduring power of attorney will continue even after you have lost capacity. This is the one you should use if you want to give someone power to make decisions once you can no longer do so.

Who can make a power of attorney?

Anyone over 18 can make a power of attorney as long as they understand what they are signing (that is, if they have mental capacity). A person with a mild intellectual disability or in the early stages of dementia may still be able to make a power of attorney if they have mental capacity at the time the document is made. If their capacity is in doubt, an assessment of their understanding needs to be made by an appropriate person, such as a doctor, psychologist or psychiatrist.

Won’t I lose my rights if I make a power of attorney?

No. As long as you are able to make your own decisions you still have authority to deal with your property and money. You can make it clear in the document that you only want your attorney’s power to start if and when you become incapable of making your own decisions.

If I make a power of attorney will it affect my will?

No. A power of attorney only operates while you are alive. It is automatically cancelled when you die.

What will happen if I haven’t made an enduring power of attorney?

If you lose capacity and haven’t made an enduring power of attorney there will be nobody with legal authority to manage or make decisions about your property and finances. Your family may have difficulty accessing your bank account to pay your bills. If your home needs to be sold (for example, to pay for you to move into residential aged care) only someone with your power of attorney will be able to do this.

A relative or another person may need to apply to the Guardianship Division of the NSW Civil and Administrative Tribunal (NCAT) or the Supreme Court to have a financial manager appointed for you. This may not be the person you would have chosen.

Case study: Georgio

At 52, Georgio was diagnosed with a heart condition which required open heart surgery. His doctor said that he would be unable to work for six weeks. His doctor also pointed out the risks involved in surgery.

As a sub-contractor for a construction company, Georgio had some complicated financial arrangements and was worried about the possibility of not being able to attend to them himself following surgery. Georgio had already made a will but decided that he needed to plan carefully in the event he was not able to make decisions about his finances after the surgery, or if something else happened and he lost his capacity to make decisions for himself. Georgio and his wife Madeleine went to a solicitor. Because they both felt it was time to make some long term plans, Giorgio gave Madeleine an enduring power of attorney.

Georgio recovered fully after a few months, and the enduring power of attorney remained untouched in his solicitor’s file. However, if things had not gone well and Madeleine had been faced with major business decisions, the document would have enabled her to take control without needing to apply to the Guardianship Division of NCAT or the Supreme Court at a time when she already had many responsibilities.

How do I make an enduring power of attorney?

A solicitor or the NSW Trustee and Guardian can prepare a power of attorney for you. Or you can use a form available from NCAT, Land and Property Information, legal stationers (listed in the Yellow Pages under ‘Legal Stationery’) or some newsagents.

The form for an enduring power of attorney is different to the one for a general power of attorney.

The form must be witnessed by a barrister, solicitor, registrar of the Local Court, an employee of the NSW Trustee and Guardian or trustee company, a qualified overseas lawyer or a licenced conveyancer. That person must also sign a certificate stating that they have explained the document to you and that you understood its effect.

The person you appoint as your attorney must also sign the form to accept their appointment before they can act as attorney.

Who should I appoint as my attorney?

Because your attorney will be able to do anything you could do with your property and money, you should choose someone who is suitable, willing to take on this role, and who you trust to make decisions for you in your best interests.

You can appoint more than one person as your attorney. However, you should choose people who are able to work together.

If you appoint more than one person you can appoint them so they can only make decisions together (jointly) or individually (severally). You should talk to a lawyer about what would be best in your situation.

If you do not know anyone you consider to be suitable you can appoint the NSW Trustee and Guardian as your attorney. They will charge a set fee to draw up a Power of Attorney unless you are on a full Centrelink Age Pension. If they do have to act as your attorney they will charge for their services.

Case study: Jean

Jean was in her early 80s and lived alone. She had two daughters. Carol lived in the next suburb and Sandra lived overseas. Jean didn’t need any help, but noticed she was becoming increasingly forgetful. When she discussed this with her doctor, he arranged for tests and confirmed that her memory was getting worse. Although she wanted to stay at home for as long as possible, Jean realised that one day she might need to move to some type of supported accommodation and so her house might need to be sold.

Jean wanted to be sure that if she ever became incapable of making her own financial arrangements, they would be in the hands of someone she trusted and who could do the work involved. She told both her daughters of her intention to appoint Carol as her decision-maker under her enduring power of attorney.

Sandra was upset that Carol had the power of attorney, fearing that this represented some kind of favouritism or that she might inherit less of the estate as a result. Jean was able to assure Sandra that it was more practical to appoint Carol, and Carol assured Jean that she would not seek to disadvantage Sandra in any way.

What powers can I give my attorney?

You can decide how much power or authority to give your attorney. You can give your attorney very wide powers to do anything you could do with your money or property, or you might want to limit your attorney’s power to do something specific, such as paying certain kinds of bills or selling your house.

What are your attorney’s responsibilities?

Your attorney must:

  • avoid conflicts between their interests and yours
  • maintain proper records of their dealings with your money and property
  • keep your money and property separate from theirs
  • act in your best interest at all times
  • not pay or give gifts or benefits to themselves or other people using your finances, unless you specifically say they can (although they can claim out-of-pocket expenses directly connected with carrying out the power of attorney duties).

What can be done if my attorney is not looking after my affairs properly?

While you still have capacity you can cancel (revoke) your power of attorney. If you have lost capacity and your attorney acts dishonestly or improperly or is not acting in your best interests, it may be possible for the Guardianship Division of NCAT or the Supreme Court to do something about it.

Someone else who is concerned about your welfare would need to apply to NCAT or Court to have the attorney’s actions looked at and possibly have them removed as your attorney. This can be time-consuming and stressful and Supreme Court action is expensive, which is why it is so important to choose the right person in the first place.

Can I change my mind?

You can cancel your power of attorney at any time as long as you have mental capacity. You must let your attorney know that you are cancelling the power of attorney. It is best to do this in writing so that your intention is clear to everyone. If the attorney is not told, they can continue to deal with your finances and property and you will be liable for any actions they take.

Does my power of attorney need to be registered?

Your power of attorney must be registered with the Land and Property Management Authority (LPMA) if your attorney needs to deal with your real estate (eg sell, mortgage or lease it). A registration fee will be charged.

You or your attorney should take the completed form to the Land and Property Management Authority at 1 Prince Albert Road, Sydney. They will keep an official copy of your power of attorney. The original will be stamped with a registration number, and returned to you. Your attorney should use this number when signing documents on your behalf.

Even if you don’t need to register your power of attorney you may still choose to do so. The advantages are that it will then be:

  • on record as a public document
  • safe from loss or destruction
  • more easily accepted as evidence that your attorney has authority to deal with your property and financial affairs.

If your enduring power of attorney is registered but you later revoke (cancel) it, you can use a ‘Revocation of power of attorney’ form to do this, available from Land and Property Information. You should also register the revocation.

Can an enduring power of attorney made outside NSW be used in NSW?

Each state and territory has its own laws on enduring powers of attorney. If an enduring power of attorney was made in another Australian state or territory then, provided it complies with the legal requirements of that state or territory, it will be recognised in NSW. However you should get legal advice about this.

Powers of attorney which are made overseas can’t be used in NSW.

Can a NSW enduring power of attorney be used outside NSW?

If you want your attorney to be able to use your NSW enduring power of attorney in another state or territory or overseas, you should make enquiries about what the requirements are in that state, territory or country. They all have different laws about powers of attorney.