Power of Attorney Explained
Please ensure you read and understand the disclaimer before reading this article. Always consult a qualified lawyer for your legal advice.
What is a Power of Attorney and what do you need to know about getting one or signing one? How does it work? When should you have one created? What are some situations where it would be a good idea to have a power of attorney created?
There are many questions surrounding a legal power of attorney and if you are thinking of getting one or have been asked to sign one then it is important that you understand as much as you can about it.
Sometimes in our lives we face situations where we need to give someone else legal authority to act on our behalf and under certain circumstances or situations. If you are incapacitated, have an illness or something else which keeps you incapable of acting for yourself in certain situations, you may choose to appoint someone else your legal Power of Attorney which gives them the ability by law to speak for you and to sign your name to documents.
A power of attorney is a legal document that when signed and notarized will appoint one person (the attorney) to act on behalf of the other person (called the donor or principal) in relation to certain things such as property or financial affairs. A Power of Attorney can be written up to only be in effect for a certain period of time, such as while you are out of town for something or ill and in the hospital. They can also be written up for longer periods of time, such as if you give a family member Power of Attorney in case you are ever in an accident and unable to speak for yourself.
There are many different situations that could occur in life where you need to appoint a Power of Attorney. Some examples are:
- You become ill or hospitalized
- You are facing an operation
- You are traveling overseas
These are some situations where you may be unable to handle financial affairs or other decisions for yourself and you can appoint a person you trust (usually a close friend or family member) as your Power of Attorney. The power of attorney will not allow someone to make life based decisions or medical decisions for you.
For most cases, a simple power of attorney is sufficient for your needs but in some cases you may want to detail exactly what you do and do not want covered by your Power of Attorney (POA). In other situations, there may be other types of POA options for you to consider, such as an enduring power of attorney. You need to speak with a lawyer who is experienced in these types of documents and agreements to be sure yours is done correctly.
An enduring power of attorney is important if you need the person you appoint to be able to make financial decisions for you. This means that if something happens to you and you are incapacitated, you will not need to rely on the courts or legal system to determine what happens with your financial affairs.
This type of power of attorney will require different paperwork from the court system to be sure that everything is done legally and in accordance with Australia law. Before taking the steps to enact an enduring power of attorney, it is very important that you fully understand what it entails and that you choose your person carefully for this task. You want to be certain you appoint someone who you can trust for this important job. You also need to be sure the person is aware of it, why you are choosing them and what your wishes are so they are not surprised if the time comes that they need to act on the POA.
Here are some things to consider when choosing your POA:
- Who will you appoint? Will you appoint more than one person?
- What conditions and limits will be placed on your power of attorney?
- Do you understand the risks of appointing a power of attorney?
- Under what circumstances will the power of attorney be in effect?
- How and when will the power of attorney be revoked or expired?
- How do you use the power of attorney with third parties?
It’s important to choose carefully when it comes to your power of attorney, however, as your family’s financial state could be at risk if you do not choose someone properly. A different form will be required if you wish to give someone medical and life related guardianship powers.
Always speak with your lawyer about questions and concerns regarding the power of attorney and how it works. This is a very important legal decision to make and one that should not be done lightly or without a complete understanding of how it works.
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