What is a Power of Attorney?
A Power of Attorney is a document that authorizes someone else to act on your behalf. This legal agreement is made by one person (called the “Grantor”) allowing another person (called the “Attorney”) to do things with the Grantor’s money, bank accounts, shares, real estate and other assets.
A General Power of Attorney is used in most day-to-day situations. However, an Enduring Power of Attorney is designed to be used if you become mentally or physically incapacitated. Read the section below for more details.
Is a General Power of Attorney different from an Enduring Power of Attorney?
A General Power of Attorney will not be effective if the Grantor loses mental capacity.
A General Power of Attorney is a legal document that gives the power to another person to manage the Grantor’s affairs in relation to financial matters, including property. It is helpful when you require someone else to do things on your behalf because you are either not physically able (travelling, confined to a hospital, etc.) or prefer to have them act in their capacity under your direction. It does not give an Attorney the power to make personal decisions (including medical) on behalf of the Grantor and is often for a specified period of time.
An Enduring Power of Attorney continues to operate after the Grantor has lost mental capacity.
An Enduring Power of Attorney is in the same format as a General Power of Attorney but has additional requirements, such as stating continuation of the authorization of power to the Attorney after loss of mental capacity by the Grantor, and actual acceptance by the Attorney of this power.
Click here for more information and to download an Enduring Power of Attorney.
Why would I need a Power of Attorney?
You may need someone else to do things for you if you:
- Become ill or infirm
- Are confined to hospital or bed
- Go travelling or working overseas
- Become unable to go to the bank or government offices, etc.
You can nominate someone to act on your behalf by giving them the authority with a Power of Attorney form. They will then be able to look after your financial and other affairs in accordance with your directions (and any restrictions) stated in the Power of Attorney form.
What kind of documents can be authorized using a Power of Attorney?
You can give power to another person to sign documents relating to:
- Buying and selling shares
- Executing real estate transactions
- Buying and selling cars and other assets
- Any financial document, etc.
You can also give power to another person to do anything necessary in relation to ‘acting’ on your behalf such as:
- Paying bills and collecting mail
- Opening and managing a bank account
- Managing various personal assets
- Paying taxes, etc.
How do I limit the scope of the authority I give someone under a Power of Attorney?
A Power of Attorney can be a broad and powerful document or it can be very specific and limiting to the person granted the power to act on your behalf. In other words, you can limit the power of another person to sign a single document on your behalf or you can give them an ‘open’ power to sign anything or any number of documents in order to get a particular outcome/transaction achieved or finalised.
Who can I nominate to act as my Attorney, on my behalf?
You can nominate any person over the age of 18 to act as your Attorney. You should choose someone you trust to look after your money and property. You can choose a family member, relative, friend or a professional such as a financial or legal adviser. You can also choose more than one person who may sign/act “jointly” (i.e. all sign or act together when they all agree) or to act “jointly and severally” (i.e. any one Attorney can act independently of the others).
Can multiple people act on my behalf? Do they have to act jointly or can they act singly?
You can choose one person or more than one person to act on your behalf. If you appoint more than one person to act on your behalf, you will need to indicate on your Power of Attorney form whether you want your Attorneys to act “jointly” (i.e. only when they all agree and sign any document together for it to be valid) or “jointly and severally” (i.e. any one Attorney will be able to act independently of the other Attorneys).
What do the terms Grantor and Attorney mean in the context of a Power of Attorney?
A “Grantor” is a person who makes a Power of Attorney. This Power of Attorney gives someone else, the “Attorney”, the authority to look after his/her financial affairs and assets. The “Grantor” can also be called the “Principal” or “Donor”.
The word “Attorney”, used in the term Power of Attorney form, does not mean that the person appointed has to be a solicitor or lawyer. The person appointed as ‘Attorney’ can be anyone over the age of 18 who is able to make decisions and assist the “Grantor” with financial or property affairs and could be a relative, friend, professional or adviser. But above all, the “Attorney” should be someone you trust to look after your affairs and act in your best interests.
When does a Power of Attorney start?
Your Power of Attorney can start whenever you want. You can nominate a date in the future. Alternatively, if no date is stated, the Power of Attorney commences once it is signed by you.
When does a Power of Attorney end?
A Power of Attorney can end in a number of ways:
- On a nominated end date
- Once any specified documents have been signed
- When a nominated act has been completed, or
- When a Notice of Revocation has been signed and either given it to the Attorney or, if the Power of Attorney form is registered, when you register the Notice of Revocation
The Notice of Revocation is a formal notification that you no longer want the Power of Attorney to be in effect. To be safe, you should also give a copy of the Notice of Revocation to any authority, bank or other agency (e.g. Land Titles Office) who may have received or seen your Power of Attorney form. A standard Notice of Revocation is included in our Power of Attorney package.
Important note: A Power of Attorney is only good for as long as you have the capacity and ability to handle your own affairs. As long as you have capacity, you can review the actions of your Attorney at any time. After you lose this ability, in other words, once you become incapacitated, a General Power of Attorney is no longer valid and the person you appointed loses the power to act for you.
Why would I need to revoke my Power of Attorney?
If the acts or documents that you stated in your Power of Attorney form were not completed or actioned (e.g. you came back from overseas and nothing was actioned on your behalf), we recommended that you sign and deliver a Notice of Revocation to your appointed Attorney(s). However, if you have lodged your Power of Attorney form with any authority, bank or other agency (e.g. Land Titles Office), you need to deliver the Notice of Revocation to those offices. This ensures they know you are now able to sign or complete the act yourself and no longer require another person to sign on your behalf.
Do I have to get my Power of Attorney form registered to be legally binding?
You only need to register your Power of Attorney form if your Attorney is going to deal with your real estate. For example, if you want your Attorney to sell, lease, mortgage or do anything related to your real estate assets, you need to register your Power of Attorney form with the local Land Titles Office in your State in Australia. Otherwise, you do not need to register it.
You may choose to register it for the benefits of ensuring it is on record as a public document, for safekeeping and also to be more easily accepted by the various offices and financial institutions as evidence of your intentions. However, it is not a requirement.
How do I register my Power of Attorney form?
If you want to register your Power of Attorney you need to do so at the Land Titles office in your State in Australia. Your Power of Attorney form will be stamped with a number and the original Power of Attorney form will be returned to you. This is evidence of the registration and will identify your document. Your Attorney should use this number when they sign documents on your behalf. Your Power of Attorney form will be scanned and available on public record for anyone to see, including financial institutions for evidence of your intentions.
In New South Wales, this is located at Department of Lands, Land and Property Information Division, 1 Prince Albert Road, Queens Square, Sydney NSW 2000. This office is located across the street from Hyde Park and between the Sydney Barracks and St Mary’s Cathedral. You will need to take the original and a photocopy to the office. On arrival, go first to the information desk to obtain a lodgement form to fill in before receiving a number to register your Power of Attorney. You will also have to pay the registration fee which is currently $91 (2009/2010).
Where or in which Australian States is my Power of Attorney valid?
If you want to use a New South Wales Power of Attorney outside New South Wales, you will need to check that State’s requirements. You should do this for both General Powers of Attorney and Enduring Powers of Attorney. Some Australian States have different requirements for different Powers of Attorney.
How do I sign or “execute” a Power of Attorney?
You need to sign your Power of Attorney form for it to take effect. You must do this in front of a witness. This witness can be anyone over the age of 18 who should also sign the Power of Attorney form to confirm they saw you sign the document. They do not need to read the document as they are only signing that you are the person they saw actually sign the Power of Attorney form. They should provide their residential or business contact details under their signature. The witness cannot be the Attorney.
Does a Power of Attorney form need to be witnessed?
A Power of Attorney is a powerful document that gives the authority to someone else to look after the affairs nominated. It is therefore important to ensure that you, and not another person, have signed it. To give some formality and ensure it is you signing over this power to another person, it is important that you are witnessed signing the document. The witness does not need to read or understand the document, they only need to see you sign it.
Does the Power of Attorney form need to be in writing?
Yes. It is an important and powerful document giving an authority to another person to look after things you have nominated. So the Attorney knows what they are empowered to do precisely and to ensure the safety of this power, the Power of Attorney form must be in writing.
What risks are there in having a Power of Attorney?
There are risks with having a Power of Attorney, but they can be mitigated or minimized. The more specific you are in explaining or nominating what you want your Attorney to be empowered to do on your behalf, the less chance you have of any problems. You should be very confident in the person you choose as your Attorney. You must trust this person and ensure that they understand clearly what their powers are. If they have to make any decisions, for example, on the purchase of real estate, cars or other assets where they have discretion, you need to be comfortable that they will make a decision you are happy with.
When dealing with financial institutions or businesses, you are safer to take a copy of your Power of Attorney form into the bank or business office prior to your departure or absence, so that they are clear about your intent in granting the power to your Attorney. Most institutions are familiar with Powers of Attorney but it is best to be safe, particularly where your finances are concerned. Please note, some financial institutions may have their own requirements regarding Power of Attorney forms – so it’s best to check beforehand.
Do I need to get legal advice before setting up a Power of Attorney?
No. If you understand, and are confident your Attorney understands what authorities you are giving them, then there is no need to obtain legal advice. However, if your circumstances are complex or large sums of money are involved it is recommended that you get legal advice.
What am I prevented from giving as power to another person under a Power of Attorney?
You cannot have another person perform your civil duties under a Power of Attorney. That is, you cannot ask another person to vote on your behalf, attend jury duty, take your place in a court appearance or go to jail on your behalf. In addition, you cannot permit another person to make medical decisions on your behalf, unless this is done by an Enduring Power of Attorney.