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In modern times, managing someone else's finances can be difficult. It may mean getting internet account passwords, dealing with internet banking, mortgages, investment portfolios, tax, and many other modern advancements.
This can be a great responsibility with both financial and legal implications and thus it is important that you fully consider these before taking on the role.
Research by the NSW Trustee and Guardian shows that 85 per cent of adults with ageing parents expect to be involved in decision-making for them at some point if required.
However, 71 per cent hadn't discussed with their parents how their parents' finances should be managed. Furthermore, only 22 per cent of Australians have a Power of Attorney.
You can discuss your Power of Attorney arrangements with your solicitor while you are writing your Will.
Imelda Dodds, NSW Trustee and Guardian Chief Executive, has made clear that without a Power of Attorney, relatives may have to suffer a long application process at a tribunal in order to gain the requisite permissions to manage their relatives finances.
Below is some helpful advice to keep in mind in the event that you or one of your relatives may require someone else to manage their finances.
Ordinary Power of Attorney or Enduring Power of Attorney?
An ordinary Power of Attorney is different from an Enduring Power of Attorney in that under an ordinary Power of Attorney, loss of capacity is not covered.
An ordinary Power of Attorney is useful to allow someone to carry out transactions for you while you are abroad. An enduring Power of Attorney is effective so long as the person does not have capacity to manage their own affairs.
Is my Power of Attorney Valid in all Australian States?
A Power of Attorney may not always be valid in all states. A good example can be seen from a woman who moved her ACT based parent to a nursing home close to where she lived in Victoria to find out that their Power of Attorney documents were not valid in that state.
A new Power of Attorney may need to be created if the person still has capacity, or an application can be made to the state body that deals with this to allow the Attorney to continue to act.
Who Should I Choose to be my Attorney?
You must think carefully about who you choose to be your Attorney. It is important that you can trust them and can also discuss your finances honestly with them. You must also think about the ability of the person to carry out the role, that they will pay your bills on time etc.
Furthermore, elderly abuse does occur. Some individuals may take advantage of their position as Attorney and those in the early stages of dementia can be particularly vulnerable.
You should nominate someone from a younger generation who you trust to carry out the role properly and in your best interests.
You should also review your Power of Attorney as circumstances change as it will not be invalidated by marriage or divorce.
Should I be Someone's Attorney?
If you agree to be an Attorney, this may involve a continual workload and a great deal of legal responsibility. Usually the role is unpaid. Unless specified in the Power of Attorney document, Attorneys are not allowed to take any benefits for themselves.
Once you have signed up, it can only be cancelled by the person granting an enduring Power of Attorney or the State Administrative Tribunal can cancel it.
Contact our Power of Attorney Solicitors in Sydney
If you are thinking of appointing an Attorney under a Power of Attorney document, then it is important to seek expert legal advice as quickly as possible. Contact Szabo & Associates Solicitors today and speak with one of our specialist solicitors. Call us on (02) 9281-5088 or click here to fill in our contact form.
