People plan for the future in many different ways. One way to plan ahead is by making a Financial Power of Attorney.
Financial Power of Attorney is a legal document that you make that lets you appoint someone, known as your 'attorney', to make financial and personal decisions on your behalf if you can no longer make them yourself.
You can decide whether your attorney can make all of your financial and legal decisions, like buying or selling property, or managing your business. Or your agent can have limited power, like paying bills and taking money from your account to do some shopping. The power given to your agent can be as wide or as narrow as you choose.
You can also make a Financial Power of Attorney temporarily, like for a hospital stay or a trip overseas. Or you can appoint an Enduring Power of Attorney so that your agent’s power will continue when you can no longer make decisions for yourself.
Appointing an Attorney under Power is a decision you make today to protect yourself in the future. Everyone over the age of 18 should have a Financial Power of Attorney in place so that their wishes are respected. Contact Rose Lawyers to get your Power of Attorney documents.
Choosing your Financial Power of Attorney
When choosing someone to be your Attorney, you need to pick someone you trust. This might be a family member, a close friend, a colleague, or someone else who's reliable. It's important to understand that your Attorney can do anything with your money that you can do. This includes spending your money in a way that you might not have done.
If your affairs are managed in a way that is inappropriate, like if they were to sell the property you live in to treat themselves to an overseas holiday, there will be legal consequences. That said, it's far better to avoid this than to manage it once it has happened. That's why it is important to pick someone you really trust who:
- Knows your wishes regarding your personal values
- Understands what you want to do financially, including with investments and property
- Has your best interests at heart and understands your personal care directive
- Makes good decisions about how and where you want to live
- Understands the type of care you want, including the level of care you want to receive.
What does an attorney under a Financial Power of Attorney do?
When you appoint someone under a Financial Power of Attorney, you give them the power to manage your personal and financial affairs. A Financial Power of Attorney is made when you are well and healthy. If you don't have this document in place, and you have a serious accident or become sick, it might be too late. But by planning ahead, you will have a financial attorney there to step in and help you to manage your affairs.
Your agent has the power to make decisions for you about:
- Your finances, including real estate transactions
- Any trade or business that you manage
- Your mortgage, rates, tax, and insurance
- Bank transactions
- Your personal affairs
- Your lifestyle, including daily living decisions like your diet and how you dress
- Who you live with
- Your access to support services
Why should you get legal advice when getting Power of Attorney?
The person you appoint as Financial Power of Attorney will be able to control your finances – subject to any limits you put in place. A lawyer can help you to set these limits, and can make sure that your Power of Attorney covers everything that you want it to. A lawyer can make sure that you think about every area that might be important for control. Making your Financial Power of Attorney with a lawyer is also a way of making sure that it is accurate and valid.
- By having a lawyer draft your documents, you can be sure that banks and other organisations will accept your Power of Attorney.
- While you can make a Financial Power of Attorney using a kit, you run the risk of it being invalid, which will cause big problems if you do need to rely on it.
What happens if you do not have a Financial Power of Attorney in place?
If you do not have a Financial Power of Attorney in place and you have an accident or are otherwise not able to manage your affairs, an 'interested party' will have to get permission to act on your behalf. This permission comes from the Victorian Civil and Administrative Tribunal (VCAT). There are some drawbacks to this, namely:
- VCAT can take time to set a hearing date when you might need approval fairly quickly
- Anyone over 18 (who has the capacity) can apply to VCAT for an "Order of Administration or Guardianship" if you don’t have a Power of Attorney in place, including people like your neighbour or ex-brother-in-law.
- In theory, someone without your best interests at heart could apply and get approved to manage your affairs.
Get your affairs in order now for peace of mind
Don’t wait until it’s too late; organise your Financial Power of Attorney now and give yourself the security of knowing that your wishes will be respected.
For help with your Power of Attorney, call us on 03 9878 5222 for a free consultation.