When Should You Appoint a Power of Attorney?

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Our Estate and Succession Specialist Dr Mal Stoddart examines when individuals should appoint a general Power of Attorney and recommends appointing an Enduring Power of Attorney before it is too late.


Ethel’s Story

Ethel thought she had done well when she went to a top-tier lawyer who advertised on the radio. After a consultation and at some expense, Ethel had an Enduring Power of Attorney put in place. She later lost cognition and it became an urgent requirement to sell her home so that she could go into permanent residential care.

When her surviving son came to see me with the Enduring Power of Attorney I sadly had to tell him that it was invalid. The original lawyer had appointed his late brother and him jointly. But the Powers of Attorney Act 2003 renders invalid an Enduring Power Of Attorney where an appointed attorney has died, resigned or lost cognition.

The original top-tier lawyer’s negligence put my client and his mother in a very poor place and they had no option but to apply to the Guardianship Tribunal for an appropriate order. This caused great upset and delay.


What went wrong?

A number of issues occurred with Ethel’s Enduring Power of Attorney, such as;

  • The fact that the document was rendered invalid,
  • Ethel or her guardian failed to check it regularly,
  • When an important person passed away (the brother), nobody thought to check documents that he was involved with,
  • And worst of all – Ethel used the wrong lawyer.

It is very important to ensure that your lawyer is skilled and experienced in the work you entrust to him or her.


What is the right way to appoint an Enduring Power of Attorney?

Firstly, for all your estate planning requirements you must ensure that you appoint an experienced lawyer. There is a lot of bad work out there, and you want to avoid being put in Ethel’s situation.

Secondly, when should you make a power of attorney? Before we address this question, there is a prior question and that is ‘Who should you make your power of attorney?’

The short answer is ‘just about everyone who has cognition.’ Cognition means that a person has the legal capacity to make a will, to make a power of attorney or to sign a contract. Some people might answer ‘well I don’t have any property.’ Of course, an Enduring Power of Attorney is made only to deal with your assets, property, shares, investments and borrowings. However, you do not know when you might inherit a substantial sum and then automatically you will be a person with property and should have a power of attorney put in place.

But leaving those oddities aside, the answer is, everyone with property needs a power of attorney.

When should you appoint a power of attorney? The answer is the sooner the better! Most of us think we are immortal and could put it off to another day. However, the expense the appoint a power of attorney is minimal and especially if you review all your documents including your Will, your Enduring Appointment of Guardian and similar. Most good Estate Planning firms like ours give reduced fees on a packaged basis.

Thirdly you should not put off making that power of attorney. You could be doing something as simple as walking down the street or driving your car, and then suddenly an accident can happen, putting you in a coma and rendering you unable to make any decisions for your future. Accidents always come at unexpected times and far too frequently. You cannot make that power of attorney when it’s too late.

Fourthly what can your attorney do? Your appointed attorney can do anything with your property and assets that you yourself can do. That is why you usually appoint your spouse/partner plus a number of your children as a backup power of attorney. If you do not wish to appoint your spouse or children, you could appoint a trusted friend or an extended member of your family.

Fifthly can my attorney make health decisions? While this is an important question to ask – the answer is no, as this power requires a separate document under the guardianship act 1987.

At Owen Hodge Lawyers we have a quality reputation in this area of law and our documents are individually created to meet your particular needs.

Do not delay in making an early appointment with Dr Mal Stoddart of Owen Hodge Lawyers.

Phone him on (02) 9549 07474 for a free 30-minute consultation.

Feel free to discuss with him the protections that you can put in place and raise with him our estate packaged estate planning fees.

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We are always ready to help you.