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Have you got power of attorney? - Big Sky Financial Planning
Have You Got Power of Attorney? | ||||||||||||||||||||||||||||||||
| In recent weeks there has been some media attention around families encountering difficulties as a result of a parent handing control of their finances to one or more of their adult children. The sensationalist coverage inferred that entrusting decision-making to a family member was a risky practice. For most families however, the reality is quite the opposite where, particularly when it is properly documented and planned. | ||||||||||||||||||||||||||||||||
What is a Power of Attorney? | ||||||||||||||||||||||||||||||||
| A Power of Attorney is a legal document that authorises someone to act on your behalf when you are no longer capable of making decisions for yourself. If you find yourself in a position where you have lost this capability, either permanently or temporarily, due to an illness or an accident, it’s really important that you have a POA in place. The laws relating to POAs aren’t the same across Australia, so you’ll need to check what applies in your State. For example, in Victoria there are four recognised POAs, covering different types of decisions: | ||||||||||||||||||||||||||||||||
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| If you live in Victoria you can have any or all of these POAs and assign different ones to different people if that is the best option for you. | ||||||||||||||||||||||||||||||||
Why have a POA? | ||||||||||||||||||||||||||||||||
| While we don’t like to think about our health failing, the reality for many people is that general aging leads to a reduced capacity for reasoning, or for understanding, retaining, believing, evaluating or weighing up relevant information. With this sobering thought in mind, it’s vital that you organise a POA as soon as possible and definitely before you lose any mental capacity. If you reach a point where you can’t fully understand the documentation for your POA (as verified by an authorised witness) you can’t actually have one! In addition, if you don’t have a POA in place it can be a time-consuming and costly exercise for family members who find they need to make application to the courts for one. . | ||||||||||||||||||||||||||||||||
Key decisions to make now | ||||||||||||||||||||||||||||||||
| When it comes to organising Powers of Attorney, you have two key decisions: 1. Who you should appoint as your attorney and decision-maker 2. What type or types of POA you should choose Clearly these decisions will vary from person to person and from family to family. A trusted and capable family member is a common choice for most people. However you need to be confident in their ability to look after your affairs and should have second thoughts about appointing someone you know to be experiencing financial or other difficulties that may lead to impaired judgments on your behalf. You can appoint joint attorneys, but be sure that all parties are likely to be available when required and can be relied upon to generally agree on the issues that will affect you. Having an offspring who’s a lawyer or a doctor doesn’t necessarily mean they are automatic choices for Enduring POAs for Financial or Medical Treatment either. | ||||||||||||||||||||||||||||||||
More Information | ||||||||||||||||||||||||||||||||
| Appointing a Power of Attorney is important and should ideally be done as soon as someone becomes an adult. For more information on POAs in your State, visit one of the websites shown below, or speak to your financial adviser. | ||||||||||||||||||||||||||||||||
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