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Phone: (03) 6332 9353

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Powers of Attorney Explained

A Power of Attorney is a document authorising someone to represent or act on behalf of another person in business and financial matters. The powers granted under a Power of Attorney can be general or specific in nature.

Types of Powers of Attorney

There are various types of Powers of Attorney, the most common being:

1. Ordinary Power of Attorney - allows your Attorney to do anything that you can legally do in relation to financial and property decisions. However, this type of Power of Attorney will come to an end if you lose your mental or physical capacity to manage your own affairs.

2. Enduring Power of Attorney - gives your Attorney the same powers as an ordinary Power of Attorney, however it remains in force even if you lose your mental or physical capacity to manage your own affairs.

3. Specific Power of Attorney - as the name suggests this Power of Attorney gives your Attorney a specific power in relation to your business or financial affairs.

A Power of Attorney cannot be used to appoint an Attorney to handle medical issues. The appointment of an Enduring Guardian is required for this.

General Issues

Some common terms used in Powers of Attorney are:

  • Donor - the person who grants the Power of Attorney
  • Attorney - the person given power to act for the Donor

Both ordinary and enduring Powers of Attorney will end on death. When someone dies, their Will, or if they die without a Will the Administration and Probate Act, will apply. 

Having a Power of Attorney in place does not take away the Donor's ability to act for themselves. The Donor can still manage thier affairs if they have the ability to do so.

An Attorney must act honestly and in the best interests of the Donor. It is a criminal offence if the Attorney does not act appropriately.

Mental Capacity

In order to appoint an Attorney, the Donor must understand what they are doing. That is they must have the required mental capacity to appoint an Attorney. If someone does not have the required mental capacity to appoint an Attorney then an application can be made to the Guardianship Board for the appointment of an 'Administrator'. An Administrator has similar powers of an Attorney and can be a family member, trusted friend, The Public Trustee or a Trustee Company. 

Registration

A Power of Attorney is effective when it has been registered at the Titles Office. A Power of Attorney that is not registered is of no effect. This means that an Attorney cannot act on behalf of the Donor until such time as the registration of the Power of Attorney has been finalised by the Titles Office.

Granting a trusted relative or friend a Power of Attorney is useful if you are not well, having trouble managing your financial affairs or travelling overseas.

It is strongly recommended that you instruct a solicitor to prepare your Power of Attorney to ensure that your appointed Attorney has the legal capacity to manage your business and financial matters. 

To discuss how we can assist you in preparing and registering a Power of Attorney on your behalf, please contact us on 03 6332 9353.

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