What is Power Of Attorney?
A Power of Attorney (POA) is a legal document which gives a person (donee or attorney) the power to act (in some circumstances) on behalf of the author (the donor) whilst the donor still has their mental capacity.
What does it do?
A POA may be used for a variety of reasons where responsibility for decision making can legally be given to someone else including:
- Property matters (buying, renting, or selling, transferring land or collecting income)
- Financial matters (accessing a bank account on your behalf, investing your money or paying your bills)
The TellThem4Me® survey conducted in January 2021 revealed that just 21% of respondents have a POA or Enduring POA and a further 2% of respondents didn’t know what a POA or Enduring POA were. Interestingly, the survey revealed that 90% of respondents have someone whom they would trust to carry out their wishes.
What about decisions regarding my health care?
Depending upon where you live in the world, a Power of Attorney does not necessarily cover your wishes regarding your health care.
Your wishes regarding your health care may appear in a Living Will, Advanced Health Care Directives and other legally binding documents and can include information regarding your daily routine, medical care and treatment, moving into assisted accommodation and life sustaining treatment.
You would need to check country and state specific requirements regarding the execution of your health wishes should you become incapacitated.
When can a Power of Attorney not be used?
You cannot use a POA for making a Will, swearing (or affirming) an affidavit or situations where responsibility for decision making cannot legally be given to someone else.
Are there different names given to Power of Attorney and Enduring Power of Attorney?
Yes, this depends on where you live in the world, but you will find different names, meanings, and rules around the creation of these documents and appointment of your Attorney(s).
It can all get quite complex!
Why would I need one?
POA’s help you to ensure that your wishes as to how your affairs are managed are fulfilled. Choosing someone to represent you even if you lose mental capacity gives you more control over how processes should be handled should the need ever arise. If you don’t have a POA then this may cause stress for your loved ones as they may have to make decisions guided by paid professionals or pursue legal proceedings and waste time and money just to manage your affairs for a time when you can’t.
If you wish to have someone appointed who can act on your behalf regardless of your situation and for them to remain so, then you should consider an Enduring Power of Attorney.
What is an Enduring Power of Attorney?
Sometimes known as a lasting Power of Attorney (depending on where you live in the world) is a legal document which appoints an attorney to help you manage your affairs after you lose mental capacity.
So how is this different to a Power of Attorney?
An Enduring Power of Attorney remains valid after the donor loses mental capacity. This means that an Enduring Power of Attorney acts on your behalf when you are no longer able to understand the nature and effect of any legal documents you are needed to complete or have completed. People lose capacity for reasons including when they have dementia, are in a coma, have Alzheimer’s, severe mental illness, PTSD, brain damage have suffered a serious stroke and for many other reasons.
What is the role of an Attorney?
An Attorney would be expected to manage property related or financial affairs or both. They essentially step into the shoes of the Donor and act in the way described in the Power of Attorney (document). For example, they may have to buy and see property or manage rental properties. For financial affairs, an Attorney may have to access bank accounts, pay bills, and transfer money.
Are there different types of Attorney?
Yes, there are different types. Again, this depends on where you live in the world. Some people appoint one person, and some people appoint two. You can also decide when you appoint two people if they can make decisions independently or if together, they have to make the same decision.
For each Attorney you will need to specify the conditions of their appointment (their role) and at what point you wish your Attorney to act on your behalf e.g.
- When you become mentally incapacitated
- Only when a specific incident occurs or
- All of the time
Can I change their role?
Yes, you can revoke the conditions of their role at any time following a given process specific to where you live. You may create a new Power of Attorney at any time by revoking the previous POA.
How do I create a Power of Attorney?
It is always best to seek legal advice before making a POA as there are special rules governing how an attorney manages your property, financial, and health care arrangements.
The document also needs to be witnessed by an independent adult who verifies that the document was signed on the date written on the document.
What does the Power of Attorney look like and include?
The POA must:
- Be typed or in writing
- Include the date and your full name
- Clearly state that the document is your Power of Attorney
- Name the attorney or attorneys, state their address, contact details (phone or email) and relationship to you
- State what the Power of Attorney relates to e.g., property matters or financial matters or both and include any specific instructions regarding their role
- Be signed
- Be witnessed by two independent people
How much do they cost?
Like writing a Will, you can draft your own using templates you can find online or preferably you can appoint a legal professional to do this for you using (costs are reasonable from tens to hundreds of your hard-earned coins).
Remember, that it is always better to seek legal advice.
When should I organise this?
It is always safer to organise a POA as early as possible as you must have the mental capacity to do so. A POA cannot be sought once you become unable to manage your affairs and a different process to provide you with support has to occur, usually seeking a type of guardianship through legal processes (stressful, time consuming and expensive)
Different types of POA come into effect, remain valid and expire at different times and so you should be aware of this. All POA’s expire when you die.
What are the pitfalls of having a Power of Attorney?
- The main problem that can occur is that someone else can put pressure on a Power of Attorney to make decisions on your behalf which go against your wishes.
- A Power of Attorney also expires when you (the donor) loses mental capacity which may occur through illness. In this case, an Enduring Power of Attorney is valuable.
How do I choose who to give Power of Attorney to?
Making this decision may not be easy as there is always a chance that the Power granted to an attorney may be abused. Like any decisions we make, there is always the possibility that we may make a decision that is not the best for us.
Appointing the attorney can be like appointing your Nominees for your TellThem4Me® membership. You may wish to consider the following points:
- Is the person reliable and trustworthy?
- Do they have the time to help me?
- Do they know how to do the things I want them to do?
- Do they disagree with my choices about finances and health?