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From 1 March 2014, the new Power of Attorney forms prescribed by the NSW Powers of Attorney Regulation are in effect. Powers of Attorney in the old form signed prior to this date remain valid.

What Is A Power Of Attorney?

A Power of Attorney is a legal document that allows you to nominate one or more persons (referred to as "attorneys") to act on your behalf. A Power of Attorney gives the attorney the authority, if you choose, to manage your legal and financial affairs, including buying and selling real estate, shares and other assets for you, operating your bank accounts, signing contracts for you, and spending money on your behalf.

General Power of Attorney And Enduring Power of Attorney: What Is The Difference?

There is an important distinction to be drawn between a General Power of Attorney and an Enduring Power of Attorney. A General Power of Attorney ceases if you lose your mental capacity after its execution. As such, General Powers of Attorney should only be used as an instrument to ensure the smooth operation of your legal and financial affairs in times when you know you will be unable to manage these for yourself.

You may set whatever limitations or conditions on your attorney that you choose. For example, the new General Power of Attorney forms allow you to specify that the document is only operational during periods when you are overseas.

If you wish the Power of Attorney to continue if you lose your mental capacity, you should make an Enduring Power of Attorney. Putting in place an Enduring Power of Attorney is the most effective way of ensuring that, should you lose your mental capacity, your legal and financial affairs are looked after by the people you trust and have appointed as your attorneys. The new forms allow you to select whether you wish your Enduring Power of Attorney to come into effect immediately, or only be operational should you be certified by a medical practitioner as being unable to manage your own affairs.

If you do not have an Enduring Power of Attorney, your attorneys will be appointed by the NSW Trustee and Guardian. This can be a lengthy process and does not always result in the appointment of people you would have wanted as your attorneys.

It is important to note that people appointed under a Power of Attorney cannot make decisions about your lifestyle or health. These decisions can only be made by a guardian appointed under an Appointment of Enduring Guardian document.

For any questions in relation to this topic or any other Estate Planning matter, please call us on 1300 727 813 or email us.

Related articles:
- Is It Time To Update Your Will?
- Do I Have To Wait For My Inheritance?

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