subject: 4 Ways Power of Attorneys Can Save You Heartache [print this page] 4 Ways Power of Attorneys Can Save You Heartache
APower of Attorney is like an insurance policy that guarantees your affairs will be conducted in the manner you intended. You have a choice between making a general Power of Attorney and an enduring Power of Attorney with the latter being the most popular choice for people as they approach retirement age.
Let's take a look at how powers of attorney actually work. Before you can appoint a Power of Attorney, you need to be able to understand the implications and consequences of what you are doing. If you do not have the capacity to understand this, the appointment will not be legally valid.
A General Power of Attorney is used when you want to appoint other people to make decisions on your behalf, for example when you are travelling overseas and will not be able to sign legal documents or perform banking transactions. They usually last for a specific period of time and may be limited to cover certain transactions. For example, let's say you have purchased a house but have to travel overseas at the time when the property will settle. A General Power of Attorney will enable someone you trust to sign the mortgage and transfer documents on your behalf, so that the settlement can proceed in an orderly fashion.
This saves a lot of trouble and can avoid penalty interest payments, which may apply for a delayed settlement on a house purchase. In these circumstances you can consult with the person to whom you have granted the power to sign on your behalf to assure yourself that your affairs are being conducted in accordance with your wishes.
Remember, however, that if you lose legal capacity, for example where you are injured and suffer brain damage and lose the ability to reason or make decisions, a general Power of Attorney will no longer be valid so that the person you have appointed will no longer be able to make decisions on your behalf.
An enduring Power of Attorney operates in the same way but there is no time frame and it will remain in force until it is cancelled by you, provided you are mentally and physically competent to do so. This type of arrangement is generally used by people as they approach retirement, in anticipation of the loss of mental capacity, such as senile dementia.
In deciding who to appoint as a decision maker, you may want to consider appointing several people, who can jointly act as your attorney. This means that more than one signatory is required for each transaction and can be a safeguard against fraud, or decisions being made against your wishes.
The person or persons chosen for the role should be competent enough to manage your affairs in the way you expect. In family situations a group meeting can be a good way to set up an agreed arrangement, whereby you can clarify the things you would like to have done in the event of your suffering loss of mental capacity. This could include outlining the provisions of your Will, so that any decision that is made will be consistent with your wishes.
Powers of attorney are an invaluable tool to anybody in a variety of circumstances, as outlined above. You are able to delegate important decisions to other people that you trust so that they can conduct your affairs and make decisions as if you had made them yourself.
No matter what your circumstances, it is always a good idea to talk to your solicitor about arranging for a Power of Attorney to be set up, so that you can enjoy the peace of mind that comes with knowing that your financial and personal affairs can be conducted in accordance with your desires.
