Setting up a Power of Attorney
A power of attorney is a legal document that gives somebody the power to act on another person’s behalf or in their best interests. It authorises a person or group of people (the attorney) to make decisions relating to the legal and financial affairs of another person (the principal), and can be a family member, relative, friend or professional, as long as they are over 18.
Who needs a power of attorney?
There are many reasons you might wish to consider appointing a power of attorney to look after things like your money and property. These include:
- Experiencing a decline in your mental health that affects your ability to manage your own affairs
- Being injured, immobile or experiencing physical ailments that make it difficult to get around
- Being in hospital, travelling or deployed in a foreign country
- Living remotely and finding it difficult to access services
- Having difficulty managing your money yourself (there is absolutely no shame in this, and there is always help available if you need it)
Are there different types?
Yes. Here are the three different ways someone can make decisions on your behalf:
General power of attorney
This gives one or more persons the authority to act for you in financial and legal matters, including buying or selling real estate or shares, operating your bank accounts, and spending money on your behalf.
You get to decide when it comes into effect, for how long, and for what purpose. This type of attorney can be useful if you have a specific period of time, or specific task, for which you need some extra support.
Enduring power of attorney
As the name suggests, this arrangement allows a person to make financial decisions on your behalf in an ongoing capacity if your health deteriorates in a way that affects your ability to make decisions about your money and property. You can tailor this type of power of attorney to meet your needs, including imposing limits on what your attorney can and can’t act on, and it’s a really important way to have your say about what happens to your finances and affairs if you are no longer able to manage them yourself.
Authority to operate
An authority to operate, otherwise known as a signatory, is a type of authority that your bank can offer you in relation to your bank accounts. It works by giving another person access to one or more of your accounts, and allows the nominated person to perform transactions and other tasks directly related to those accounts. The authorised person won’t be able to do anything outside their authority, like open a new account.