Why a Power of Attorney is an important piece of every financial plan
What is a Power of Attorney?
A power of attorney is a formal document giving another person the authority to make personal and/or financial decisions on your behalf.
Personal decisions relate to your care and welfare, including your health care, (for example, deciding where or with whom you live or consenting to medical treatment).
Financial decisions relate to the management of your finances (for example, paying your bills and taxes, selling or renting your home, using your income to pay for your needs or invest your money).
There are 2 types of power of attorney:
1) General power of attorney and
2) Enduring power of attorney.
General power of attorney
You would use a general power of attorney to appoint someone to make financial decisions on your behalf for a specific period or event, such as if you’re going overseas and need someone to sell your house or pay your bills. It’s used while you can still make your own decisions and ends once you no longer can (i.e. you lose capacity).
You have lost the capacity to make a decision if you cannot:
– Understand the nature and effect of the decision,
– Freely and voluntarily make the decision, and
– Communicate the decision in some way
Enduring Power of Attorney
You would use an enduring power of attorney to appoint someone to make financial and/or personal decisions on your behalf. For financial decisions, you can nominate whether you want the attorney to begin making financial decisions for you straight away or at some other date or occasion, such as once you’ve lost the capacity to make these decisions.
Your attorney’s power to make personal decisions only commences when you lose the capacity to make these decisions.
How do I get my Estate Planning in order?
It is important that you seek guidance from an estate planning solicitor to ensure your estate plan is appropriate, valid and legally binding. As the old saying goes – do it right the first time – this is very true when it comes to estate planning. Even if you have a Will or Powers of Attorney in place but have not reviewed these for some time, it is important to make sure they are still appropriate for your circumstances and the people you have nominated to be your executor and/or attorney are still right for you.
You can contact our office or your adviser directly if you would like to review your estate planning requirements. We will liaise with a dedicated estate planning solicitor and manage the process to ensure your needs are met.
For more information on estate planning and your requirements, contact Collective Wealth Advisers. We tackle today, and tomorrow, together!
- Sep 27 2021