In WA, there are two types of Powers of Attorney which an individual may enter into:
- General Power of Attorney
- Enduring Power of Attorney
Rationale for Making A Power of Attorney
Many are under the impression that we are only required to make a power of attorney if we are in business, have investment assets or are reaching old age. This is far from the truth.
Almost all of us hold some form of assets such as real estate, money in a bank account, vehicle, shares or a business. At some point or other, we travel for work or holidays during which time, an issue relating to our financial affairs may crop up. Young or old, we are not invincible. We may suffer the misfortune of losing mental capacity, temporarily or permanently, as a result of an accident or illness. During these times, it is vital that a person has been appointed as our attorney so that financial affairs can be dealt with quickly to meet our medical, personal or our family’s needs.
Power of Attorney Lawyers
There are therefore good reasons for you to consider making either a General Power of Attorney or an Enduring Power of Attorney. Robertson Hayles Lawyers have many years of experience as Power of Attorney Lawyers. Being experienced Power of Attorney Lawyers, we are able to provide you with advice and prepare the necessary power of attorney to suit your needs.
Criteria for Executing A Power of Attorney
A Power of Attorney is a document that is executed by an adult with full legal capacity (“the donor”) that gives another person or persons (“the done or donees”) the authority to make decisions on the donor’s behalf. These decisions are limited to matters that effect the donor’s property and finances.
A donor has full legal capacity when the donor person is able to understand the nature of the power of the attorney he or she is executing. In executing this document, the donor is giving authority to another person to make property and financial decisions on the donor’s behalf.
Difference between a General Power of Attorney and an Enduring Power of Attorney
A General Power of Attorney is only effective whilst the donor continues to have mental capacity. It is commonly used in situations where the donor may need to travel overseas for an extended period of time or may not be physically present to implement financial decisions. A General Power of Attorney ceases when the donor loses mental capacity.
In contrast, an Enduring Power of Attorney will remain in force when the donor no longer has mental capacity. If it is contemplated that the power of attorney will be used in relation to the sale, purchase, mortgage or any other dealing in land, the power of attorney must be registered with Landgate. For both General Powers of Attorney and Enduring Powers of Attorney, if the donor wishes to revoke the powers, it must be done in writing while the donor has full legal capacity.
All powers of attorney cease to have any effect when the donor passes away. In this instance, if the donor has made a last Will, this last Will comes into play with an executor appointed to attend to the winding-up and distribution of the assets of the deceased in accordance with the terms of the last Will.
Seek Advice from a Power of Attorney Lawyer
General Powers of Attorney and Enduring Powers of Attorney are important legally binding documents. It is best to seek legal advice from Power of Attorney Lawyers before executing a Power of Attorney. Mistakes made in the preparation and execution of a Power of Attorney may cause the document to be invalid. For example, the Guardianship and Administration Act 1990 (“the Act”) sets out rules as to the maximum number of donees, the qualification of a witness to an Enduring Power of Attorney and how many witnesses must be present. The Act also imposes obligations on the donee of an Enduring Power of Attorney, such as keeping accurate records. If a donee is found to be in breach of these obligations, there are statutory penalties that apply. It is critical that these obligations and consequences are explained to and understood by a proposed donee before execution of the Power of Attorney occurs.
It is a common misconception that an Enduring Power of Attorney gives the donee the power to make lifestyle and medical treatment decisions on behalf of the donor if the donor is unable to do so. This is not the case. The document required to give this authority is governed by the same Act but is called an Enduring Power of Guardianship.