Powers of Attorney
WHAT IS A POWER OF ATTORNEY?A power of attorney is a document that allows a person to enter into transactions and sign documents in your name (as your agent). In other words, they can do anything that you can do, unless the document of appointment (the power of attorney) restricts their powers. They can sign a bank withdrawal slip; buy and sell land; and sign contracts in your name.
You may chose to appoint more than one person as your attorney. Those people may either act together or separately depending on what is in your appointment document. Some people prefer to have two people acting together as it operates as a check. However, sometimes it can be difficult to get multiple signatures on documents, so that from of appointment may not be ideal.
In South Australia, powers of attorney are often expressed to be enduring which means that they continue to operate even if you lose mental capacity (either permanently or for only a short period). This is certainly the most common form of appointment for non-business use.
WHO SHOULD YOU APPOINT? The person/s you appoint as your attorney must be someone you trust. Remember, they have the keys to your house, can access your the bank account and deal with all your other assets. Generally appointments to manage personal affairs are made in favour of spouse and/or family members. Business appointments tend to favour trusted and respected colleagues. However, the choice is entirely yours.
HOW LONG DOES THE APPOINTMENT LAST? A power of attorney might say that it will last for a specified period of time – perhaps whilst you are away on holiday. An appointment made for a specific purpose will cease to operate once that purpose is fulfilled.
A power of attorney can be revoked at any time by the donor (that is the person making the appointment). However, if you have an ordinary power of attorney (rather than an enduring one) it will stop operating when you lose mental capacity. An enduring power of attorney on the other hand will keep operating even if you have lost the capacity to make decisions, but you won’t be able to revoke it.