Legal Tip 73: The 2 types of Powers of Attorney

Discussion in 'Legal Issues' started by Terry_w, 30th Aug, 2015.

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  1. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

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    One person can give another person(s) legal authority to act on their behalf. The principal can appoint an attorney. In NSW this is governed by the Powers of Attorney Act 2003
    see http://www5.austlii.edu.au/au/legis/nsw/consol_act/poaa2003240/


    Appointment of an attorney will mean the attorney can act on your behalf for financial matters such as operating bank accounts, entering contracts etc. The attorney can do anything you can do subject to the limitations imposed by the legislation and by the deed of appointment.

    In NSW and most other states there are 2 types of appointments
    - General Power of attorney, and
    - Enduring Power of Attorney.

    The general appointment is often done for a specific period and/or for a certain event. A son may appoint a parent as attorney so they can bid at auction for them while they are overseas for example. The general power of attorney, in NSW, will cease to operate if the principal were to lose capacity.

    Only an enduring power of attorney can operate once capacity has been lost. In NSW it needs to be witnessed and explained by a solicitor or other authorised person.

    Everyone should have considered appointing someone an enduring attorney just in case of accident. Without an attorney can application would need to be made to the guardianship tribunal (who have a different name now) or the Supreme Court and this can be costly and time consuming and the application could be challenged by different family members - parents and defactos seem to fight it out occasionally.

    Appointments can be restricted when they are effective - could start on signing or on some other event such as losing capacity.

    And don’t forget to review your appointments every year or so as relationships change and people such as parents get older.
     
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  2. KateAshmor

    KateAshmor Victorian Conveyancing Lawyer Business Member

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    From 1 September 2015 (tomorrow!), new Power of Attorney laws come into affect in Victoria.

    The enduring power of attorney (financial) and power of guardianship will merge into the one enduring power of attorney.

    General powers of attorney will be called general non-enduring powers of attorney.

    Powers of Attorney made under existing legislation will remain valid under the changes.

    The Act does not affect enduring powers of attorney (medical treatment), which will continue to be regulated separately under the Medical Treatment Act 1988.
     
  3. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

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    That was good timing then!
     
  4. ozwanderlust

    ozwanderlust Member

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    I have a question on the above requirement that an EPOA in NSW must be witnessed and explained by a solicitor or other authorised person. Situation: We live in the UK, and need to put in place an EPOA to appoint directors for our SMSF (while we live in the UK) - our home is still in Sydney, and will return there in a few years. Does the solicitor (who witness our signatures) have to be a NSW solicitor? Or, can it be an Australian solicitor? Do our signatures for the EPOA have to be witnessed in Australia? Or can our signatures be witnessed by a solicitor who happens to be in the UK for work or holiday? The attorneys (whom we give the EPOA) live in WA. Their family solicitor from WA will be in the UK for holiday in a few months time. Can we have this WA solicitor witness our signatures for the EPOA?

    Thanks in advance!
     
  5. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

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    You will have to look up the power of attorney act or seek legal advice. Without checking I would think any Australian lawyer would be ok - but this I mean anyone with an Australian practicing certificate, but a UK one may be ok too
     
  6. hobo

    hobo Well-Known Member

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    If a person lives mostly in QLD but owns property in VIC, do they need to do two separate POAs to enable someone to manage all of their affairs if capacity is lost?
     
  7. Terry_w

    Terry_w Structuring Lawyer and Finance Broker - all states Business Member

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    Attorneys appointed in one state can act in another generally.
     
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  8. ozwanderlust

    ozwanderlust Member

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    Many thanks, Terry, for your reply. I will check with our attorneys - if their family solicitor in WA can witness our signatures for the EPOA. This solicitor is only in the UK for holiday and will stay at the attorneys' flat near us.
     
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