What Is A Power Of Attorney And Why Is It Important?
A Power of Attorney document gives a chosen person (sometimes a lawyer, other times a relative) legal authority to act on behalf of someone else in case they are unable to do so themselves. It allows the authorised person to manage the financial and/or business affairs of another in instances such as absence due to illness, overseas travel, or in the event of mental incapacity and a range of other issues agreed in the Power of Attorney document. For many people it is best to talk to a North Shore lawyer for Power of Attorney advice and support.
Why is it Important to have a Power of Attorney in place?
If at any time in your life you are considered incompetent to deal with your own affairs, you will need a trusted and competent person to do so on your behalf. A Power of Attorney allows you the opportunity to choose the person you trust with the power. They will only be allowed to operate within defined limits and authority that you set out in the Power of Attorney document. The document and its powers are to protect, rearrange, or deal with your financial and/or business affairs in a responsible manner. If for any reason you become unable to manage your own affairs in the future and you have not organised a Power of Attorney, a court of law may have to appoint persons, usually referred to as conservators, guardians, or committees, to act on your behalf. If court proceedings become necessary you may no longer be able to choose the person you would prefer to represent you. It will also take more time and cost more money.
What Acts does a Power of Attorney Allow?
In a valid Power of Attorney, the person you have named to act on your behalf will be referred to as your ‘Agent or ‘Attorney-in-Fact’ and will have the power to take any action permitted in the document on your behalf. In order to invoke such power, your agent may have to present the original, signed Power of Attorney document.
Different Types of Power of Attorney Documents
There are various types of Power of Attorney. You can see more detail here on the New Zealand law Society website. A brief summary follows:-
A Power of Attorney for Finances also called a ‘Durable Power of Attorney for Finances’, allows you to choose the person who will have the power to take decisions on your behalf regarding any legal or financial matters. In this document, you can be very specific about the actions you authorize the agent to take including the kind of decisions and which account/s the agent will have access to.
If you execute a Power of Attorney for Health Care, the agent can make decisions on the type of treatment you receive dependant on your medical condition. For example, becoming comatose or terminally ill or in situations where you may survive but are incapable of making your own medical decisions. This is a separate document that informs family members what type of medical care you want to receive or do not want to receive in the event that you are incapacitated. It can also be a directive that states that no heroic measures should be taken to keep you alive when there is no realistic prospect of full recovery. In some ways, a Living Will often duplicates the information contained in a Power of Attorney for Health.
An Enduring Power of Attorney legally authorises your agent/s to act on your behalf and, subject to certain conditions, will remain in force until death.
Guardianship is given by a probate court and is a legal relationship that gives a chosen person (guardian) the legal power to take decisions on behalf of the named person (ward). Proceedings for legal guardianship can be initiated in a probate court by a family member or friend. The court may require a medical examination, carried out by a licensed doctor, to establish whether the person’s condition makes him/her unable to meet the requirements essential for his/her personal health and safety.
Power of Attorney is also an important document for unmarried couples living together. It gives one partner the power to make decisions when the other becomes unable to do so. Without a Power of Attorney, the courts will usually assign power to the next-of-kin when a person becomes incapacitated.
Other Aspects of a Power Of Attorney
As long as you are alive you can revoke a Power of Attorney at any time by advising your Agent or Attorney-in-Fact of your decision.
A Power of Attorney can also have a date on which you wish it to expire.
A Power of Attorney can save you a lot of money and complication often in times of stress or emotional turmoil.
Imagine if a family member has a serious traffic accident and cannot make decisions about finance or health. With a Power of Attorney, the appointed agent can make those decision rather than having to go to court. Even simple things like stopping the electricity would need a court order without a Power of Attorney in place. Imagine too if someone has regular payments from their bank which are not necessary while they are away or incapacitated. If you have a Power of Attorney, then you can contact the bank on behalf of the incapacitated person and halt or suspend those unnecessary payments.
For help talk to a North Shore lawyer for Power of Attorney like McVeagh Fleming or visit their website www.mcveaghfleming.co.nz.