Powers of attorney and estate planning

A power of attorney (POA) is a legal document in which you appoint a person or trustee organisation of your choice to manage your assets and financial affairs while you are alive. It enables your financial affairs to be managed according to your wishes when you do not want to manage them yourself, or are unable to – such as when you are ill, travelling or simply do not wish to be burdened with the day to day management of your financial affairs.

You can use a power of attorney for almost any financial purpose, tailoring it to your particular needs. For example, you can authorise your attorney to collect debts, vote at meetings, operate your bank account, sell your house, manage your investments or carry out any other function which can be lawfully delegated. You may cancel your power of attorney at any time.

General power of attorney - this is only valid while you are of sound mind and able to make decisions about your affairs. Should the situation arise where you are no longer sound of mind (for example, following an accident or injury), the POA is automatically cancelled. This type of document is often used by persons travelling overseas for a designated period of time and who require their assets to be managed or their bills paid.

Enduring power of attorney - this will continue to have effect after you have lost your capacity to self-manage. This is important for everyone, but particularly for elderly people.

You should bear in mind that choosing a POA is an important decision and you must be able to trust that the person you appoint will act in your best interests. You can choose the level of decision making power and access to your finances that they have, and at what times they may act on your behalf.

An experienced wealth protection lawyer at Stacks will be able to advise you about your unique situation and prepare the power of attorney document accordingly.

Need help with appointing a power of attorney? Speak to the specialist wealth protection lawyers at Stacks.

Will I lose control over my financial affairs?

No. Making a power of attorney just gives your attorney formal authority to manage your financial affairs according to your instructions. Your power of attorney can be cancelled at any time, provided you have the capacity to do so.

What decisions can my power of attorney make?

In NSW, a power of attorney can only apply to financial or legal matters. These include receiving income, paying bills, taxation and contractual issues, investment and property management.

Decisions about your lifestyle, medical treatment or welfare are covered by enduring guardianship, which is a separate document.

Why have an enduring power of attorney?

If you don’t have an enduring power of attorney and you lose the capacity to manage your financial affairs, the NSW Civil and Administrative Tribunal (NCAT) may need to appoint a financial manager to make financial and legal decisions for you. This will not necessarily be the person you would have chosen, and this could cause stress and conflict for your family and friends. By making an enduring power of attorney, you are ensuring that your affairs are managed by the person or organisation of your choosing.

A person (typically a close family member) may make an application to NCAT to become your financial manager. NCAT will first assess your capacity to make your own financial decisions and make a determination following a hearing. NCAT will decide whether or not the person applying to manage your affairs is suitable. If not, the NSW Public Guardian may be appointed to manage your affairs.

Who can make a power of attorney?

In order to make a valid power of attorney you must be 18 years or over and be able to understand exactly what is involved. This means that you understand:

The authority your power of attorney will have and the kinds of decisions they will be able to make
When and how your attorney will have authority to exercise their power
The effect that the actions of your attorney could have on you
The options you have to cancel or change your attorney appointment in the future

How do I make a power of attorney?

Making a power of attorney involves a formal document which gives someone else the authority to make financial decisions on your behalf. The process is as follows:

You sign a form appointing as an attorney the person or trustee organisation of your choice
You may specify the types of decisions that your attorney will be able to make
Your attorney agrees to their appointment by signing the acceptance section of the form

Seeking advice from a lawyer is recommended, as everyone’s circumstances are unique and there can be many variations to a power of attorney. You can also see the NSW Trustee and Guardian to prepare your power of attorney document and also act as your attorney if you prefer not to burden your family or friends with this role.

I have a will: isn’t that enough?

A power of attorney lets you appoint someone who can manage your financial affairs on your behalf while you are still alive. Your will distributes your assets according to your wishes after your death. Having both an enduring power of attorney and a will is important for peace of mind.

Who can witness a power of attorney?

At the end of all enduring power of attorney forms there is a prescribed witness certificate. This certificate can only be completed by:

A solicitor or barrister
A registrar of a NSW Local Court
A licensed conveyancer who has completed an approved course under the Powers of Attorney Act
An employee of Public Trustee NSW or a Private Trustee company who has completed an approved course under the Powers of Attorney Act

The certificate states that the witness:

explained the effect of the power of attorney directly to you before it was signed
was satisfied that you appeared to understand the effect of the power of attorney

The witness who signs the certificate cannot be the attorney, but a solicitor may be a witness.

Who should I appoint as my attorney?

Choose wisely, as your attorney will be responsible for making legal and financial decisions on your behalf. You need to be able to trust that they will act in your best interests, and be confident that they will competently make any necessary decisions. The attorney ultimately is liable to criminal ramifications if they improperly take your money or transfer your assets, but this can sometimes be difficult to prove.

Your attorney must agree to take on the role, so you should discuss what is involved before you appoint them. Just because the person cares about you does not necessarily mean they will be comfortable taking on the role, or be able to handle your affairs objectively. You want to ensure that your affairs will not be mismanaged.

You should also consider the age and future capacity of the person you appoint. For enduring powers of attorney, it is likely that the person will not be called to act as your attorney until some time in the distant future. A friend or relative who is much older than you may therefore not be an appropriate choice.

What are my attorney’s duties?

You can give your attorney the power to make any decisions regarding your property or finances that you could do yourself. This includes selling property, managing investments and shares, and accessing cash to pay bills.

You may want your attorney to do specific things such as paying bills, but not allow them to sell shares or property. A power of attorney can only be used in the way it has been granted. If your attorney exceeds their authority, legal action can be taken and your attorney is liable to pay compensation to you if you suffer loss as a consequence.

Your attorney must also recognise your right to confidentiality and respect your views and wishes.

Can an interstate enduring power of attorney be used in NSW?

Yes. An enduring power of attorney made in another state or territory in Australia is automatically recognised in NSW. This does not apply to enduring powers of attorney which were made overseas.

Should I register my power of attorney?

You do not have to register your power of attorney unless you want your attorney to deal with any real estate you own in NSW. If so, then you must register the power of attorney document with the Land and Property Information Division of the NSW Department of Lands (for a fee.)

If you register your power of attorney, it will be on record as a public document and may be more easily accepted as evidence that your attorney has authority to deal with your property or financial affairs.

After registration, your original document will be returned to you with a registration number stamped on it. Your attorney then uses this number when signing any documents on your behalf.

If your power of attorney is registered and you later revoke it (cancel it), you should register the revocation.

Where should I keep my power of attorney?

You should keep your power of attorney document in a safe place and provide your attorney with a copy. You should also provide a copy to anyone else who needs to know its contents, such as your solicitor or accountant.

How do I revoke (cancel) a power of attorney?

You can revoke or cancel a POA at any time as long as you are capable of understanding what you are doing.

There are many reasons for wanting to cancel a power of attorney. For example, your circumstances may have changed, or your relationship with the attorney may have changed.

You must inform your attorney in writing that you are bringing their appointment to an end. If you don’t inform them of the revocation, then your attorney can keep making decisions on your behalf. Your bank and any other relevant businesses with which your attorney may have been dealing should be notified of the revocation. If your power of attorney is registered, you should also register the revocation. Once revoked, you should destroy the original and any copies of the attorney document you may have.

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No hidden fees

We’ll always be honest and upfront. We’ll look you straight in the eye and agree on a plan before moving forward.

Deep expertise

We know the ropes and our professionals have expertise specific to every legal situation—many are Accredited Specialists.

Practical advice not legalese

We speak clearly and directly, so you understand our advice and can make decisions with confidence.

Network of local offices

We’re local to wherever you are, and our offices are owned and operated by friendly, local professionals, proud of their communities.

Real client care

We genuinely care about our clients. It’s the core of who we are and has been since the first practice was opened by ER Stack on the NSW Mid-North Coast in 1931.

Progressive practise

We make the process easy for you with the latest tech to keep services cost effective—and you in control.