What is a power of attorney?
A power of attorney is a legal document made by one person, who is called the ‘principal’,
that allows another person to do things with the principal’s money, bank accounts, shares,
real estate and other assets. This can include spending and managing the principal’s money,
buying or selling shares for the principal or buying, selling, leasing or mortgaging the principal’s house or other real estate. The person who does these things for the principal is called
the ‘attorney’. A principal is sometimes called the ‘donor’ and an attorney is sometimes called
‘the donee’.
The word ‘attorney’, when used in the expression ‘power of attorney’, does not mean
that the person appointed has to be a solicitor or lawyer. The person appointed as attorney
can be any person over the age of 18 years who is able to assist the principal with money
or property – a relative, friend or professional adviser.
A power of attorney only authorises an attorney to act in relation to financial matters.
It does not allow the attorney to make personal (including medical) decisions for the
principal. Anyone who wants another person to make personal decisions for them should
appoint an enduring guardian under the Guardianship Act 1987.
There are two types of powers of attorney:
General Power of Attorney (also called an ordinary power of attorney) and Enduring
Power of Attorney. The same form can be used to create both.
Making someone your attorney does not mean that you lose your right to operate your bank account, deal with your real estate or affect any other rights that you have. You can continue to look after your money and property while you still have mental capacity to do so. IF you would like legal advice or information on how powers of attorney work in New South Wales or you would like to have one drafted, please do not hesitate to contact us.
