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Power Of Attorneys And Estate Planning

November 1, 2022

Estate Planning And Power Of Attorneys

Most people put off setting up a will and getting their estate affairs and matters in order.

Often is in not until they have a wake-up call with a family member passing away that they see the fallout of what happens when families start arguing about what is theirs and how the estate should be managed and divided up.

It can bring out the worst in families and cause irreversible rifts.

Having your Estate planning and Power Of Attorney's wishes set out in advance may not be a pleasant thought, but it will help prevent arguments and fights between your children and extended family members.
It will also protect you if you need an advocate or Power of Attorney to help you manage your finances and medical care.

What Is A Power Of Attorney?

A General Power Of Attorney works with financial matters.

This ensures that things like bank transactions, buying or selling property and shares, managing bills and paying taxes can be done on your behalf.

You may want to appoint a General Power of Attorney if:

For example, you will be abroad, facing an extended hospital stay, or limited mobility stops you from accessing banks, shops, or the post office.

In this case - Your general or financial power of Attorney would be your representative with lawyers, banks, estate agents, and anyone else involved with financial matters.

You can stop or revoke this when you can manage your affairs again.

Suppose you do end up being incapacitated and no longer able to manage your affairs. In that case, a general power of Attorney will be dissolved. You may then be transitioned to an Enduring Power of Attorney or EPOA that you may already have organized in your estate planning.

You may be appointed a trustee or guardianship to act on your behalf if this is not.

 If you do not have Power of Attorney, your loved ones may have to go through a lengthy court or legal process to be legally appointed as your substitute decision-maker to help you manage your financial affairs.

There is also the possibility that a court will not appoint the person you would NOT have chosen to make these decisions.

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Who should you appoint as your attorney-in-fact?

When the time comes that you need a trusted "stand-in" to replace you, you'll want that person to have learned their role, right? So your Attorney should be someone who knows and understands your wishes and life plans and who can make decisions with which you agree.

Since your Attorney has the same legal power to make decisions as you do, they should be someone you trust completely and who has your best interests in mind. In addition, they must be able to separate their feelings from the decisions to be made and have the confidence to deal with the differing opinions of family, friends, and medical providers.

Generally, a Power of Attorney can be given to anyone over the age of 18

These are the most common relationships when nominating a Power Of Attorney

  •     Your spouse;
  •     Your siblings;
  •     An adult child; or
  •     A trusted friend.

For financial matters, you can also appoint a professional attorney-in-fact, such as a lawyer or accountant. While this option relieves the burden on a family member or close friend, there is usually a corresponding cost.

Depending on the state or territory, there are some restrictions on who can be appointed. In Queensland, It is possible to have more than one, and you can have up to four.
You will have to nominate who is responsible for what and how they are to act or to make decisions.

Your lawyer is bound by law to act in your best interests and not to obtain any direct benefit from your actions unless you specifically request it.

An essential part of this duty is to keep your money and assets separate from the lawyer's.
Your attorney-in-fact must also record their actions and decisions and support them with appropriate records and evidence.

You are making these decisions while still mentally capable is the best way to ensure decision-making for your family after the fact.

estate planning

What If I need Medical or Health Related Matters Looked after?

A General Power of Attorney can only look after your financial needs while you are still able to make decisions.

You may need to set up an Enduring Power Of Attorney or an Advanced Medical Directive.

Enduring Power Of Attorney

And Enduring Power of Attorney will be appointed to look after all of your affairs related to your finances, estate and healthcare.

You must fully trust who you appoint, and it is a great idea to seek legal advice so you genuinely understand the stages and roles they would have in managing your affairs.

 

An Advanced Medical Directive

They will only look after your medical needs and health and lifestyle decisions.

You may appoint one before surgery or if you have a chronic medical condition like kidney disease or diabetes that will require ongoing health implications and medical interventions.

 

Your medical power of Attorney would be your voice in dealing with doctors or nurses. 

When does a Power of Attorney become effective?

Each is different.

If you are abroad, you can nominate times - such as travel dates.

Sometimes they become effective as soon as the paperwork is formalized and signed.

 

Can a power of Attorney be revoked?

As the granter of a Power of Attorney, you can revoke a Power of Attorney at any time as long as you are mentally capable of doing so. 

A Power of Attorney will expire if you die, in which case the executor will take over the affairs of your estate.

In some states and territories, revoking a Power of Attorney requires you to fill out particular forms. For more information about revocation in your state or region, contact the appropriate authority.

 

Danielle

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