The Powers of Attorney Act 2003 (NSW) (Act) provides for a person to appoint another person as their attorney to make financial and contractual decisions on their behalf.
The Act does not require that the person granting the power be an adult. Children too can thus grant a power of attorney. This is not the case for appointing an enduring guardian, which can only be done by an adult.
The document granting a power of attorney is a prescribed form under the Act.
For adults, if they are suffering from any illness, have deteriorating health, are going overseas or interstate or just want peace of mind, appointing an attorney to assist you to manage your affairs is generally a good idea.
Often children get diagnosed with medical conditions that may progressively affect their mental faculties or ability to read/write, so it is good to know that they can too appoint an attorney (such as a parent) to manage their financial affairs when required.
The child appointing an attorney must however, demonstrate understanding of what they are doing and that they are making the appointment freely and voluntarily, so their age and maturity are a relevant factor.
TYPES OF POWER OF ATTORNEY
A general power of attorney does not require a solicitor’s certificate however, it ceases to be of effect if you lose mental capacity (like where you are in a coma or suffer from dementia or some other illness that affects cognitive ability).
An enduring power of attorney on the other hand continues to be effective if you were to suffer such an incapacity. For this reason, an enduring power of attorney must be explained to you and witnessed by a lawyer who will provide a certificate in the prescribed form. We usually recommend an enduring power of attorney so that if some event happened to you that affected your capacity, your attorney would still be able to assist you.
HOW DOES A POWER OF ATTORNEY OPERATE?
The person appointing an attorney (the principal) can choose when the power of attorney is to take effect. It can be restricted to only take effect if a registered medical practitioner certifies that the principal is of unsound mind, upon some other event, from a date the principal determines or, it can operate immediately (for convenience).
An attorney may not use the principal’s monies or assets for gifts or benefits to the attorney or third parties unless this is specifically authorised in the document granting the power of attorney.
Provided the principal remains of sound mind, they can revoke a power of attorney at any time by signing a form of revocation and providing the attorney with that revocation.
The New South Wales Civil & Administrative Tribunal (NCAT) can review or revoke a person’s appointment as a power of attorney and can make a financial management order appointing a new attorney (or attorneys) or by appoint a representative of the NSW Trustee & Guardian if it is considered that your attorney/s is/are not making appropriate decisions on your behalf.
NCAT can also appoint a guardian by making a guardianship order so that the person’s medical, accommodation and lifestyle needs can be met however this is often only needed for children over 16 as their parents can generally consent to treatment under that age.
For further information in relation to estate planning or powers of attorney or contracting with minors generally, contact McKillop Legal on (02) 9521 2455 or email firstname.lastname@example.org.
This information is general only and is not a substitute for proper legal advice. Please contact McKillop Legal to discuss your needs.
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