Do you need a power of attorney?

Date: Jun 28, 2012

Establishing a power of attorney is something that many people may never think about until it is too late - but what are the advantages of thinking about it early on?

A power of attorney is a legal document created by an individual when they carry out the estate planning process, who appoints another person to take care of their financial affairs should they ever lose the ability to do it themselves.

This includes managing assets such as real estate and shares, as well as managing bank accounts and ensuring bills are paid on time.

This power, however, does not extend to the individual being able to make personal decisions on behalf of the individual, including judgements relating to their health.

It is possible to give anyone power of attorney who is over 18 years old - this can be a friend, relative or even a lawyer.

If you do not want to choose a friend or family member, you can appoint the Public Trustee although they will charge a fee for their services.

You will need to ask the person you want to appoint for their permission before they agree to look after your assets.

Most people do not like to think about what will happen when they are no longer able to manage their affairs, but the fact is that power of attorney will enable them to regain some of this control.

Not only does having a power of attorney give you the knowledge that someone is responsible for looking after your best interests, but will also give your family peace of mind.

If you want to make sure there is someone who can sign documents on your behalf, then a power of attorney is crucial.

One thing to consider is that all the documents need to be in place before the services of your attorney are needed - after you have lost mental capacity, you are unable to make the necessary decisions.

If the power of attorney is signed when you are not fully aware of what you are doing then the chances are that it will be rendered invalid.

Although in most cases the power of attorney will begin as soon as the documents are signed, it is possible to state when you would like it to start.

Providing you still have the mental capacity to do so, it is possible to revoke the power of attorney at any time if you would rather nominate somebody else.