This is something we hear too often and unfortunately, by the time people realise that a Power of Attorney is needed it can be too late.
If you are not already aware, Power of Attorney is separate to a Will. Whereas a Will is only effective when you die, a Power of Attorney allows you to appoint people to act on your behalf when you are incapable of managing your own legal and financial affairs during your lifetime. These circumstances can include times when you are physically or mentally incapable of managing your affairs or simply during a period when you may be unavailable such as an overseas trip.
Many people believe that a Power of Attorney is only required when you are “old”. However, as the examples show below, that is not always the case and by the time it is found that you need Power of Attorney in place, you may not have capacity to instruct a solicitor to prepare it for you:
Case A – A local gentleman in his 50’s suffered a medical condition which resulted in him being placed into a coma. At the time he was single and owned multiple properties with mortgages. Unfortunately, without Power of Attorney in place no one was able to access his bank accounts whilst he was in a coma to enable the mortgages to continue to be paid. As a result, the banks were threatening to repossess the properties. The only option for his family was to apply to the NSW Civil and Administration Tribunal (NCAT) to seek orders appointing someone to manage his affairs.
Case B – A couple in their 80’s told us they only wanted to update their Wills and when questioned about preparing Power of Attorney we were told “we don’t need it yet”. Unfortunately the wife was later diagnosed with cancer and began treatment. At that time they believed all of the assets and accounts were in joint names but when the husband went to update their phone contract the provider wouldn’t speak with him because the account was in the wife’s name. He also had difficulty with the insurance for the car as it was also registered in the wife’s name. We then prepared the Power of Attorney for the wife at her hospital bed side to enable the husband to deal with these issues.
Case C – A reoccurring story is a family contacts us to advise that their parent has now been diagnosed with dementia and needs Power of Attorney in place as they are unable to manage their own affairs. The difficulty for us is that if the dementia has advanced then their parent may not have capacity to understand what a Power of Attorney is and instruct us to prepare one for them. In this case the family may also have to apply to NCAT to seek orders.
Case D – A single lady in her 40’s contacted us to assist with preparing her Will. We also advised her on Power of Attorney and she decided to have it prepared as well. Approximately 18 months later she underwent a routine procedure but difficulties were encountered resulting in her being hospitalised for many months. Fortunately her children located our details amongst her documents at her home and contacted us. We were then able to confirm that their mother had her affairs in order and they were able to use the Power of Attorney to continue to manage their mother’s assets whilst she was unable to.
If you would like to discuss Power of Attorney in more detail please contact our office on 02 4651 4800.
