Power of Attorney for Singles - what a General Power of Attorney can do for you
Single people – whether living single, parenting solo, single again, or just single for now – single people have unique risks when it comes to setting up their estate planning documents and Wills.
- Single people value their independence and autonomy.
Freedom comes at the cost of having to rely upon yourself, your ability to make good decisions and having a backup plan, just in case. It could be said single folk are at the highest risk of needing a personal backup plan, just in case, to help them maintain their independence.
There will always come times during busy lives when we all need to rely upon another person to help out with managing life and decisions, whether that's because we're temporarily absent or perhaps just recovering from a sickness or injury before we get back on our feet.
The simplest and most used estate planning document for Single people is a Power of Attorney.
What does a Power of Attorney do?
A Power of Attorney is a legal document that allows you to appoint someone (called your Attorney) to make decisions on your behalf (and usually manage your financial and legal affairs) when you are unable to do so.
- Any decision made by your Attorney will have the same legally binding effect as if you had made that decision yourself.
- A general Power of Attorney document gives your Attorney the ability to make important legal decisions on your behalf and it's therefore wise to choose your Attorney carefully.
Caution: Not to be confused with an Enduring Power of Attorney document, (EPOA) a general Power of Attorney (POA) deals with your assets, for example, real estate and bank accounts. Your POA does not deal with your health, medical treatment or lifestyle. This is managed under a separate document usually called an Enduring Power of Attorney (or Enduring Power of Guardianship).
When do you need to set up your Power of Attorney?
Probably yesterday.
A Power of Attorney document is particularly relevant of a single person (and very relevant for a single parent).
One of the common mistakes we see people make is leaving foundational legal decisions, until the last minute. There are some legal documents you need to have already in place before you need to use them, otherwise, it can be too late to put them in place.
- , In the same way, you get your driver's license issued before you hire a rental car at the airport, in the same way, you need to get your home insurance in place before the bush fire surrounds your house, and in the same way, you need to get you Crisis Insurance policy in place before you are diagnosed with a terminal illness, a General Power of Attorney needs to be documented, signed and in place before you need to use it.
How long does a Power of Attorney last?
You get to decide.
A general power attorney can take effect for a specified amount of time. For example, you may plan to spend 6 months overseas and would like someone to manage your financial affairs for you while you are away.
Alternatively, you can set a period of time linked to a specific event – like moving house for you when you are undergoing surgery or medical treatments where you have reduced mobility.
A general Power of Attorney can also remain active until you revoke it. For example, many elderly clients transfer the day-to-day management of their financial affairs to an adult child when they're physically ill or unable to manage their affairs due to reduced personal mobility (ie: they have surrendered their driver's license, cannot attend the bank due to mobility issues, have deteriorating eyesight and struggle with documentation —even though they are still mentally capable.
What decisions can be made using a Power of Attorney?
Virtually anything that you can legally do, your appointed Attorney can do on your behalf.
This means your Attorney can do the following:
- deposit and withdraw money from your bank accounts on your behalf
- enter into and negotiate legal agreements on your behalf (such as real-estate leases, renewing licenses or other contracts) and related
- buy or sell shares & investments on your behalf
- buy or sell real estate on your behalf
This can include both short term, fixed term or ongoing management on your behalf. For example, for an immediate short-term need, such as an extended overseas trip, a fixed term event such as completing the sale of a property, moving house interstate or having general anesthesia and surgery, or a long-term need to plan for a frail aged person, someone with a disability or perhaps a complex illness with invasive symptom management like dialysis or chemotherapy.
What does a Power of Attorney not do?
There are two exceptions to the available authority granted under a Power of Attorney:
- The Power of Attorney will not be effective in delegating to another person any responsibility you have as a Trustee. This includes where you are an Executor of a deceased estate. Separate laws relate to the delegation of authority as a Trustee.
- The Power of Attorney equally will not be effective in delegating your authority in your capacity as a Director of a company. Delegation of authority by a Director is governed by the Corporations Act.
Frequently Asked Questions
Does my nominated Attorney have to accept their role as Attorney?
It is important to discuss with a potential attorney whether they would be willing to accept the role, as a Power of Attorney or Medical Decision Maker appointment is not valid until both you and your nominated Attorney(s) sign the document accepting the appointment/position.
Can I have more than one Attorney?
You can appoint as many Attorneys as you wish (but more than 3 can become unworkable).
Where you wish to appoint more than one Attorney, you need to decide as to whether the Attorneys are to act jointly or jointly and severally.
- Jointly means that the Attorneys must all sign documents or act together on your behalf.
- Severally means that either or any of the Attorneys may act on your behalf in signing documents and so on.
- Where reference is made to Jointly and/or Severally, then both options apply.
You can also make provision for a Substitute Attorney or Attorneys in case the first appointed Attorney or Attorneys are unable to be your Attorney due to their own sickness, disability, death or unwillingness to act. If you appoint more than two Attorneys, then you may decide whether you wish for a majority rules type approach; for example, two out of the three Attorneys must act together.
How we can help
If you're a single person, setting up your Power of Attorney for Singles is a key step in helping you maintain your independence (and if you're in a vulnerable business structure, an important key legal document to safeguard your business interests too)
Contact us for a confidential chat about your needs.
