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.
A Power of Attorney (POA) is different to a Will, which deals with your assets when you die. The POA allows you to appoint people to manage your affairs while you’re still alive. Commonly, people use a POA when a family member becomes unwell. But a POA can also be used if someone is overseas and a legal or financial issue needs to be attended to.
Many people believe that a Power of Attorney is only required when you are “old” but most weeks we see people who need a POA and have left it too late. Very often, by the time you or your family member needs a POA, we can’t do anything to help and an application needs to be made to the NSW Civil and Administrative Tribunal (NCAT) to appoint someone to manage the person’s affairs. This can be a traumatic and expensive process.
Case A – A gentleman in his 50’s fell into a coma as a result of medical condition. He was single and owned multiple properties with mortgages but, without a POA in place, no one could access his accounts and ensure that the mortgages continued to be plaid. The banks were threatening to repossess the properties and the only option for his family was to apply to NCAT to appoint someone to manage his affairs.
Case B – A couple in their 80’s came in to update their Wills. We suggested they put POAs in place but they decided that they “didn’t need them yet”. Unfortunately the wife was later diagnosed with cancer and began treatment. 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 registered in the wife’s name. We prepared an urgent POA for the wife to sign in hospital so the husband could deal with these issues.
Case C – A single lady in her 40’s contacted us to assist with preparing her Will. She sensibly took up our advice to putt a POA in place too. A year later, she underwent a routine medical procedure but difficulties were encountered and she was hospitalised for many months. Fortunately her children located our details amongst her documents at home and contacted us. Their mother had her affairs in order and they were able to use the POA to manage their mother’s assets whilst she was unable to.
We also commonly receive calls from people asking that we prepare a POA for an elderly parent who has been diagnosed with dementia. we are in a difficult position because, if the dementia has advanced, their parent may not have the capacity to understand what a POA is. We can’t have them sign the document and, in many cases we direct the family to NCAT to appoint someone.
A Power of Attorney is an important document and everyone should have one in place. Call us on 4651 4800 for an appointment with our Estate Planning experts.