Deciding to appoint a Power of Attorney (POA) is a significant step in managing your affairs. This role involves someone stepping into your shoes to make key decisions if you’re unable to do so yourself. It’s about entrusting someone with your legal and financial affairs or health decisions.
So how do you go about choosing someone who is not only trustworthy but also capable of handling the responsibilities effectively?
What is the role of a Power of Attorney?
First, it’s crucial to understand exactly what a POA does. This role can vary significantly depending on what powers you grant. Generally, there are two main types of POA:
- Financial Power of Attorney: This person will manage your financial affairs, which can include paying your bills, managing your investments, and even selling or buying property on your behalf.
- Healthcare Power of Attorney: This individual is responsible for making medical decisions for you if you’re incapacitated and can’t make these decisions yourself.
Key considerations when choosing your POA
1. Trust and reliability
Above all, the person you choose should be someone you trust implicitly. They should have a solid track record of reliability and integrity. After all, they may one day be making significant decisions about your health and finances.
2. Financial Intelligence
If you’re appointing a Financial Power of Attorney, it’s beneficial if the person has some understanding of financial matters. You don’t need a professional accountant or financial advisor, but someone who is organised and strategic with their finances is likely to be a good choice.
3. Decision-making ability
Consider how this person handles decision-making. Are they calm under pressure? Do they make informed, thoughtful decisions? You want someone who will think things through and not act impulsively, especially when it comes to medical decisions.
4. Availability
The role of a POA can be demanding, especially if unexpected issues arise. It’s important to choose someone who is generally available and geographically accessible or someone who can become available fairly quickly if needed.
5. Willingness to take on the role
Always discuss this role with the person you are considering before making any decisions. They need to be willing and prepared to take on the responsibilities involved. Being a POA can be a heavy load, and not everyone may feel comfortable or equipped to handle it.
How to make your choice
Once you’ve considered the necessary qualities and checked whether your potential POA is willing, it’s wise to have an open conversation about what the role entails. Discuss your values and what matters most to you in terms of both healthcare and finances. This clarity can help prevent any confusion or conflict later on.
You could also consider having a secondary POA. Circumstances change, and having another trusted person who can step in can provide you with extra peace of mind.
Making it official
Once you’ve made your choice, it’s time to make it official through the proper legal channels. This involves having legal documents drafted, signed and witnessed. You can complete this process by working alongside a lawyer to support you in making sure that everything has been completed and signed correctly.
Choosing a Power of Attorney can be a tough decision and one that shouldn’t be taken lightly. It’s about ensuring that your affairs will be in good hands, even when you’re not able to handle them yourself. Take your time, choose wisely, and your future self will thank you for it.
Written by APS Wills & Estates Principal Lawyer Phillip Lambourne
Phil is a lawyer with over 35 years of experience in private practice and over 25 years of experience in the trusts and estate planning area. As Principal Lawyer with APS Wills & Estates, Phil provides advice and prepares documentation in the areas of Wills, Powers of Attorney, Probate and Estate Administration for clients across Australia. He also provides clients with conveyancing and property law, commercial law and state tax advice services.
When Phil isn’t working, he enjoys spending time with family, reading new books, and watching new shows with some good scotch whisky, red wine and cheese. Phil also enjoys playing trombone in the Melbourne Lawyers Big Band!