Insights into the Powers of Attorneys: Types, Responsibilities and Processes
A Power of Attorney (POA) is a legal document that grants authority to another person (the attorney) to act on behalf of the principal in a range of matters. The principal is the person who grants the power and can specify the scope of authority granted in the POA. The attorney’s role is to make decisions and take actions according to the wishes and best interest of the principal. This can include actions such as managing bank accounts, signing documents, accessing, and managing investments, making legal decisions, and more depending on the terms outlined in the POA document.
- Types of Power of Attorneys
In Queensland, there are two main types of POA: General Power of Attorney (GPOA) and Enduring Power of Attorney (EPOA). A GPOA grants someone the authority to act on behalf of the principal for a specified timeframe. For example, if someone is travelling for a limited period of time, they may grant a GPOA to a trusted person for that time. The appointed attorney can manage bank accounts, sign contracts, access and manage investments, and make legal decisions outlined in the document. A GPOA ceases to be valid upon reaching its specified expiration date as indicated in the initial agreement. Additionally, the principal retains the right to revoke the GPOA while still of sound mind and capable of making decisions.
An EPOA, on the other hand, is used to grant someone the authority to act on behalf of the principal in financial and legal matters, even if the principal becomes incapacitated due to illness or injury. Unlike a GPOA, an EPOA remains effective and essential for long-term planning and the continuous management of the principals’ affairs during periods of incapacity, such as age-related conditions or unforeseen health issues.
- Responsibilities
Attorneys appointed under a POA carry significant responsibilities. They must act in the best interests of the principal, maintain accurate records of all transactions and decisions made on behalf of the principal. Additionally, attorneys must avoid any conflicts of interest and prioritise the principal’s needs first. Limitations on powers granted may include specific instructions regarding financial transactions, property management, or healthcare decisions. These limitations ensure that the attorney’s authority aligns with the principal’s intentions. Unfortunately, some individuals may abuse their POA position by misusing funds, making unauthorised decisions, or neglecting their responsibilities. This can result in financial harm, legal issues, and emotional distress for the principal and their beneficiaries. It’s crucial to choose a trustworthy and responsible attorney and regularly monitor their actions to prevent such abuse.
Granting a POA involves several key steps:
- Firstly, the principal must carefully select someone they trust to act as their attorney. Your attorney should be reliable, responsible, and capable of making decisions on the principals’ behalf.
- Then, the scope of authority that is required must be determined. This could include financial matters such as managing bank accounts, paying bills and handling investments as well as specific conditions and limitations that are needing to be imposed.
- Once the powers needing to be granted have been determined, the POA document needs to be drafted. This document should clearly outline the granted powers, any limitations, and the responsibilities of your attorney. During this stage of the process, it can be helpful to seek professional advice to ensure the document accurately reflets your intentions and complies with legal requirements.
- Finally, after drafting the POA document, it needs to be signed and executed according to legal requirements in your jurisdiction. This involves having witnesses present during the signing of the document. It is important to follow the legal procedures to ensure the POA is valid and enforceable when needed.
3. Importance of Professional Guidance
At Salerno Law, our Wills and Estates team boasts specialised knowledge in the realm of POA matters and provides personalised guidance that places paramount importance on the principal’s interests.
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