Power of Attorney

An important aspect of estate planning you need to consider is the appointment of a power of attorney. A power of attorney is a document whereby a person appoints another to perform certain tasks on their behalf.

 There are two basic approaches to powers of attorney:

•	Non enduring power of attorney; and
•	Enduring power of attorney.

 Non-Enduring Power of Attorney

A non-enduring power of attorney is usually set up so the attorney can cover a specific event for a fixed period of time (restricted). For instance, it can be granted for duration of your absence (for example, if you are going overseas). However, the power can be unrestricted whereby the attorney has the capacity to make any decisions on behalf of a person with respect to that person's property, while the power of attorney remains in force.

If you're going to be absent from your normal place of residence for a considerable period, you may want to consider who will look after your financial affairs. Given that you can limit the powers granted under a power of attorney, you may wish to grant a close relative a limited power of attorney to look after your financial affairs whilst you are away.

Non-enduring Powers of Attorney become invalid if the person who granted the power becomes mentally incapacitated.

Enduring Power of Attorney

The enduring power of attorney is suited to looking after the affairs of a person when they are not in a position to look after their affairs themselves. Unlike a general power of attorney that ceases to be active once a person who granted the power becomes mentally incapacitated, an enduring power of attorney continues to be operative when a person becomes mentally incapacitated.

In light of this, consideration should be given to granting an enduring power of attorney.  This will ensure your affairs can be handled on your behalf should anything happen to you.  Furthermore, it would continue to operate if you became ill or disabled and lost the capacity to make decisions.

Because of its legal effect, an enduring power of attorney can only be signed after obtaining the advice of a solicitor. The use of an enduring power of attorney should be carefully weighed before implementing such a strategy.