Whilst you may believe it too early or unnecessary to appoint your power of attorney it is important to protect yourself, your assets and those around you by starting the process sooner rather than later. If you have been confused or concerned about appointing your Power of Attorney keep reading to clarify some common myths and misconceptions.
Common Power of Attorney (POA) myths (and their truths)
Myth 1: A Will is the same thing as a Power of Attorney
This is not true. A Will is a document that details instructions for the distribution of your assets once you die. On the other hand, a Power of Attorney appoints a person or people to make decisions for you on your behalf whilst you are still alive but are not able to make those decisions anymore.
Myth 2: A Power of Attorney will take away your own powers
Appointing someone as your power of attorney does not take away your legal rights, it simply means that if you become incapacitated either temporarily or permanently and can no longer make decisions for yourself, then the appointed person can make them on your behalf. This only comes into effect if and when you can no longer make decisions.
To ensure your Power of Attorney acts in your best interest and makes the decisions that you would make if you were able, you should specify clear instructions in your Power of Attorney documents for the person you appoint to follow. This way you can somewhat control what happens even if you yourself cannot make these decisions in the moment.
Myth 3: I do not need to appoint a Power of Attorney because my spouse will take on that role.
Although you may choose to appoint your spouse to be your Power of Attorney, you don’t have to. Indeed you may choose someone else instead. Whatever you decide, it is strongly recommended that you clearly specify who you are appointing and also discuss it with them before finalising the documents, not only for your sake but also for theirs. That way they will be ready and willing to perform the required duties.
Without a designated POA, your family will likely resume the responsibility, which may lead to conflict if they cannot agree on the best decisions for you. By choosing your attorney, you are ensuring that the person making decisions for you is someone you trust, rather than someone required to perform the role by default.
Myth 4: A Power of Attorney cannot be revoked
This is completely untrue. A Power of Attorney can be revoked at any time by notifying the attorney, however it is best to do so in writing. Further, each state/territory has specific requirements that should be adhered to.
- Further reading: Cancelling or Changing Your Power of Attorney
Myth 5: As an attorney, I do not need to keep records
This is false. It is imperative that your attorney keeps accurate records so that a full account can be prepared if required. Further, you can specify in your Power of Attorney that you wish for your attorney to keep record of all of their activities undertaken on your behalf.
Myth 6: There is no limit on the power of my attorney
This isn’t necessarily the case. Not only is it important to appoint a Power of Attorney, but you can also include or exclude specific conditions or instructions that you wish them to adhere to when they are acting on your behalf.
Myth 7: My Power of Attorney will continue to have access to my accounts after I die
Your attorney’s authority to act on your behalf ceases upon your death. At that point a legal Will comes into effect and your wishes, as detailed in there, will be followed (and NOT your POA).
- Further reading: Power of attorney and your Will explained
Myth 8: Isn’t an ‘attorney’ a lawyer?
If you have heard the term attorney it is likely that you have been watching American TV. In the US an attorney is another word for a lawyer. However, here in Australia an attorney is the person who makes medical, personal and financial decisions on your behalf as appointed when you are incapacitated. An attorney is not a lawyer in Australia.
Myth 9: I have to appoint a family member to be my POA
This is not true. Again, it’s entirely up to you to choose who you nominate as your attorney, and it can be anyone at all. However, as your POA is someone that will have the capacity to make decisions on medical, financial and personal matters on your behalf it is essential that you trust the individual you appoint.
There are many reasons why you may opt to appoint a POA who is not a family member. Some of these include if there is a history of family conflict and disagreements, a history of substance abuse or violence, or if there’s a history of having difficulty managing their own finances. Any of these reasons would likely indicate that your family member may not be the best fit to step into the role of your Attorney.
It is important to appoint a Power of Attorney so that you can prepare yourself and those around you in the event that you can no longer make decisions for yourself. We have debunked some common myths and cleared up some common misconceptions so you should be well placed to make your POA now.
Get started today at willed.com.au.