A Power of Attorney is something that can be an important consideration and option as you look towards your plans for the future, your life ahead and how you’ll get there. There are key differences between a Will and a Power of Attorney, and the two concepts are not interchangeable.
The major difference is that a living Will is about expressing your wishes and intentions through a legal document that serves as a statement of intent; but while a Will does have an executor, their job and the function of the document is important in order to distribute your assets and property in the event of your death. But a Power of Attorney involves somebody else acting and making decisions actively on your behalf.
Having a Power of Attorney is crucial to planning ahead in the same way as writing your Will. It allows for an appointed person to have the legal authority to take care of and guide your financial affairs without your express permission being needed for the decisions that they undertake.
A Power of Attorney is important if you are unable to manage your affairs
There may be a wide range of circumstances in which you would want to appoint an attorney to fill that responsibility, but the general rule is that it will be in place in a situation in which you are not able to effectively manage your affairs yourself. For example, you may want to assign an attorney if you are on an extended overseas trip or you are indisposed, or if you are unable to manage things because of medical reasons.
However, there are other circumstances in which you may wish to make the voluntary decision to appoint an attorney. While of course POA guidelines, rules and regulations may differ from state to state, these are some of the circumstances suggested by the NSW government in which a Power of Attorney may be the right option:
There are many reasons to consider using a Power of Attorney. You may:
- wish to be free of the day to day demands of financial paperwork and record keeping
- want to place funds in a secure account with interest calculated daily and flexible access
- not wish to burden a family member or friend with the responsibility of looking after your financial affairs
- find the demands of financial management have become too much for you to handle on your own.
Do you still need a Will? Absolutely.
Power of attorney does provide you with someone who can take the major decisions off your hands; but having a Will in place first means that the important parts of your estate are going to be looked after according to your direct wishes, your values and your intentions. It’s always important to have a Will in place that can provide directions around your assets and beneficiaries, to ensure that what you wanted will happen and that the people and causes you care about are going to receive the right gifts, bequeathments and endowments.