The Importance of Power of Attorney in Western Australia
A Power of Attorney (POA) is a legal document that allows you to nominate someone to manage your financial and property decisions on your behalf. In Western Australia, the individual you choose to nominate is known as the ‘donee‘, while you are referred to as the ‘donor‘.
Different types of POA can cover decisions such as operating bank accounts, paying bills, managing investments, and handling real estate transactions. Some can extend to health or lifestyle decisions, but it remains crucial to ensure your financial affairs are handled according to your wishes if you cannot do so for yourself.
Types of Powers of Attorney
Understanding the different types of Powers of Attorney available in Western Australia is critical for making informed decisions regarding your future financial management. There are two primary types of Powers of Attorney involved with Real Estate Power of Attorney under the Transfer of Land Act and Enduring Power of Attorney.
Power of Attorney under the Transfer of Land Act
This Power of Attorney is appropriate in situations where you need someone to manage your financial affairs temporarily in regard to real estate. This type of POA is only valid while you have the capacity to make your own decisions. It is often used for specific time periods, such as when you are travelling overseas or recovering from an injury. The donee can act on your behalf only for the time period, task, or circumstances you have specified. For example, you might authorise your donee to handle your purchase of sale of your property whenever you are out of the country. However, this Power of Attorney ends if you lose decision-making capacity, making it ineffective and not suited for long-term planning.
Enduring Power of Attorney
An Enduring Power of Attorney differs from a Power of Attorney under the Transfer of Land Act in that it remains in effect even if you lose legal capacity. This makes it critical for long-term planning, by allowing you to appoint someone to manage your financial and property decisions when you can no longer do so.
You can only create an Enduring Power of Attorney while you still have decision-making capacity, and you can specify when it should come into effect whether that be immediately or only upon losing capacity. The flexibility that an Enduring Power of Attorney offers ensures that your financial affairs are managed according to your wishes. This provides peace of mind that your interests are safeguarded even in the event of incapacity.
What is Capacity, and why is it important?
In this context, the term ‘Capacity’, refers to the ability to make your own decisions. It is a critical concept in the context of Powers of Attorney, as both types require the donor to have decision-making capacity at the time of creation.
Generally, you have decision-making capacity if you can understand the information relevant to a decision, retain that information, weigh it as part of the decision-making process, and communicate your decision.
Loss of capacity can occur due to accidents, illnesses, or the effects of ageing. By executing an Enduring Power of Attorney you can ensure that your financial matters are managed appropriately even if you do lose capacity.
Understanding Powers of Attorney
Who Can Be Appointed?
In Western Australia, you can appoint anyone over the age of 18 who has the legal capacity to make their own decisions as your donee. This can be a family member, friend, lawyer, accountant, or trustee agency. It is crucial to choose someone reliable, who understands the responsibilities involved and agrees to take on the role.
Can I Have More Than One Attorney?
Yes, you can appoint up to two donees to act on your behalf. You can also nominate a substitute for each donee in case one of them is unable to continue. When appointing multiple donees, you can authorise them to make decisions jointly, individually, or a combination of both, depending on your preferences and the nature of the decisions to be made.
What Happens If You Lose Capacity and Don’t Have an Enduring Power?
If you lose capacity without an Enduring Power of Attorney in place, the State Administrative Tribunal (SAT) can appoint a guardian to make personal decisions for you and an administrator to manage your financial matters. This is a last resort, as SAT prefers to use the least restrictive option available. The appointed guardian or administrator may be a family member, trusted friend, or, if necessary, the Public Advocate or Public Trustee.
A Power of Attorney is an essential legal tool for ensuring your financial and property decisions are managed according to your wishes in Western Australia. By understanding the types of POAs available, the concept of capacity, and the responsibilities involved, you can make informed decisions about appointing a trusted individual to act on your behalf. For more information about this visit the Western Australian Government site.
This foresight can provide peace of mind and protect your interests, ensuring your affairs are handled appropriately even in unforeseen circumstances.
For further information, Vicki Philipoff Settlements is here to help, feel free to contact us today!
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