If a person loses cognitive capacity to make financial decisions, a relative or friend may step in to manage their finances for them. This is made a lot easier if the relative or friend has been appointed under a Power of Attorney document.
In NSW, a Power of Attorney is a legal document in which a person (referred to as the principal) can appoint a person to manage your assets and make financial and legal decisions on your behalf. The document is proof of authorisation for the attorney when they go to access the principal’s bank account or sell their assets. Without the Power of Attorney document, it may be impossible to deal with the principal’s assets and money.
Power of Attorney documents have long been used by attorneys to manage the principal’s bank accounts. Recently, in response to raising awareness of elder abuse, banks have started cracking down on how Power of Attorney documents are used.
In particular, paying attention to how multiple attorneys are appointed.
In the Power of Attorney document, the principal can appoint more than one attorney. Such an appointment may be:
- Jointly: meaning that all actions must be taken by the multiple attorneys together; or
- Jointly and severally: meaning that the attorneys can act jointly but can also act independently of each other.
Previously, where attorneys have been appointed jointly, they have still been able to operate the principal’s online bank account separately or have individual bank cards for the principal’s bank accounts.
However, we are now seeing banks refusing to allow attorneys to operate online bank accounts or have bank cards as the bank is unable to confirm that all transactions have been made by the attorneys jointly. This can be an obstacle for attorneys if the bank requires them to do all transactions at a branch and with all attorneys present and consenting.
For those people who already have a Power of Attorney in place, it may be a good time to review your appointment and determine whether you need to update your documents.
Our estate planning solicitors are available for an appointment to review your estate planning documents, including Powers of Attorney.
