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A power of attorney is a legal document appointing another person the authority to make financial decisions on your behalf.
Financial decisions relate to the management of your finances (for example paying your bills, selling your home, managing your bank accounts, investing your money etc).
There are two types of powers of attorney:
A general power of attorney would be prepared to appoint a person(s) to make financial decisions on your behalf for a specific period of time or event, ie if you were going overseas and need someone to sell your house or pay your bills. It is only effective while you are still able to make your own decisions and ceases in the event you lose mental capacity.
An enduring power of attorney would be prepared to appoint a person(s) to make financial decisions on your behalf. It will remain effective in the event you lose mental capacity. You have the ability in the document to nominate whether you want the attorney to become effective immediately or only in the event of losing mental capacity.
Choosing your attorney
When you prepare a general power of attorney or enduring power of attorney, the attorney can make financial decisions on your behalf (examples set out above), and such decisions will have the same legal effect as if you had made them yourself (subject to any restrictions you impose in the document).
It is therefore imperative that the person who you appoint as your Attorney is someone you trust and who you know will act in your best interest.
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