Jack (23) is a full-time university student and employee at a local stationery store. Jack has a loan on a car which he is working towards paying off, and lives in a rental with three other students. He has an estranged relationship with his parents, however, has a strong relationship with his 26-year-old sister, who studies at the same university.
One day when Jack was driving home from work, he got into a serious car accident that left him with a debilitating injury.
Jack’s accident leaves him temporarily unable to work, study and make his own decisions, both legally, medically and financially. Fortunately, prior to his accident, via his lawyers, Jack had put in place an Enduring Power of Attorney where he appointed his sister as his Attorney in case the worst happened, and he needed support.
A Power of Attorney is a legal document that is made up as part of your estate planning documents to prepare for the unexpected. It gives a person the legal authority to make decisions on your behalf in relation to your legal and financial affairs.
A general Power of Attorney is only valid while you have capacity and becomes invalid when you die or lose capacity. However, an Enduring Power of Attorney continues to be valid even if you lose capacity to make your own decisions, though becomes invalid when you die.
It is extremely important to only appoint someone that you trust completely as your attorney, because your attorney will have the power to act on your behalf in relation to your legal and financial affairs. This includes, for example, managing your banking, signing documents and paying bills.
As Jack’s sister is his Enduring Power of Attorney, she is able to take full responsibility for his financial and legal decisions while Jack does not have capacity to make his own decisions.
Jack has a number of financial commitments that need to be regularly maintained and organised after his accident.
Jack’s sister, as his Enduring Power of Attorney, is able to continue his car payment loans and rental payments.
It is fortunate that Jack had his affairs in order prior to his accident, as if he did not have an Enduring Power of Attorney, he would not have anyone able to manage his legal and financial affairs. If Jack did not have his affairs organised, there is the possibility that someone who he would not wish to be in the position as his financial manager could apply to do so, such as his estranged parents.
In order to be appointed as someone’s financial manager, you must apply to the New South Wales Civil and Administrative Tribunal. This can often be a lengthy and complicated process, particularly if multiple people are involved.
It is therefore important you make that decision yourself by having the right documents in place and before the unexpected. To inform yourself of the options available to you, and different ways to organise your financial and legal needs, it’s recommended to speak to a legal professional.
To learn more about Power of Attorneys, reach out today for a free consultation.