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The Power of Attorney is a formal legal document in which you delegate to someone the power and authority to act on your behalf. The person to whom the authority is delegated is known as your attorney.
The Power of Attorney may take either of two forms:
Most powers of Attorney are in effect the moment they are signed. As long as you are able to manage your own affairs it remains inactive. It is only when you find yourself in a situation where you are unable to handle the management of your interests or, do not want to, that the power of attorney is invoked.
It is only where the Power of Attorney is made conditional upon the happening of an event that the Power does not take immediate effect - i.e. temporarily incapacitated followed by a worsening of condition at which time the Power of Attorney may be invoked.
A Power of Attorney may be created by the use of a standard document that can be purchased from most newsagents or stationers. It can only be drawn upon when you are legally competent to do so - i.e.: of sound mind - and can be withdrawn at any time provided that you are of sound mind at the time.
Careful consideration should be given to the person you appoint as your attorney. It should be someone that you trust and in whom you have confidence. Their ability to manage you affairs in your best interests is the critical factor in your decision.
It is suggested that legal advice be obtained when drawing up a power of attorney given the complexity of the law in this area. Another consideration might be the use of a trustee company, such as the Public Trustee, in lieu of a selected individual, to provide the attorney service in an unbiased independent manner.
A Will is a written document, signed by you, the testator, and witnessed by two independent people who are not proposed as beneficiaries of the Will. The Will specifies how you want your estate to be dealt with upon your death. A current valid Will ensures that your belongings are distributed to the persons named in the Will in accordance with your wishes.
The Will must specify at least one executor, the person(s) nominated by you, the testator, to carry out the instructions as set down in your will. The executor is responsible to ensure that your estate is finalised in accordance with your wishes. It is important, when deciding upon an executor, to ensure that they possess the necessary administrative skills, are prepared to take on the job and are likely to live longer than yourself. An executor can be a beneficiary in your Will.
If you think that the distribution of your estate will be uncomplicated you might select a member of your family or a close friend as the executor. If this is not the case you may decide to appoint a solicitor or make use of the Public Trustee. This will involve a fee for the administration of your estate.
It is also possible to draw up a Will, without recourse to professional advice and help, by purchasing a blank Will form from a stationer or newsagent. This is only recommended if the finalisation of your estate is likely to be straightforward and relatively uncomplicated. If this is not the case, it would be more appropriate to make use of a solicitor, the Public Trustee or the services of a trustee company.
The possibility of capital gains tax (CGT) being payable on certain property bequests to beneficiaries when they are sold should be considered. In these circumstances it may be prudent to seek legal advice regarding the effect of taxation on your bequests.
Your Will should be secured in a safe place and a responsible person, such as your executor, a family member or your next of kin should be made aware of its location.
There may be occasion when your Will needs to be changed such as marriage or divorce, the birth and death of family members and the acquisition or disposal of assets. The legislation in various states has differing impacts on the validity of Wills. It would be sensible to obtain legal advice in these circumstances.
A verbal Will may also be made under certain circumstances. Members of the ADF can, especially on operational service, make a verbal Will.
To die without a valid Will is known as intestacy and, if this occurs, your estate will be distributed according to the intestacy rules in your state, which may not be as you would have desired and, may be more costly and time consuming than if a valid Will had been made.
Your existing Will may be revoked by destroying all copies of it and / or drawing up a new one.