Your mum just had a stroke, she can't speak, can't sign documents, and you, her devoted child, legally can't access her bank account to pay her bills. The power's about to be cut off and there is nothing you can do about it. This nightmare scenario happens to Australian families every single day, and it's one hundred percent preventable with one simple document most people ignore until it's too late. Today, I'm breaking down exactly what a power of attorney is, why you need one yesterday, and how to set it up the right way. Stay with me. This could save your family from absolute chaos. So grab a coffee, settle in, and let's demystify power of attorneys together. So what is a power of attorney? Sorry, it's catching up. Grab your coffee, settle in, and let's demystify power of attorneys together. All right, let's start with the basics. What actually is a power of attorney? Simply put, a power of attorney, or a POA as we call it in the legal world, is a legal document that allows you to appoint someone you trust to make decisions on your behalf. Think of it as giving someone the legal authority to step into your shoes when you can't be there for yourself. I often refer to this as the business end of your life as opposed to like the health end of your life with another document called Enduring Guardianship which we'll cover another day. Now, having a power of attorney is not about giving up control. It's about being smart and prepared because life is unpredictable, right? Accidents happen, illnesses occur, and sometimes we travel overseas or we're just physically unable to handle our own affairs for a period of time. A power of attorney ensures that someone you trust can manage your financial, legal or personal matters when you need them to. Here's what's interesting. In Australia, we generally have two main types of power of attorney. Understanding the difference is crucial. First, there is a general power of attorney. Personally, I do not see the point of this one, but for transparency, I will still mention it. Some people consider this useful for a temporary situation. So maybe you're heading overseas for six months where you're recovering from surgery, or you're recovering from surgery and you can't get to the bank. A general power of attorney lets your appointed person, we call them your attorney, handle specific tasks like paying bills, managing your bank accounts or dealing with property matters. The key thing, a general power of attorney automatically ends if you lose capacity. So if something happens to you and you can no longer make decisions for yourself, the document is useless. Hence why I'm not a fair. Second, there's an enduring power of attorney. Not to be confused with an enduring guardianship. So this one is the big one, folks. An enduring power of attorney continues even if you lose capacity to make decisions. Yeah, you're right. This is your safety net for situations like dementia, stroke, serious accident, or any condition that affects your ability to think clearly and make decisions for yourself. With an enduring power of attorney, there are usually two categories, one for financial matters and one for personal or health matters. Some states do combine them and others keep the documents separate. We'll get into the state differences in a moment. So let me tell you a story. I have seen families torn apart because somebody didn't have an enduring power of attorney in place. Honestly, some of them have brought tears to my eyes, like literal tears to my eyes. So imagine this. Your mum has had a stroke. She can't communicate. She can't access her bank accounts. You can't access her bank accounts. The bills are piling up. Her house needs repairs. Her house needs to go on the market. And you, her loving child, can't do a single thing legally without going to court and applying for a guardianship. That process can take months. It's expensive, it's stressful, and it is completely avoidable. And as I said, I've literally been there with clients trying to sort business out. And all of them have said, just wish we had done it earlier. So hindsight is great, but unfortunately there are still people that still don't have this document. Having that power of attorney in place means that your loved ones can act immediately. They can still pay your bills, manage your investments, sell property if needed, make health decisions that align with your wishes. It's not about being pessimistic. It's about being prepared. It's about protecting yourself and the people you love from unnecessary stress and legal battles. Oops. and the people you love from unnecessary stress and legal battles. So this is probably the most important decision that you'll make. Who do you trust with this level of responsibility? Now, I can't tell you who to appoint or who not to appoint, but here are some things to consider. Your attorney should be someone who you trust completely, is responsible with money and decision-making, understands your values and wishes, is willing to take on the role, is over a team and has mental capacity themselves. Now, most people choose a spouse, an adult child, sibling, or a close friend. They are all completely fine options. You can also appoint more than one person, either to act jointly, meaning they must agree on everything, or separately, meaning they can't act independently. I can't remember what that's called. Anyway, it doesn't matter. There are pros and cons of both. And here's a pro tip. Please, please, please appoint a backup attorney because life happens and your first choice might not be available when you need them. Now I use the travel like the Royal family scenario. So, If you are all in the same car together and something happens, you possibly have just wiped out everybody that you might have appointed under that power of attorney. So please make sure either you travel more family style and you don't travel in the same car or in the same mode of transport, or you appoint people that are likely not to be together with you when you're going on a holiday or whatever it might be. One more thing, talk to the person before you appoint them. Make sure they're comfortable with the responsibility and understand your wishes because not everybody wants this role. Now, Australia doesn't have a one-size-fits-all approach to a pair of attorney. Each state and territory has its own rules. So let's break it down real quickly. New South Wales, you'll create an enduring pair of attorney for the financial and legal matters and a separate enduring guardianship for health and lifestyle decisions. I touched on that earlier, and I think it's probably best if I clarify what an enduring guardianship is in a different podcast. In Victoria, it's similar to New South Wales. So you have an enduring power of attorney for the financial staff and you have an enduring power of guardianship for personal and medical decisions. In Queensland, you can create an Enduring Power of Attorney that covers both the financial and personal matters, or you can split them. You can also have the option of an Advanced Health Care Directive for specific medical wishes, and it can also be available in other states as well. In South Australia, you'll use an Enduring Power of Attorney for financial matters and Advanced Care Directive for health decisions. In WA, an enduring power of attorney covers their financial stuff. And Enduring Power of Guardianship covers the personal and medical decisions. Now, I'm saying the documents are very, very similar, but please note each state is different. So they might have the same name, but what the forms are are difficult. Sorry, but what the forms are are different. So make sure you definitely have the right one. In Tasmania, you have an Enduring Power of Attorney for the financial staff, Enduring Guardianship for the personal and medical decisions. In the Northern Territory, you can create an advanced personal care, sorry, in the Northern Territory, you can create an advanced personal plan that covers both the financial and the personal decisions. In the good old ACT, you'll use an enduring power of attorney for the financial and property matters, and you can make a separate arrangement for your health decisions. So what's a key takeaway? As I said, please check your state's specific requirements. The terminology and process vary, but the underlying principle is the same. Please plan ahead. So how do you actually create a power of attorney? A POA needs to be signed up by a lawyer. It's reputable, start there. Just make sure the lawyer you pick is experienced with estate planning because not all of us lawyers are created equal, you know. And remember, you can revoke or change your power of attorney at any time as long as you still have the mental capacity to do so. But if you do this too often, it could get flagged for either elder abuse, capacity issues or something else. So let's talk about what not to do. Mistake number one, waiting too long. And this is usually the one that happens most often. Please do not wait until you are sick or losing capacity. By then, it might be too late. Don't call on the last day before legal practices close for Christmas as well because it likely won't happen. Mistake number two, not discussing your wishes. I really do want to normalize the topics of having these documents because I know a lot of people can be scared. But having your attorney know what you want and having that conversation, I promise you, makes it so much easier if something has to happen like last minute and your people know what your wishes are. Third mistake, choosing the wrong person. Seen this too. Do not appoint someone just because they are family or they may be close. Please choose somebody who is trustworthy and capable. It's not uncommon for people to have different people under their power of attorney and their enduring guardianship. There is no right or wrong answer. Mistake four, not reviewing it regularly. Life changes, relationships change. Please review your power of attorney every couple of years. And mistake five, assuming it covers everything. A power of attorney does not replace a will. You need both plus the equivalent of an enduring guardianship in your state or territory. So, all right, beautiful humans, let's wrap this up. A power of attorney is one of the most important legal documents you will ever create. It is up there with your will and your enduring guardianship. It's not morbid, it's not pessimistic, it's impairing. It's taking control of your future and protecting the people you love. So here's your action step for this week. If you don't have a power of attorney, please start the conversation. Talk to your loved ones, research your state's requirements or get in contact with your family lawyer. And if you need help, reach out to us or your lawyer to help you guide through the process. And if you are going through a separation or divorce, this is even more critical. Please make sure your power of attorney and your estate planning in general reflect your current wishes, not your old life. I'm sure that you probably do not want your ex to benefit from your estate. Some people do, majority of people don't. But if you found this episode helpful, please share it with somebody who needs to hear it or who's maybe been dragging the chain on their estate planning. Please also make sure you subscribe to The Stacey M Show wherever you listen to our podcast and leave me a review. It helps much more people. Sorry. It helps more people find us so I can help more of you lovely humans. But until next time, remember, you've got this. You're stronger than you think. And I'm here cheering you every step of the way. Take care and I'll see you next time. P.S. Go get your estate planning sorted before Christmas. See ya.
