If you don’t have a valid Power of Attorney document, it’s time to consider what the consequences of that may be.

Imagine a situation where you are alive but not able to communicate with a loved one. You can’t pay your bills, manage your property or enter into contracts. When a person is incapacitated and does not have a power of attorney, they cannot manage their affairs nor can anyone else. This would be a disaster for most people and their families, causing stress at an already difficult time.

Do I need a Power of Attorney in NSW?

It depends on the reason. A general power of attorney is useful for short term item specific tasks when you are not available. E.g. If you need to sell or buy property, access or manage bank accounts, sign legal documents and enter contracts if you are abroad. If you wish for your power of attorney to keep operating after you lose capacity (which we highly recommend), you will need an enduring power of attorney.

Is it necessary to have an enduring power of attorney?

Overall, having a valid enduring power of attorney is essential and continues operating after you lose capacity. If you do not have an enduring power of attorney, your estate, property and bank accounts are frozen until a court appoints a financial manager under a financial management order.

What is a financial management order?

A tribunal or a court appoints a person (financial manager) to make financial and legal decisions on your behalf.

A court or tribunal will usually appoint the NSW Trustee and Guardian as the financial manager of the last resort. The NSW Trustee and Guardian can sell and manage your property, including selling it on your behalf if it decides to, and can charge ongoing fees as high as 1.4% of the value of your assets.

How much does a power of attorney cost?

Enduring Powers of Attorney are a sound long term estate planning tool. When faced with a lengthy legal battle and ongoing fees and charges of NSW Trustee and Guardian you could be spending thousands in ongoing fees.

Estate planning solicitors, who deal with enduring power of attorneys are best placed to advise you on how best to protect your estate. Obtaining estate planning advice far outweighs, the cost, stress and legal fees in removing the NSW Public Trustee and Guardian.

Making an Enduring Power of Attorney vs Appointing NSW Trustee and Guardian as Financial Manager

The benefits of making an enduring power of attorney is that you have control of your assets and when you lose capacity. You nominate a trusted person to manage your legal and financial affairs, your way. We have summarised the top 3 benefits to making an enduring power of attorney in New South Wales here:

Going to Court is stressful – If you don’t want to make an enduring power of attorney and you lose capacity, the NCAT Guardianship Tribunal will appoint the NSW Trustee and Guardian. To remove the Trustee the legal process can be quite difficult to navigate, with various timelines and rules that must be followed in order to have a successful outcome.

Going to Court takes timeYou will need to appear before the court or tribunal, often by phone to provide evidence. Your attorney will need to submit medical reports and any other evidence the tribunal/court may require. Usually there can be several court events (directions hearings) before a final hearing, all adding extra costs and delay at an already difficult time.

Going to court is uncertain – There is also no guarantee that you or any other person you believe is suitable will be appointed as the financial manager, and the tribunal may appoint the NSW Trustee and Guardian if there is a dispute between your family or friends. The court or tribunal makes its own decision, and although it can be appealed, it adds more stress, costs, uncertainty and delay.

Legal Representation at NSW Guardianship Tribunal

You may not be able to have a lawyer representing you or your loved one, without first making an application to the Tribunal. Permission must be sought (called “seeking leave”) in the Guardianship Tribunal, before a lawyer can represent you at the tribunal. The Guardianship Tribunal also has the power to award costs against parties.

Guardianship Division / NSW Supreme Court Legal Costs

The fees for legal representation, court filing, and other related expenses are always higher than making an enduring power of attorney and you will usually need to fund your own legal representation.

Should you lose in the NSW Supreme Court, usually the estate pays for the legal costs in challenging an enduring power of attorney, however the court’s discretion is final.

Make a Power of Attorney

We have outlined what happens if you do not have a power of attorney in place. Falzon Legal are estate planning lawyers based in Parramatta, New South Wales and can draft your enduring power of attorney so that it complements your enduring guardian and will.

Save your family the high cost, uncertainty, stress which does occur by not having an enduring power of attorney. Book your initial free call with us to discuss your estate plan and enduring power of attorney or take our quiz to test your estate plan and get your free report based on your current estate plan.

— Falzon Legal