What is a Power of Attorney?

Published On: 27 July 2023

Occasionally you may need someone to act on your behalf if you are away (or incapacitated) for financial or legal reasons. Every now and then a contract of Sale is executed with a Power of Attorney.

What is a Power of Attorney (POA)?

This is a legally-binding document that gives a person the power to act on your behalf. That person does not need to be a lawyer, just someone you trust.

For example, the document can give your nominated person the power to buy and sell your things for you, or to operate a bank account for you.

The person you appoint to act on your behalf is known as the ‘Donee’.

The person giving the authority (you) is known as the ‘Donor’.

What is the difference between the two types of POA?

General POA

A General POA is created for a specific reason – and for a specified time.

For instance, a General POA could be created ahead of time if the seller will be travelling and unable to sign documents.

A General POA ceases when you die, or become legally incapacitated, or is revoked/cancelled by the Donor.

Enduring POA

If you wish to have a person act on your behalf either immediately, or in case you become legally incapacitated, you need to make an Enduring POA.

An Enduring POA can ensure that your financial affairs are looked after by someone you know and trust.

This type of POA will operate upon signing by all parties and continue to be valid if you become of unsound mind, or unable to communicate, for example after a stroke.

Some Enduring POAs only come into effect once the Donor is mentally and legally  incapacitated, in this case a letter from the person’s regular doctor will be required to enable the Donee to act on their behalf, Particularly for property transactions.

When and why would I need one?

Often a seller who enacts a POA is indisposed either physically, mentally, or unable to sign documents for a period of time.

When entering into a POA it is essential that you trust the person you are nominating to act as your Donee. Once the document is signed, the Donee will be making legal and financial decisions on your behalf.

Please note that you cannot make a POA after you become legally incapacitated.

Who can help me prepare a POA?

A Solicitor is the best person to arrange a POA, this will ensure that it is prepared correctly for your purpose. They will also discuss whether further documents are required, such as an Advanced Care Directive, that gives your nominated person the right to make decisions about your welfare and medical treatment. They can also prepare your Will.

Do I need to register a POA?

If the POA is required to deal with property transactions, then, yes, the ORIGINAL completed POA will need to be deposited with Land Services SA. There is a fee charged for the deposit of the POA.

Land Services SA (LSSA) will check the POA and any doctors’ letters (if required) for correctness.  Once registered, the Donee will be able to use this document for future real estate transactions.

How long is the POA valid for?

An Enduring POA is valid for the lifetime of the Donor. Once they die, the POA document is no longer valid and the Will takes over.

Depending on the type of ownership of the property, Probate of the Will may be granted to the Executor of the Estate, and they can make legal decisions in accordance with the Will.

What if I don’t have a POA?

If you have not made an enduring POA while you have legal capacity, your relatives may not be able to handle your affairs. They may need to apply to the SA Civil and Administrative Tribunal (SACAT) for an Administration Order.

An Administration Order is how SACAT authorises another person to make decision and manage financial matters for someone with a mental incapacity who cannot make certain decisions about their financial matters.

What if I’m the Donee?

If the person who gave you an Enduring POA becomes legally incapacitated, you must continue to act for that person.

If you want to give up that power, you must arrange to have it removed by the Supreme Court, or have an administrator appointed by SACAT.

If you continue to act, you must keep full and proper records of everything you do and act in the best interests of the person who gave you the power.

If you need any help with Contracts signed under Power of Attorney, please contact Strathalbyn Conveyancing.