Gerneral Overview

This information discusses what a Power of Attorney is and how one is appointed. Please note that this is general advice only, and you should seek specific legal advice that best suits your situation.

What is a Power of Attorney?

A Power of Attorney is a legal arrangement that allows someone to make decisions on your behalf when you're unable to do so yourself. This can include managing your finances, property, and other legal or personal matters. While there are standard templates available, you can tailor the document to clearly outline what your appointed person is permitted or not permitted to do.

Types of Power of Attorney

General (Non-Enduring) Power of Attorney:

A General Power of Attorney is:

• Effective only while the principal retains decision-making capacity.
• Typically used for temporary or specific purposes, such as handling transactions while travelling or during short-term incapacity.
• Can end in any of the following circumstances:
  • It is cancelled
  • The principal dies or becomes what’s deemed to be mentally incompetent
  • ]The Attorney dies or becomes what’s deemed to be mentally incompetent
  • The Attorney resigns as Attorney
  • The Attorney becomes bankrupt (only in some states)
  • The expiry date in the document has passed

Enduring Power of Attorney

The main difference is that an Enduring Power of Attorney can still make decisions on your behalf if you were to lose mental capacity – whereas a General Power of Attorney cannot.

It is commonly used for long-term planning to ensure financial/legal matters continue smoothly. The scope of authority is defined in the document and may be tailored with limitations.

Duties of an Attorney under a Power of Attorney

An Attorney appointed under a Power of Attorney must always act in the best interests of the principal. Their duties include:

• Acting honestly, diligently, and in good faith.
• Making decisions within the authority granted by the Power of Attorney.
• Avoid conflicts of interest and not use their position for personal gain.
• Keeping accurate financial records and keeping the principal's money and property separate from their own.
• Where possible, consult with the principal to ensure their wishes are respected.
• Comply with any conditions or limitations in the document and relevant state legislation.

The benefit of having a Power of Attorney

By appointing a Power of Attorney, depending on what powers you give, you will have representation if you fall ill, have an accident, or are otherwise unable (or unwilling) to manage your own affairs at any time throughout your life.

What does it mean for your banking?

It depends on the type of Power of Attorney you have appointed, and the instructions (if any) set out in the document. They could have as much or as little access to and control over your banking as you allow.

To give a Power of Attorney access to your bank accounts, or if you hold Power of Attorney for a Central Murray Bank customer, please get in touch with us, and we can help you with the process. Depending on the state in which the Power of Attorney document is issued, there are different requirements. However, we need the original or a certified copy of the document (certified on each page) and a completed CMB Signatory form. Usually, the Attorney can sign on the principal’s behalf.

What happens if you don’t have Power of Attorney?

If you don't have or want a Power of Attorney, you can add a signatory (or Authority to Operate) to your CMB account. However, a signatory to your account is more limited in what they can do.

Eligibility and other considerations

Anyone can be a Power of Attorney – as long as they’re 18 or over, are not bankrupt, and are deemed to have ‘normal’ mental capacity. This means they understand the consequences of the decisions they make.

Generally, it’s someone you trust unreservedly to have your best interests at heart. Often, it’s a spouse or family member, friend, accountant, or lawyer. 

The important thing to remember is that both you and your Power of Attorney understand the general nature of your decisions and that you make them freely. 

Power of Attorney and financial abuse

A power of attorney can be a great way to ensure your financial affairs are managed. In many instances, appointing a POA can protect individuals and their finances and enable them to continue to manage their affairs should something unexpected happen. However, these powers can be misused, and in certain situations, some people may be at a higher risk of abuse.

We are able to provide general advice only and won't be able to tell you if appointing a Power of Attorney is best for your circumstances. Consider getting legal advice if you have concerns or questions. You can also find more resources on financial abuse here. 

How to appoint a Power of Attorney?

The process can depend on where you live — it’s managed at the state level. Find out more from the relevant agency in your state or territory

Financial Management Orders

Financial management orders give someone else the ability to make finance and property related decisions. A financial management order may be appointed by a Tribunal or Court when a person is considered incapable of managing their affairs, where, for a power of attorney, you need to be mentally capable of understanding the nature of the appointment.

NSW                 Financial Management Order                  NSW Civil and Administrative Tribunal (NCAT)

Victoria           Administration Order                                   Victorian Civil and Administrative Tribunal (VCAT)