Enduring Power of Attorney – financial & legal

A General and/or Enduring Power of Attorney is a legal document that allows you to appoint someone you trust to manage your assets and make financial decisions on your behalf if you are unable to do so yourself.

A general power of attorney allows an attorney to make decisions about your financial and legal affairs and is often used by people who want to appoint someone to look after their affairs while they are on holidays or physically unable to manage their affairs. A general Power of Attorney ceases on the earlier of the end date or if the appointor loses mental capacity to make decisions.

An Enduring Power of Attorney authorizes an attorney to act even if you lose the legal capacity to manage your own affairs. Your attorney can make decisions about your financial and legal affairs and the document remains effective if you lose capacity due to unsoundness of mind.

Decisions an attorney can make include, selling your house, operating your bank accounts, and buying or selling shares on your behalf.

You can choose when the power will commence for example immediately, when you lose your capacity to make financial and legal decisions, or on a specific date. The document may also specify how you wish your attorney to exercise their powers.

A power of attorney cannot be used to make health care and lifestyle decisions. Your attorney is legally bound to act honestly at all times and in your best interest. A power of Attorney ceases on death or can be revoked.

Appointment of Enduring Guardian

An Appointment of Enduring Guardian enables you to appoint someone you trust to make lifestyle and healthcare decisions on your behalf when you are not capable of doing this yourself. You choose which decisions you want your enduring guardian to make.

An Appointment of Enduring Guardian covers many powers, for example to decide where you live, what health care you receive, what other kinds of personal services you receive, to consent to carrying out medical or dental treatment. You may also add additional powers or limitations to this document if you wish.

It is important to note that your guardian can only make decisions if you lose the capacity to make those decisions yourself.

It is important to remember that an attorney cannot make decisions in relation to your healthcare and lifestyle and a guardian in turn cannot make financial and legal decisions.

Legal Capacity

In order for these documents to be put implemented, you must have the necessary mental capacity to legally execute them. That is, you must be able to understand the nature of a document and its effect.

If a person cannot understand the nature and consequences of a legal document or is unable to communicate in any way, they are regarded as having legal incapacity.

Once you lose mental capacity through an accident, illness or the aging process, you cannot implement any of these documents, so it is never too early to have these documents prepared.

Who should you appoint

These documents are very powerful and important documents and it is important that you appoint someone that you trust as they can be misused by the person you appoint.

It is common for a person to appoint their spouse or partner, adult child or a close friend, or someone else they trust to manage their affairs responsibly.

The person you chose to manage your financial and legal affairs can be different to the person you chose to take manage your health care and lifestyle decisions.

You should ensure the person you appoint has the necessary skills to manage your financial and legal affairs and the relevant knowledge of your personal preferences when it comes to making your health care and lifestyle decisions.

Varying and revoking powers

If you still have the required mental capacity you can revoke or vary these documents at any time and change the person you appointed.

You can limit the scope of the power of the appointment pursuant to any of these documents. You can also include directions about how they are to exercise their powers.

Registration

Each State and Territory has its own legislation regulating registrations.

In NSW, the power of attorney only needs to be registered if

your attorney will be dealing with Real Property (real estate).

If you have any questions please contact Kristie Krainz on 02 49209255 or info@burnskrainzlegal.com.au

Buying a property is one of the biggest purchases of your life, so it is important to ask the right questions not only to the estate agent but also to your lawyer/conveyancer.

You should consider asking the following questions to the estate agent:

How long has the property been on the market: If a property has been for sale for a long time, ask the agent why the property isn’t selling? Is there a problem with the property that other purchasers may have found? Is the price too high?

Why is the owner selling: Knowing why the owner is selling can be helpful for many reasons for example, if the owner needs a quick sale they may accept a lower price? Or if the owner is in no rush to sell, the negotiating process may be tougher.

Has the property been recently renovated: If the property has had a recent renovation or major works carried out, it is important to find out exactly what has been done, what year, whether the works were council approved and if the vendor holds insurance under the Home Building Compensation Fund.

How old is the property: If the property is less than 6 years old, the vendor should provide you with a copy of the insurance certificate under the Home Warranty Insurance Scheme. This covers any major defect. If the property is older, there may be more upkeep, or even works which need to be carried out, which can be costly. Obtaining a building inspection report is always a good idea and will give you a good indication of the quality of the property you are purchasing.

What is included in the sale: It is important to find out what inclusions and exclusions are in the sale. Is the vendor taking anything with them that would usually be included? For example, if there is a pool, is the pool equipment included.

Services available: It is important to know what services are available to the property such as is it sewer or septic, does it have gas, electricity, town water, telephone or internet access.

How much are the rates: It is important to know how much the council rates are, water rates and if purchasing a unit, the strata levies. This will give you an indication of whether you can afford the ongoing expenses of the property.

Location: Research the location, are you happy with the suburb. Which way does the property face? Is there shops, schools and public transport nearby?

Have any offers been made: The agent may give you an indication of what price the vendor will consider. They should also tell you if there have been any offers and if there has been a lot of interest in the property.

When would settlement be: When does the vendor want to move out of the property, this will give you an indication when completion will take place. They may want a quick sale or may want to delay settlement until they find another property. If there is a tenant in the property, when does the tenancy expire.

Property affectations: Is there any affectations that affect the property. For example, is it in a flood zone, bush fire zone or mine subsidence area. Some affectations may affect the price of insurance.

You should consider asking the following questions to your Lawyer or Conveyancer:

What qualifications do you have: It is important to ensure that the person undertaking the legal work on your behalf is qualified to do so. Are they a qualified Lawyer or a Conveyancer. Don’t be afraid to ask how much experience they have in conveyancing and property law.

Legal fees and disbursements: Always ask the costs, get a quote on the legal fees and disbursements. Unless a fixed fee is given it can be often hard to get an exact quote until your lawyer sees the contract, as the cost of post-exchange property searches can differ between councils. They should be able to give you an exact on the legal fees and a good estimate on the disbursements. Ask them what the maximum cost will be.

How long is the process: You should ask your lawyer to explain the process to you. Your contract will have a settlement date so once contracts have exchanged, you will have to wait until the matter settles. After exchange of contracts, it is very much a waiting game. If you are aware of the process, you will not be surprised, and you will understand exactly what your lawyer is doing to complete your purchase.

Do you handle everything: Ask what the quote includes? Most quotes will include dealing with your bank and some may include arranging for pre-contract inspections such as pest and building. All should include dealing with the matter up until the day of settlement.

This is not an exhaustive list. There are many other matters to consider when purchasing including, can I afford this property? Overall, you should adopt your own research. Each property is different and as it is the biggest purchase of your life, it is important that you are satisfied with the property that you are buying.

For further information please contact

Kristie Krainz

Principal Lawyer

T: 02 49209255

Email: kristie@burnskrainzlegal.com.au

If the deceased had a valid will.

Probate

Probate is a grant by the Supreme Court certifying that the Will of the deceased is valid and is the last will and testament of that person. Once Probate has been granted, the Probate document that is issued by the Court acts as proof that the executor has the authority to deal with and administer the estate.

There is no legal requirement to obtain a grant of probate in every deceased estate. However, some estate assets cannot be transferred or distributed to the beneficiaries until a grant of probate from the Supreme Court is obtained. It depends on the type, size and value of the deceased’s assets. For example, real estate that is held solely by the deceased person or is held as tenants in common with another person will always require a grant of probate in order to deal with it.

Applying for Probate

The Executor of the Will is the person responsible for applying for a grant of probate. The application is made to the Supreme Court for that state for each grant. Whilst an executor can apply for probate themselves, due to the legal complexities involved with the grant, the executor usually employs a lawyer to carry out the process. The executor will need to assist the lawyer with information about the deceased and their assets in order to assist the process.

The legal costs and Supreme Court filing fees for making an application for probate is determined by the gross value of the estate assets. This does not include assets that are held as joint tenants with another person.

The Process

The lawyer or applicant submits a Notice of Intention to Apply for Probate on the Supreme Court online probate system. This serves as notice to anyone who may have a more recent Will to allow them to come forward before probate is granted and the assets distributed. It also provides notice to creditors in case the deceased had outstanding debts.

After 14 days from the date of publication of the Notice, the executor or applicant may apply to the Supreme Court for an Application for a Grant of Probate.

A grant of probate is usually issued within 1-4 weeks of the application being filed, unless the Supreme Court requires additional information. Once probate has been granted, the executor or applicant will receive the Original Grant of Probate with the Court Seal.

The executor will then be able to deal with the deceased’s assets. A certified copy of the probate document will be required as proof of the executor’s authority in dealing with the estate assets. The executor can then arrange to wind up the estate by collecting the deceased’s assets, paying any debts and distributing or transferring the assets to the beneficiaries. A lawyer usually helps with the process of estate administration and any costs involved will be paid out of the estate.

If the deceased did not have a valid will

When someone dies without a valid will, they are said to have died intestate. In this case, it is not an application for probate but an application to the Supreme Court for a grant of Letters of Administration. Usually the grant is made to the next of kin of the deceased as the administrator of the estate. If there is no next of kin or no suitable person the Court can appoint a third party to act as administrator.

When a person dies intestate the estate assets must be distributed pursuant to the relevant legislation in each State. Therefore, Letters of Administration is granted by the Court to certify that the administrator has the authority to manage and deal with the estate where there has been no valid Will.

Questions

If you have any questions or require any further information please contact

Kristie Krainz

Principal Lawyer

T: 02 4920 9255

E: Kristie@burnskrainzlegal.com.au