Powers of Attorney and Family Wealth
As families grow older, planning ahead becomes essential. One of the most practical tools available is a Power of Attorney (POA), a legal document that enables a trusted person to act on your behalf. Whether it’s managing everyday financial affairs, assisting in property transactions, or preparing for the possibility of incapacity, a POA can provide reassurance and protection for both you and your family.
A POA is granted by the “Grantor” (the person giving authority) to an “Attorney” (the person receiving authority), often a trusted relative, professional adviser, or licensed entity. The Attorney may act under either a general power, which provides broad authority or a limited power, confined to specific tasks or transactions. Importantly, a POA ceases when the Grantor loses mental capacity, unless it is established as an Enduring Power of Attorney (EPA), which can be registered with the Court when required.
POAs are commonly used in situations such as:
Managing finances while travelling or living abroad.
Assisting elderly relatives with property, utilities, and investments.
Facilitating commercial banking transactions.
When appointing an Attorney, careful thought must be given. Should it be a relative, a professional or a licensed fiduciary firm? While family members may offer trust and familiarity, professional Attorneys often bring regulatory experience, insurance protection and reduced risks of disputes.
Practical considerations also matter. Different banks and institutions have their own rules for accepting POAs, some requiring original copies, translations, or updated documents. Therefore, ensuring your POA is professionally drafted and tailored to your needs is essential.
While a POA is a valuable tool, it is not a complete solution for family wealth management. Larger or more complex estates may benefit from a combination of POAs and trusts, ensuring that wealth is preserved, disputes are minimised, and family interests are safeguarded.