Many people who have settled in Australia often need to travel between Australia and China to handle various matters, such as property transactions, banking, and so on. However, sometimes when you are in China and cannot come to Australia in time to deal with matters here, arranging a Power of Attorney in advance may be a good option. A Power of Attorney can grant someone you trust the authority to make decisions on your behalf.

Powers of Attorney are divided into General Power of Attorney and Enduring Power of Attorney. What they have in common is:

Both a general and an enduring power of attorney are legal documents that authorise an appointed person to make decisions on the principal’s property or financial affairs.

The attorney can carry out matters including but not limited to managing bank accounts, paying bills on behalf of the principal, making investment decisions, and selling or purchasing shares or property on the principal’s behalf.

The difference is that a general power of attorney is cancelled once the principal loses the capacity to make decisions for themselves, whereas an enduring power of attorney remains valid even after the principal loses decision-making capacity. The loss of capacity we refer to here may include, but is not limited to, accidental injury or sudden illness.

If an enduring power of attorney is not in place at the time capacity is lost, even relatives and close friends may not have the legal authority to make decisions regarding property or financial matters. In such cases, the Guardianship Tribunal or the Supreme Court would need to appoint a financial manager.

Things to note when establishing a power of attorney:

1. The attorney should be a person or organisation the principal trusts — one who understands the principal’s wishes, has the skills to manage finances, has no conflict of interest, and will act in the principal’s best interests.

2. The principal should consider whether they wish the attorney to be able to make decisions if they lose capacity — that is, whether to create an enduring power of attorney.

3. Arrange for the power of attorney to be signed in the presence of a qualifying witness, so the attorney can accept the appointment.

4. If the attorney needs to deal with real property matters, under NSW rules, a general or enduring power of attorney must be registered with NSW Land Registry Services.

Validity of a Power of Attorney:

The principal may specify when an enduring power of attorney takes effect, and that commencement time can be amended or cancelled at any time while the principal still has legal capacity. The power of attorney automatically ceases upon the principal’s death or bankruptcy.

However, it is important to understand that a power of attorney is no longer valid in the following circumstances:

1. The principal or the attorney dies;

2. The subject specified in the power of attorney (such as specified property) is destroyed;

3. If either the principal or the attorney notifies the other party that the power of attorney is revoked, such notice must be given in writing;

4. If the power of attorney is a general power of attorney, it ceases to have effect after the specified expiry date;

5. Where the power of attorney is a general power of attorney, it ceases to have effect once the donor legally loses capacity.

So, regarding point 3 — if you need to revoke a power of attorney, how exactly should it be done? We will go into detail about this below.

1. If a power of attorney needs to be revoked, the principal must give notice in writing

There is no specific form for revoking a power of attorney, but the principal should issue a written document to the following parties, clearly stating that the power of attorney has been revoked.

The principal’s lawyer;

Banks and any other relevant organisations or businesses;

NSW Land Registry Services (if registered).

2. Ensure all copies of the power of attorney are returned

Once the power of attorney has been revoked, any copies held by the lawyer should be returned, and copies held by any relevant organisations mentioned in the power of attorney should also be returned. The principal may also destroy the original power of attorney (or any copy), or clearly mark on the original (or any copy) that it has been revoked.

3. Deregister the power of attorney

If the power of attorney has been registered, the registration must also be cancelled at the time of revocation.

Finally

Whether drafting or revoking a power of attorney, it is important to seek professional legal advice when doing so — particularly where the principal’s financial situation is more complex. We recommend choosing an experienced firm with strong legal expertise.