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Power of Attorney

Hamish Pryde • May 28, 2012

We all should have a Power of Attorney â€" Have you?

I was asked today," Can a power of attorney see the financial statements?" Like most replies to these questions I answered, it depends.

Firstly, what is a Power of Attorney?

Power of attorney is an authority by which one person (the "donor") gives authority to someone else (the "attorney") to act in their name.

Why use it?

The idea of someone else being able to sign your cheques, sell your property, read your business financial statements would be a severe breach of your privacy and independence. However, if your health deteriorates or you go overseas and are unable to run your own affairs, having someone else to help who you trust is the best option.

Many people think their partner will be able to step in automatically but that is not the case. Even if you have been married 30 years, your spouse will not be able to deal with any accounts, policies or possessions if they are in your own name. They would need to go to court to be given that power. This could take months and cost thousands of dollars.

The best option is to arrange a power of attorney in advance. This needs to be done while the donor's mental capacity and judgment still allows them to understand what they are doing.

Types of power

There are two broad types of powers: "ordinary" and "enduring".

Ordinary powers are best used for temporary purposes â€" for example if you're going overseas and want someone to be able to send you cash from your accounts or to pay bills here.

Most advisers recommend an " enduring " power of attorney for longer-term protection. This works after you have become mentally incapable, while an ordinary power would lapse.

Enduring powers of attorney can relate to property or your personal care and welfare. One attorney can act in relation to both property and care and welfare.

Revoking an enduring power of attorney

You can vary, suspend or revoke an enduring power of attorney while you are still mentally capable.

Being a Power of Attorney .

You must act in the best interests of the donor. You must keep records of each financial transaction entered into under the enduring power of attorney while they are mentally incapable.

Therefore, to answer the question - if the Power of Attorney in relation to property has been activated, then it is important that the power of Attorney can see the financial statements. The power of attorney has a duty to ensure they have all the information needed to base decisions in the best interest of the donor.

Hamish Pryde

Coombe Smith (PN) Limited

By Hamish Pryde September 11, 2024
Paper is everywhere. We spend a lot of time and money moving paperwork around. But with today’s technology it is now possible to get rid of paper entirely. Digital documents are simpler, easier to store and send, more searchable and permanent. How long does it take to post a document to somebody via the ole stamp and envelope method, that is snail mail? It is more efficient and timelier to email the document. How many times do you go to print a document at home and find that your printer has run out of ink? Why do we still hold onto printing paper documents? Sometimes it’s just because that’s what we’ve always done and let’s face it change can be difficult at first. Paper alone is cheap. But when you start paying for printers, toner, servicing and maintenance, paper starts to look more expensive. Let alone the storage cost. Paper tax records for seven years can be quite a few boxes of paper. We have embraced some paperless technology as part of a modern business practice. This includes digital signatures, digital collaboration, paperless minutes of business improvement and coaching meetings, electronic work papers and my new digital notebook which I am enjoying. We send questionnaires via email to you to gather vital information to enable us to prepare your annual financial statements. This is a PDF document. Instead of printing the questionnaires you could save the document down into a folder of your choice then edit the PDF document and return to us. How do you edit a PDF document you ask? Once you have opened the document the Adobe online editor lets you do some things for free. The online editor works in any web browser and lets you add text, sticky notes and highlights. Click on the fill & sign button to the right of the document, then in the top toolbar click Iab text button. You can add text directly on the PDF document. Have a try next time you have a PDF document open. Xero and Farm Focus users can attach invoices directly to the transaction loaded into Xero. Then if you are looking at the rates expense in the profit and loss account or farm working account, you can drill down into the rates code and see the transactions. Then attached to each transaction is the rates invoice if you use this great functionality. All invoices can now be stored in the cloud. So why paperless? Productivity - electronic documents are instantly and simultaneously available to everyone who needs them. Reduce waiting times with less risk of loss or damage. Cost savings - you will save money on printing, postage and associated costs. You could pay less rent because you won’t need all that space for your files. Security - electronic documents are more secure than printed ones. Digital records can be password protected and rendered unreadable through encryption. Printed documents are only as secure as their proximity to a copy machine. Reduced Clutter - paperwork on desks and shelves are not only untidy it’s inefficient too. The organisation of digital files is simpler and your office will look much neater. That will help you clear your mind to focus on your business. Environmentally friendly - less printing means fewer trees cut down for pulp and less energy used to make and transport paper. Disaster recovery - if there is a fire or flood, recovery from the backup is much easier with digital storage them with paper. There are great help articles available in Xero or Farm Focus if you are not attaching invoices to payments already. To find out how click on the links below: If you would like to explore ways you can go paperless we can help.
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