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Power Of Attorney: Is It Necessary?

The short answer to this question is yes. It’s highly recommended that, as a part of your overall estate planning, you put into place a Power of Attorney. It’s one of the most important safeguards you can have in place to protect your ability to make decisions.

What Is A Power of Attorney?

A Power of Attorney is a legal document through which you appoint someone you trust to act

on your behalf in regards to your property and financial affairs. The document states what the attorney is authorised to do on your behalf. This can be quite narrow and specific or as general as you wish.

Why Should I Have a Power of Attorney?

A Power of Attorney is not only useful in the situation you lose your ability to make decisions. You may be travelling overseas and want to give your attorney access to your bank accounts to pay your bills or manage your finances. Alternatively, if you become unwell or lose the ability to manage your financial affairs, having a Power of Attorney in place allows your attorney to make decisions on your behalf.

What Happens If I Lose Capacity & Don’t Have A Power Of Attorney?

If you lose capacity and haven’t made a Power of Attorney there will be no one with legal authority to manage or make decisions about your property or finances. Your family may have difficulty accessing your bank accounts to pay your bills. If you need to move into residential aged care and your home needs to be sold, only someone who has been appointed as your attorney can do this.

A relative or another person may need to apply to the Guardianship Tribunal or Supreme Court to have a financial manager appointed for you. This may not be the person you have chosen and could cause your family significant time and cost to apply to the Guardianship Tribunal.

If you’re someone who often finds it difficult to make large lump sum payments for goods or services, you may want to consider looking into “Buy Now Pay Later” services.

Buy now pay later essentially means that, rather than paying in a full lump sum payment for a product or services rendered, there may be an option to pay through instalments of a certain amount over a set period to make the sum of the full amount in total. This method should allow you to pay in full for the product or service without overly straining your finances – you pay back what you can, as agreed upon when you begin the buy now pay later service.

Some popular buy now pay later services include Afterpay, Zip Pay, Brightepay, and some credit card networks such as  Mastercard and Visa, can offer buy now pay later arrangements.

Though it can be a convenient, immediate solution, it may be challenging to juggle the necessary repayments with other financial commitments. It’s not always the most appropriate method for people, and you should bear in mind your situation and ability in paying back the amounts. 

Before you sign up, keep in mind: 

  • It becomes easier to overspend with buy now pay later services, so know your limits on what you can and can’t afford.
  • You will be charged fees and costs to use the service, which can add up to a princely sum in and of itself.
  • Keeping track of your payments can be tricky if you’ve signed up for multiple services.
  • It could affect your loan applications for a car or mortgage as lenders consider buy now pay later spending just as much as your credit score.
  • Late repayments can appear on your credit report, which affects your ability to borrow money in the future.
  • Layby can be a cheaper alternative to buy now pay later, with no account-keeping or late fees to consider

If you are someone who could make use of BNPL services, you may wish to:

  • Ensure that when using the BNPL service, you stick to a set limit on what you spend so that you can comfortably pay it back later. 
  • Aim only to have one BNPL account at a time to manage payments through, rather than confuse yourself with multiple payments across different providers.
  • Always budget for bills, loan payments and BNPL payments, and 
  • Rather than use your credit card for payments to your BNPL account, consider linking to your debit account instead.

If you would like assistance in planning your financial future, help in managing your budget or some friendly advice, see us for a chat about what we can do for you.

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John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier

David and Alison Parker

I have been consulting J L Noller and Co. (more specifically Jane) for six years and during this time I have found her to be professional, efficient and easy to discuss all accounting and taxation matters with. Her office team are all polite and friendly also.

David and Alison Parker

Business Owner

Carl Gillmore

I have used Jane & the team for the last 6 years for all of my business & personal accounting needs. They have always been professional, easy to talk to & available when we have needed assistance.

Carl Gillmore

Carl Gillmore Landscape

John Briggs

Jane Noller has been my accountant for the last 15 plus years. I can testify to Jane’s professionalism and expeditious manner in dealing with the day to day issues that surrounds our business accounting.

John Briggs

Registered Building Certifier