Many people wonder what a power of attorney is and where it can be applied. Power of attorney is a phrase that you hear often in many different sectors of life including both finance and medical. In this article we will explore what exactly a power of attorney is and where it is applicable in matters relating to finance.
Power of attorney: Permission to act on your behalf
Power of attorney is usually a document you sign that gives a third party permission to act on your behalf and make decisions for you. This permission can relate to a specific area of your life, like your finances, and is referred to as a special power of attorney. Or it can relate to all matters of your life (for example if you become ill or incapacitated) and this is referred to as a ‘general power of attorney’.
Many people who go abroad for long periods of time, or are emigrating, often leave a trusted relative with a general power of attorney to sign any documents that need to be dealt with in relation to their property or financial affairs while they are away.
A trusted third party
When you sign a power of attorney, it’s important to ensure that the power of attorney you sign is an official legal document and that the third party you assign to act on your behalf is a trusted third party.
If you want to make your spouse or another trusted third party responsible for your financial affairs should you become incapacitated, you can sign a financial power of attorney called a durable power of attorney. This power of attorney allows a third party to perform a broad range of financial transactions on your behalf and remains in place through any incapacity, until your death – unless you revoke it. If you don’t specify the power of attorney to be ‘durable’ it may end automatically if you become incapacitated.
A financial power of attorney
If you are drawing up a power of attorney that covers your financial affairs, typical powers granted in your power of attorney include dealing with your tax, paying your normal expenses, handling banking transactions, managing property and your retirement accounts and investing your money.
Power of attorney with FinGlobal
As a premier cross-border financial services company, we work closely with our clients’ financial affairs – whether you’re moving country to start a new chapter, starting the process of financial emigration from South Africa, applying for a tax refund or looking to invest money into offshore funds as part of a risk diversification strategy. All these processes require reams of paperwork and to streamline the process our clients give us power of attorney to manage all the documentation and transactions on their behalf.
If you are a South African living abroad and would like to know more about the cross-border financial services we offer including maximising your finances through financial emigration, accessing your South African retirement annuity and our tailor-made tax solutions for South Africans around the world, contact FinGlobal today.