Power of Attorney
What is a Power of Attorney?
The Power of Attorney is a legal document used to appoint a person to manage your assets and financial affairs if you are unable to do so due to illness, an accident or your absence.
The Power of Attorney is as important for life planning as making a will. Many people prepare a will but do not give the same consideration to appointing an attorney until it is too late. Appointing an attorney gives your attorney the legal authority to look after your financial affairs on your behalf.
You can appoint an attorney to act for you in a variety of circumstances such as an extended interstate or overseas trip, or for a time when you are no longer able to manage your own affairs.
General Power of Attorney
A general power of attorney can be used to appoint someone to make legal and financial decisions on your behalf for a period of time. The following are examples of situations where you can appoint someone else to making decisions on your behalf:
- Operating your bank account for you while you are on holidays;
- Voting at meetings on your behalf; or
- Selling your house while you are in hospital.
A general power of attorney only operates when you can still make your own decisions, and ends if you have lost the capacity to make your own decisions. Each state has a different meaning of capacity; for example in NSW the standard is where a person is totally or partially incapable of managing themselves, while Victoria has multiple standards to the same effect.
A general power of attorney cannot be used to appoint someone to make personal decisions, such as health-related matters, on your behalf.
Enduring Power of Attorney
An enduring power of attorney can be used to appoint someone to make legal, financial and personal decisions (only in Queensland and Australian Capital Territory) on your behalf once you have lost capacity. The following are examples of situations where an enduring power of attorney would benefit you:
- Operating your bank account while you are in a coma; or
- Choosing the right diet and dress for you if you suffer from dementia.
An enduring power of attorney can start immediately if it appoints another person to make legal and financial decisions, not for personal decisions. The power for someone else to make personal decisions starts once you have lost the capacity to make decisions for yourself.
It must be noted that some jurisdictions do not allow an enduring power of attorney to appoint someone else to make personal decisions on your behalf. For example, New South Wales requires an enduring guardian to be appointed for such personal decisions. You will need to check with each state’s requirements on the form you complete.