What is an Enduring Power of Attorney?
A Power of Attorney is a document signed by you that appoints a trusted family member or friend (referred to as an attorney), to act on your behalf to manage your financial affairs according to your wishes. Your attorney is given the authority to manage your legal and financial affairs, including buying and selling real estate, shares or other assets, operating your bank accounts and spending money on your behalf.
Depending on how you tailor your document, your attorney can act on your behalf whenever you are unable or do not want to conduct your affairs personally – for example when you are ill, travelling or simply do not wish to be burdened with the day to day management of your financial affairs.
The attorney’s power continues even if for any reason you may lose the mental capacity to manage your own affairs. If you lose your mental capacity you cannot revoke the power of attorney. If you want the power of attorney to cease if you lose your mental capacity, you should discuss with us appointing a General Power of Attorney.
You can tailor the document so that it is becomes operational:
- Immediately the appointment is accepted by your Attorney (by signing the document);
- Once a medical practitioner considers that you are unable to manage your affairs, and provides a document to that effect;
- Once your attorney considers that you need assistance managing your affairs; or
- Once any other event specified by you occurs.
Should you no longer be able to manage your financial affairs and you don’t have an Enduring Power of Attorney, the NSW Civil & Administrative Tribunal (formerly the Guardianship Tribunal) has the power to appoint a financial manager to make these decisions for you.
This is a costly and expensive process and the person appointed may not necessarily be someone you would have chosen. This can cause unnecessary stress and can potentially cause considerable conflict and anguish among your loved ones.
By making an Enduring Power of Attorney, you can have control over this appointment.
Your spouse or partner is diagnosed with Alzheimer’s disease and you need to downsize the family home both to raise money for treatment and to be closer to medical amenities. Since the family home is in joint names and your spouse or partner no longer has the mental capacity to make financial decisions or sign documents, in the absence of a Power of Attorney, you would need to apply to the NSW Civil and Administrative Tribunal (NCAT) or Supreme Court for appointment as your spouse’s financial manager. This is a costly, expensive and stressful process that can be avoided simply by appointing an Attorney.
Your appointed attorney cannot make decisions about your lifestyle or health – these decisions can only be made by a Guardian – either an Enduring Guardian appointed by you or a Guardian appointed by the New South Wales Civil and Administrative Tribunal or the Supreme Court.
See further information in our fact sheet “What is an Enduring Guardian?”