Clients often ask us what the difference is between a General
Power of Attorney and an Enduring Power of Attorney. Most people
know that a Power of Attorney is a legal document appointing one or
more people or a trustee organisation to manage your assets and
financial affairs. It allows your attorney to attend to such
matters as paying bills and managing money if for any reason you
are unable to manage financial matters yourself.
A General Power of Attorney can only operate while you have
capacity to make decisions. You might want to put this in place so
that someone can look after your financial affairs while you are
traveling or you may just prefer that someone else handles your
financial affairs as the demands of financial management have
become too much for you to handle on your own.
If you want to make sure your attorney can act as your
substitute decision maker if you lose capacity, you will need to
make an Enduring Power of Attorney. This is especially important if
you are running your own business or managing your own super fund.
Capacity is the ability to make decisions and understand the
effects of those decisions. A person is said to have capacity when
the person can understand the information and choices presented,
they can weigh up the information to make a decision and can
communicate that decision.
You can only make a Power of Attorney while you have capacity.
If you lose the ability to appoint someone to manage your property
and finances, someone will need to apply to the Guardianship
Tribunal or the Supreme Court to have a financial manager
appointed. The person appointed could be a government official
rather than a relative or caring friend. It's best to prepare
for the future and choose who you want to manage your affairs.
A person may lack capacity because of dementia, injury or
illness. Anyone who has any risk of suffering a disability, injury
or illness should seriously consider putting in place an Enduring
Power of Attorney. That means everyone should consider it!
Once you have made a Power of Attorney, you can always revoke it
(i.e. cancel it) as
long as you still have decision-making capacity. There are many
reasons you may wish to revoke a Power of Attorney. For example,
your attorney may be unable to act due to their own incapacity,
your relationship with the attorney may have changed or your
circumstances are different and the appointment you made is no
A Power of Attorney does not enable a person to make medical or
lifestyle decisions on behalf of someone else. An Enduring Guardian
is the person who makes these decisions and they are appointed in a
Enduring Powers of Attorney need to be prepared and signed in a
particular way to be valid. Before either making or revoking a
Power of Attorney, it is recommended that you seek advice from a
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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If you are doing a Will, or you are the executor of a deceased estate, consider what taxes and duties could be payable.
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