Why are Enduring Powers of Attorney important?

Dean Claughton

A Power of Attorney is a legal document, usually prepared by a solicitor, which appoints one or more people that you trust to manage your legal and financial affairs. It allows your attorney to operate your bank accounts, pay your bills and buy and sell property (if it’s being used to buy and sell property, it needs to be registered at the titles office first). It operates if you are unable to manage your financial affairs yourself.

The difference between a General Power of Attorney and an Enduring Power of Attorney is easy enough to explain – a General Power of Attorney can only operate when you have your capacity, while an enduring Power of Attorney continues to exist once you lose your capacity. For example, if you are going overseas for an extended period, and won’t be able to pay your bills while you are away, then you could enter into a General Power of Attorney which gives somebody else the power to pay your bills while you are overseas. You would then revoke this Power of Attorney upon your return.

On the other hand, if you want to make sure your attorney can act as your decision maker if you lose capacity, you will need to make an Enduring Power of Attorney. Whether or not you have capacity is question of discretion, but it is defined as having 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, weigh up the information to make a decision, and can then communicate that decision.

You can only make a Power of Attorney (General or Enduring) while you have capacity. If you don’t have the capacity to appoint an attorney to manage your financial affairs, someone will need to apply to the Guardianship Tribunal or the Supreme Court to have a financial manager appointed. The person appointed is out of your control and may not be somebody you want to look after your affairs. So it’s crucial to put an Enduring Power of Attorney in place now so you can choose who will look after your affairs when you no longer have capacity.  

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. In other words, everyone should consider it as you never know what could happen.

If, for some reason, you regret the choice of making a Power of Attorney or regret the person you chose to be your attorney, then you always have the right (provided you have capacity) to revoke the Power of Attorney. There are many reasons you may wish to revoke a Power of Attorney. For example:

  1. The attorney may be unable to act due their own incapacity or some other reason
  2. Your relationship with the attorney may have changed or your circumstances are different and the appointment you made is no longer appropriate

A Power of Attorney doesn’t enable a person to make medical or lifestyle decisions on your behalf. If you wish to appoint someone to look after these affairs, then you should also consult a solicitor about setting up an Enduring Guardian

Enduring Powers of Attorney need to be prepared and signed in a particular way. Before either making or revoking a Power of Attorney, it is recommended that you seek advice from a solicitor.

For more information please read our Plain English Guide to Power of Attorney or contact:

Dean Claughton, Lawyer
Phone: +61 9895 9276
Email: dclaughton@colemangreig.com.au