A lot of people have heard of a Power of Attorney however most do not fully appreciate the extent of its power, the benefits it delivers or the types of Powers of Attorney that exist.

A Power of Attorney is a useful legal document which can authorize another person to handle your affairs in a variety of circumstances. It is of practical benefit in circumstances for instance when you are planning to travel overseas or you need greater assistance managing your affairs for reasons of health or perhaps as a result of an unexpected accident.

In this article we examine why appointing a Power of Attorney is so strongly recommended by lawyers and explain the difference between a General Power of Attorney and an Enduring Power of Attorney.

Selecting a person to act in your place

The appointment of your Attorney enables that person (or people) to act in your place, and do the things you would normally do yourself, such as signing documents, paying the bills and doing the banking. The person you choose, referred to as your Attorney, has the right to stand in your shoes when you wish them to look after your affairs. Your appointed attorney/s can enter into agreements in your name and on your behalf.

Therefore as a result of the power of the appointment it is critical that you select the right person to act in that capacity. Despite the appointed person being called your ‘attorney’, the person does not have to be a lawyer. Your attorney must be over the age of 18 years. It is essential you appoint someone you can trust who will act in your best interests

The difference between a General and an Enduring Power of Attorney

Not all Powers of Attorney are the same.

A General Power of Attorney is a legal document which gives the Attorney the authority to make decisions about financial and legal matters on behalf of the person who appoints them. This power lasts only for as long as the person who appoints them has mental capacity. The general power ceases to operate if the person who has made the Power of Attorney loses ‘capacity’ to make decisions. A General Power of Attorney is often used as a tool of convenience. For example, a person might appoint a General Power of Attorney to look after their financial and legal affairs in Australia while they travel overseas.

An Enduring Power of Attorney is similar to a General Power of Attorney except that the powers continue, or endure, in the event the donor loses mental capacity.

An Enduring Power of Attorney, unlike the General Power of Attorney, must be explained to you by a prescribed witness, that is, a lawyer.

It is important to be aware that an Enduring Power of Attorney becomes void when you die.

An enduring power of attorney is different from an appointment of Enduring Guardian. In New South Wales, a document appointing an Enduring Guardian can be used alongside an Enduring Power of Attorney to authorise medical and health decisions.

What happens if you lose capacity without having a Power of Attorney?

Loss of capacity to make decisions is often not something most people like to think about. However, if you do not have an Enduring Power of Attorney and develop a mental incapacity you will be unable to manage your financial affairs. It is too late then to have a lawyer prepare such a document as you would not have the appropriate capacity to sign it.

The difficulty is that no person automatically has the right to manage your assets. Not even if they are your husband or wife.

This therefore has a significant adverse effect on all the financial decision making thereafter with your bank accounts, your jointly owned home, shares or other jointly owned assets or liabilities.

To have decisions made in these circumstances would often require an application to the NSW Civil and Administrative Tribunal (formerly the Guardianship Tribunal).

The applicant, usually a family member, would apply to become your financial manager. However this is subject to that person being deemed fit (as in ‘fit and proper’) by the Tribunal. Failing this finding of being ‘fit’, the Tribunal may appoint the NSW Trustee and Guardian to manage your affairs.

If the NSW Trustee and Guardian is appointed, your spouse may need to consult with a government department to deal with your ongoing financial decision making until your death.

When does the Attorney’s power begin? 

You may nominate when your Attorney’s power is to begin.  If you do not name a date or an occasion, it begins immediately. You can put conditions on when it commences for example when a letter is produced from a medical practitioner that you need help.

It is important to note that even if you give your Attorney power immediately, you may also continue to make decisions yourself while you are able to do so. By providing a Power of Attorney you do not restrict or give up the right to make financial decisions as you do today.


Today making an appointment under an Enduring  Power of Attorney is a sensible precautionary step as part of estate planning while General Powers of Attorney can be a useful temporary measure for business or travel reasons. Professional groups such as accountants and financial planners, along with lawyers recommend that their clients of all ages and walks of life, make a Power of Attorney so their assets are not locked up if a person loses legal capacity to sign documents and their loved ones are put through avoidable stress.

If you or someone you know wants to know more don’t leave it to late, please contact us on 02 9699 9877 or email [email protected].