There are a number of documents that a person may wish to complete in order to appoint one or more persons to manage their legal and financial affairs (i.e. a general power of attorney or enduring power of attorney) and make medical, health care and lifestyle decisions for them (i.e. an appointment of enduring guardian or advance health directive). For an explanation of appointments of enduring guardian and advance health directives see “What is an appointment of enduring guardian? Is it different to an advance health directive or medical treatment consent?”
Power of Attorney
A Power of Attorney is a legal document made by a person (the “principal”) that allows another person (the “attorney”) to do on behalf of the principal any thing that the principal may lawfully authorise an attorney to do, as specified in the relevant document. It does not allow the attorney to make medical, health care and lifestyle decisions for the principal as these decisions are covered in a separate document, which is known as an appointment of enduring guardian or advance health directive.
Importantly, a principal who appoints an attorney does not lose the right to manage his or her own affairs.
If you want your attorney to be able to sell, mortgage, lease or otherwise deal with real estate assets then it is not enough to merely complete and sign a Power of Attorney, it must generally also be registered in the state or territory where the real estate is located. If you do not want your attorney to be able to deal with real estate assets then a Power of Attorney does not need to be registered and the document only needs to be completed to be effective.
A person may appoint one attorney or multiple attorneys. If the principal appoints more than one attorney then the appointment must indicate whether the attorneys are to act jointly, severally or jointly and severally. Attorneys who are appointed jointly are only able to make decisions if they all agree about the decision. Attorneys who are appointed severally or jointly and severally are able to make decisions independently of each other.
Types of Power of Attorney
There are two types of powers of attorney, being a General Power of Attorney and an Enduring Power of Attorney.
General Power of Attorney
A General Power of Attorney is a legal document made by the principal that allows the attorney to do on behalf of the principal any thing that the principal may lawfully authorise an attorney to do while the principal has capacity (other than exercise powers for personal/health matters), subject to the terms of the document. For example, an attorney may act on behalf of the principal in relation to the principal’s assets (e.g. operate bank accounts or buy/sell shares) and sign certain documents on his/her behalf.
It is generally made to give power to someone in relation to financial matters while the principal has capacity and can manage his or her own affairs (e.g. operate bank accounts, buy and sell shares and/or sign certain documents on his or her behalf), although it can be used for certain periods (e.g. if the principal is going on holiday).
It may be limited by specifying a period during which the General Power of Attorney operates (e.g. between two dates while the principal is overseas) or not contain any such limit.
Importantly, a General Power of Attorney only operates while the principal has the capacity to manage his or her own affairs.
Enduring Power of Attorney
An Enduring Power of Attorney is a legal document made by the principal that allows the attorney to do on behalf of the principal any thing that the principal may lawfully authorise an attorney to do.
An Enduring Power of Attorney continues to operate after the principal can no longer manage his or her affairs or understand any documents he or she may be signing (i.e. after they have lost mental capacity). By signing an enduring power of attorney the principal can choose the person who will manage their affairs in the event that they lose mental capacity. The attorney’s decisions have the same legal force as if the principal had made them. The attorney’s power begins at the time nominated by the principal, which may be immediately, at some designated time in the future or when the principal loses capacity and cannot make decisions.
If I want to make a Power of Attorney what do I put in it?
Each Australian state and territory has legislation that prescribes the form of power of attorney document that a principal must complete. These forms generally include further information that the principal, any person witnessing the principal’s signature and the attorney should read before signing them.
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