Are you traveling overseas and want someone to make decisions on your behalf while you’re not there? Or do want to entrust your personal matters to someone just in case something happens to you? Appointing someone you trust as a Power of Attorney is a good way to have preparations in place in case something happens. Not only this, but should an important decision need to be made, a power of attorney will ensure your wishes are met. This article will discuss the difference between a general and enduring power of attorney.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that you can use to grant another person authority to make decisions on your behalf on specific matters, such as legal and financial, in the occasion that you are incapable or busy. You can find more information on what a Power of Attorney is in our previous guide.
General Power of Attorney
A general POA can be used to appoint someone to make legal and financial decisions on your behalf. This is usually for a set period of time. The following are examples of situations where you can appoint someone else to make decisions on your behalf:
- Operating your bank account for you while you are on holidays;
- Voting at meetings on your behalf; or
- Selling your house while you are in hospital.
A general POA only operates when you can still make your own decisions, and ends if you have lost the capacity to make your own decisions. Each state has a different meaning of capacity; for example in NSW the standard is where a person is totally or partially incapable of managing themselves, while Victoria has multiple standards to the same effect.
A general POA cannot be used to appoint someone to make personal decisions, such as health-related matters, on your behalf.
Enduring Power of Attorney
An enduring POA can be used to appoint someone to make legal, financial and personal decisions (only in Queensland and Australian Capital Territory) on your behalf once you have lost capacity. The following are examples of situations where an enduring power of attorney would benefit you:
- Operating your bank account while you are in a coma; or
- Choosing the right diet and dress for you if you suffer from dementia.
An enduring POA can start immediately if it appoints another person to make legal and financial decisions, not for personal decisions. The power for someone else to make personal decisions starts once you have lost the capacity to make decisions for yourself.
It must be noted that some jurisdictions do not allow an enduring POA to appoint someone else to make personal decisions on your behalf. For example, New South Wales requires an enduring guardian to be appointed for such personal decisions. You will need to check with each state’s requirements before submitting an application for an enduring POA.
To summarise the differences:
|Matters that can be addressed
|Legal and financial
|Legal, financial and personal (in QLD and ACT)
|Legal, financial: from declared date
|Legal, financial: from declared date
Personal: once you have lost capacity
|Once you have lost capacity
|Once you have regained capacity
The primary difference between a General and Enduring Power of Attorney is that that latter is still allowed to make decisions on your behalf, even after you have lost the capacity to do so. It’s worth noting that the laws regarding the Power of Attorney are different according to geographical location in Australia. For example, an Enduring POA can only make personal decisions for you if Queensland and the ACT.
Both general and enduring POAs can allow you to place your matters in the hands of someone you can trust. If you would like more advice about powers of attorney, or which power to use in your situation, an estate planning lawyer can advise you on your options.
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