Powers of Attorney – what is it and do I need one?

10 February 2016

A General Power of Attorney and Enduring Power of Attorney are very important documents that can provide peace of mind.

A Power of Attorney is a document used by a person or company to appoint another person or company to make legally binding decisions on their behalf.

Each Australian State and Territory has its own laws in relation to Powers of Attorney. It can be made for a specific purpose, a defined time period or for all financial or property affairs.

What are the different types of Power of Attorney?

There are two types of power of attorney: General Power of Attorney and Enduring Power of Attorney.

A General Power of Attorney ceases to have effect after you lose the mental capacity to make financial decisions, whereas an Enduring Power of Attorney will continue to have effect regardless of your mental capacity.

Do I need a Power of Attorney?

Having a General Power of Attorney and Enduring Power of Attorney is essential if you are:

  • A business owner
  • Travelling overseas, or interstate regularly or for a long period of time
  • Undergoing a serious medical operation
  • Likely to be incapacitated, out of action or out of contact for a significant period of time
  • Frail or have chronic illness.

Having a Power of Attorney ensures financial and property decisions and matters can be handled efficiently and in a timely manner.

For example if you make trips overseas or interstate, it may be useful to leave a power for your spouse or child to act for you. Likewise if you are going to have a serious medical operation that may have you ‘out of action’ for some time, then you should consider one.

Sole operators of businesses should consider one in the event they become temporarily incapacitated or out of contact for a significant period of time. Having a Power of Attorney will ensure the business is looked after from a legal sense.

How is it different to having a Will?

A Power of Attorney is different from making a Will, though you should consider developing or reviewing both documents at the same time. In a Will you appoint an Executor to carry out how you want your assets distributed after your death. A Power of Attorney enables someone to make legally binding decisions for you while you’re alive but their power ends on your death.

How do I make a Power of Attorney?

To make a Power of Attorney, you must be an adult capable of making your own personal and financial decisions. This means you must be able to:

  • understand the nature and effect of a decision
  • freely and voluntarily make decisions
  • communicate those decisions in some way.

You must also be able to understand the nature and effect of making a Power of Attorney, including the contents of, and consequences of preparing the legal document, as well as when the power begins.

When doubt arises over whether a person has the capacity to make an Enduring Power of Attorney, the Queensland Civil and Administrative Tribunal (QCAT) can make a decision about that person’s decision-making capacity.

Who can be an ‘Attorney’?

While the Power of Attorney is the actual legal document outlining who can make decisions on your behalf, the term ‘Attorney’ is used to describe the person you appoint to make those decisions. For this purpose, you can appoint whoever you wish to act as your ‘Attorney’ – including family members and professionals such as a Solicitor. However you need to consider the types of decisions that will be made and at what points they should be able to make decisions on your behalf.

Choosing the right ‘Attorney’

You should choose someone you trust who’d be willing to take on the responsibility. They must be at least 18 years old and not be your paid carer. (Note: A person receiving a carer’s pension is not regarded as a paid carer.)

For personal matters, consider family members or a close friend who understands your personal wishes and health care needs.

For a financial Attorney, consider someone who is responsible with their own money and understands financial matters.

Be careful of who you choose as your Attorney. You’re potentially giving another person total control over your assets and the ability to make personal decisions about your health care and accommodation when you can’t do so yourself.

What next?

Every situation is unique and we have the expertise to help navigate any complexities that exist or could arise when it comes to Powers of Attorney.

Contact Gill & Lane Solicitors at Sandgate via, or 3269 8111 for a free, no obligation consultation.