Understanding Powers of Attorney

A Power of Attorney (POA) is a legal document that authorises another person — your attorney — to make financial and legal decisions on your behalf. It is one of the most important documents in any estate planning kit, yet it is frequently misunderstood or overlooked entirely.

General vs Enduring Power of Attorney

A General Power of Attorney is typically used for a specific purpose or period — for example, while you are overseas. It ceases to operate if you lose mental capacity. An Enduring Power of Attorney continues to operate even if you lose capacity, which is why it is the more commonly recommended option for long-term planning.

Who should you appoint?

Your attorney must be someone you trust completely — they will have significant power over your financial affairs. Many people appoint a spouse, adult child, or close friend. You can appoint more than one attorney and specify whether they must act jointly or can act independently.

What can an attorney do?

An attorney under a financial POA can manage bank accounts, pay bills, buy or sell property, and operate a business on your behalf. They cannot make medical decisions — that requires a separate document called an Appointment of Enduring Guardian.

Why you should not delay

A Power of Attorney can only be made while you have legal capacity. If you lose capacity before one is in place, your family may need to apply to the NSW Civil and Administrative Tribunal (NCAT) for a financial management order — a costly and time-consuming process. At Djeric Legal, we prepare Powers of Attorney as part of a comprehensive estate planning package. Contact us today.