Clients often ask us what the difference is between a General Power of Attorney and an Enduring Power of Attorney. Most people know that a Power of Attorney is a legal document appointing one or more people or a trustee organisation to manage your assets and financial affairs. It allows your attorney to attend to such matters as paying bills and managing money if for any reason you are unable to manage financial matters yourself.

A General Power of Attorney can only operate while you have capacity to make decisions. You might want to put this in place so that someone can look after your financial affairs while you are traveling or you may just prefer that someone else handles your financial affairs as the demands of financial management have become too much for you to handle on your own.

If you want to make sure your attorney can act as your substitute decision maker if you lose capacity, you will need to make an Enduring Power of Attorney. This is especially important if you are running your own business or managing your own super fund. Capacity is the ability to make decisions and understand the effects of those decisions. A person is said to have capacity when the person can understand the information and choices presented, they can weigh up the information to make a decision and can communicate that decision.

You can only make a Power of Attorney while you have capacity. If you lose the ability to appoint someone to manage your property and finances, someone will need to apply to the Guardianship Tribunal or the Supreme Court to have a financial manager appointed. The person appointed could be a government official rather than a relative or caring friend. It's best to prepare for the future and choose who you want to manage your affairs.

A person may lack capacity because of dementia, injury or illness. Anyone who has any risk of suffering a disability, injury or illness should seriously consider putting in place an Enduring Power of Attorney. That means everyone should consider it!

Once you have made a Power of Attorney, you can always revoke it (i.e. cancel it) as
long as you still have decision-making capacity. There are many reasons you may wish to revoke a Power of Attorney. For example, your attorney may be unable to act due to their own incapacity, your relationship with the attorney may have changed or your circumstances are different and the appointment you made is no longer appropriate.

A Power of Attorney does not enable a person to make medical or lifestyle decisions on behalf of someone else. An Enduring Guardian is the person who makes these decisions and they are appointed in a separate document.

Enduring Powers of Attorney need to be prepared and signed in a particular way to be valid. Before either making or revoking a Power of Attorney, it is recommended that you seek advice from a solicitor.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.