By appointing a power of attorney, you give someone else the right to make decisions on your behalf. The person making a power of attorney is called the ‘principal’ and the person appointed by the principal is the ‘attorney’.
There are 2 types of powers of attorney:
- General power of attorney, and
- Enduring power of attorney.
General power of attorney
A general power of attorney is where you appoint someone to look after your affairs for a specified time. With a general power of attorney, your appointed person can make financial or legal decisions on your behalf.
You may appoint a general power of attorney, for example, if you leave the country for an extended period. The general power of attorney can then make financial decisions on your behalf, such as paying bills or selling your house. If you appoint a general power of attorney and you become incapacitated and are no longer able to make your own decisions, the general power of attorney ceases.
Enduring power of attorney
An enduring power of attorney is where you appoint someone to make financial or legal decisions on your behalf if, in the future, you lose the capacity to make decisions yourself.
Enduring powers of attorney are useful for estate planning. They can help if you suffer a stroke, are incapacitated in an accident, or develop dementia, for example. Your enduring power of attorney can then legally manage your financial affairs for you.
Your enduring power of attorney can:
- operate your bank accounts
- pay your bills, and
- buy or sell property on your behalf.
In jurisdictions such as New South Wales and Victoria, your attorney cannot make lifestyle decisions for you. If you want to give someone the authority to make medical decisions for you in New South Wales, you must appoint an enduring guardian. In Victoria, you must appoint an enduring power of attorney (medical) and enduring guardian.
Learn how Dixon Advisory Law can help you appoint a power of attorney.