Understanding Enduring Power of Attorney

Whether you are putting your own financial affairs in order or are concerned about the mental health of a close friend or relative, the different kinds of power of attorney, and the different state regulations, can make putting provisions in place for mental incapacity seem off-puttingly complicated. Don’t panic: here’s our easy guide to get you started.

What is enduring power of attorney?

Enduring power of attorney is a way of giving a trusted individual or individuals authority to manage your financial affairs and property – like giving someone the keys of your house to look after while you’re away. They can pay bills, access your bank account, and sell your house or shares. It does not grant them decision-making power over your lifestyle choices or medical care.

Why would I choose enduring power of attorney?

Enduring power of attorney differs from normal power of attorney in that it continues to operate even if you lose full legal capacity – for instance, if dementia or a head injury means you are no longer able to make responsible decisions for yourself. None of us can guarantee our own mental health indefinitely, so it is highly advisable that all adults set up enduring power of attorney in order that should some accident or illness befall us, someone we trust will take charge of our affairs. If you have not put any provision in place then an administrator might have to be appointed to manage your estate.

Who should I appoint?

If you do choose to set up an enduring power of attorney, then whoever you appoint as your attorney will have considerable control over your financial affairs. For this reason, make sure you think carefully about who you would feel happy about giving this responsibility: you need to be able to trust that they will act in your best interests, and that they will make good decisions about what those best interests are. You might want to choose a spouse, family member or close friend, or you might prefer to hand over control to a professional – an accountant, a lawyer, the Public Trustee or a trustee company. The complexity or otherwise of your financial affairs should be considered before deciding who is best suited to managing those affairs.

How do I set up an enduring power of attorney?

You will need to fill in a form. As the laws of attorney for each state vary slightly, contact your appropriate local office for more information. Alternatively, www.legalwill.com.au sell Legal items for as little as $25.

You will need to sign the form, and your signature must be witnessed. Your attorney must also sign the form. Again, regulations regarding registering an enduring power of attorney vary, but even if it isn’t a legal necessity where you live consider registering it anyway as this will mean it is on record as a public document, that a copy is kept safe from loss or destruction, and that the authority of your attorney to act on your behalf is clear for all to see. If you don’t register it, and least make sure that you and your attorney both keep copies of the document in a safe place.

If you want extra provisions built into your enduring power of attorney agreement – if, for example, you want to include more detail as to which of your financial affairs you want your attorney to have the power to deal with – then you would be best advised to seek legal advice.

It is not expensive or difficult to set up enduring power of attorney, particularly if you use a site like LegalWill.com.au. No one can tell what the future holds: fill in a form now and you could be saving yourself from all kinds of problems later on.