A Power of Attorney is a legal document that grants a person (the Attorney) the authority to perform certain functions on someone else’s behalf (the Donor). The most common forms that a Power of Attorney come in are “General” & “Enduring”. There is a significant difference between the General and Enduring Power of Attorney documents. This is explained below:
General Power of Attorney
This document provides the authority for the Attorney to act on behalf of the Donor. This document is often used when people are travelling overseas or while someone is recovering from an operation or illness. As a sensible precaution, a person may wish to grant authority to an Attorney for a specific period of time to access their bank account or other important information just in case something unexpected happens. As the name suggests, a General Power of Attorney is intended to have a general operation.
Note: Giving someone access to your bank account should be done with great caution, therefore you need to be absolutely sure that your Attorney is trustworthy.
Enduring Power of Attorney
The main difference between the Enduring Power of Attorney and the General Power of Attorney document is that the Enduring Power of Attorney continues to be effective if the Donor loses mental capacity.
The principle advantages of having an Enduring Power of Attorney are that:
- it can save an expensive application to the appropriate Government body for the appointment of someone to look after the Donor’s affairs;
- it can save the continuing expense and administrative burden of dealing with an administrator appointed by the Tribunal and having accounts audited annually;
- if the Donor loses mental capacity then someone that the Donor can trust and rely upon, and whom the Donor does not necessarily need to pay, can look after the Donor’s affairs and pay his or her bills.
The Enduring Power of Attorney extends beyond the mental incapacity of the Donor and therefore constitutes a greater risk. For this reason it is a requirement in most States that an Enduring Power of Attorney be explained to the Donor and witnessed by someone that is described as a prescribed witness. A prescribed witness is a Solicitor, Barrister or Clerk of the Court or someone that is described under the Power of Attorney Act 2003 as a prescribed witness.
In some States, the Enduring Power of Attorney can also be limited to certain situations as desired by the Donor. (noted in individual forms for each State).