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Enduring Power of Attorney and Enduring Guardianship: Explained


Appointing a Power of Attorney


While most people are aware of the importance of creating a Will to ensure their affairs and wishes are carried out once they pass away, many neglect the importance of appointing an Enduring Power of Attorney and Enduring Guardian as part of an Estate Plan.


Enduring Power of Attorney and Enduring Guardianship: Explained

These legal documents are important as they ensure an individual has a trustworthy person who can manage their affairs and make decisions on their behalf, in the event they lose capacity.


It is recommended that anyone over 18 years of age, who possesses the requisite mental capacity, facilitates the creation of these documents. If an individual has lost capacity and has not appointed an Enduring Power of Attorney or Enduring Guardian, the NSW Civil and Administrative Tribunal (NCAT) may appoint an individual to act on their behalf, or a government body such as the Public Guardian or the NSW Trustee & Guardian.


A Power of Attorney may be General or Enduring.


A General Power of Attorney is a legal document that appoints the attorney to act on behalf of the principal regarding their financial and legal matters. This authorisation is granted only while the principal has mental capacity. An agent acting under Power of Attorney can pay your bills and manage your financial affairs for many reasons, including if you live or travel overseas.



What happens if I lose capacity?


In cases where the principal loses mental capacity, their Enduring Power of Attorney will be engaged. Typically, a letter from the principal’s general practitioner or a geriatrician will be required to prove they lack capacity to make relevant decisions. Once you lose your mental capacity, the Enduring Power of Attorney cannot be revoked.



Enduring Power of Attorney and Enduring Guardianship: What’s the Difference?


Under an Enduring Power of Attorney, the attorney is authorised to manage your legal and financial affairs. This extends to purchasing and selling assets such as real estate and shares, making bank transactions and paying bills on your behalf.


However, this power does not extend to decisions regarding your lifestyle, medical or health care. Instead, an Enduring Guardian must be appointed to make these decisions once an individual loses capacity and is known as a living Will. Such decisions include the principal’s living arrangements and medical treatments including life support preferences.


Both an Enduring Power of Attorney and Enduring Guardianship are essential legal documents to accompany a Will and will ensure your financial and legal obligations are looked after by a trusted individual in the event you lose capacity.



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