Power of attorney and enduring guardianship allow a third party to handle decision-making for you in circumstances where you’re unable to do so yourself. While similar, each document covers different matters. Understanding the difference between these crucial arrangements can allow you to protect your interests effectively.
Key takeaways
What is a power of attorney?
A power of attorney allows a chosen party to make certain financial decisions on your behalf. An attorney can have broad powers over your financial affairs or have limitations and conditions placed on which decisions they can make. In NSW, a Power of Attorney is governed by the Powers of Attorney Act 2003.
Appointed attorneys may be empowered to perform actions, such as:
Operating bank accounts.
Paying bills.
Buying or selling property.
Managing investments.
Collecting rent.
In New South Wales (NSW), power of attorney is divided between two legal documents.
General power of attorney (GPOA)
Using a GPOA, you can nominate a person to handle your property and financial affairs as specified in the document for a particular period. GPOA is only valid while you have the legal capacity to make decisions yourself. If you lose this capacity, the GPOA will be voided.
GPOAs are often used for situations where you’re unable to attend to crucial financial matters for a defined period of time, such as:
Spending time overseas.
Undergoing medical treatment.
Enduring power of attorney (EPOA)
Parties entrusted with EPOA retain their ability to make property or financial decisions on your behalf after you lose the legal capacity to make decisions yourself. This can be crucial to maintain continuity in your financial and legal affairs and assist with estate planning. EPOA can be important in circumstances such as:
Sustaining severe injuries or suffering from an illness that incapacitates you.
Experiencing cognitive decline.
What is enduring guardianship?
An enduring guardianship appointment enables a party to attend to matters outside of your financial considerations if you lose the mental capacity to make your own decisions. In NSW, an Enduring Guardian is governed by the Guardianship Act 1987.
Decision-making areas could include:
Personal decisions.
Lifestyle decisions.
Medical decisions.
The kinds of questions that an enduring guardian may address include:
Where will you live?
What health services will you receive?
What are suitable living arrangements for you?
The key differences
Here are some of the key differences between a power of attorney and an enduring guardian:
| Power of attorney | Enduring guardian |
|---|---|
| Deals with property and financial matters. | Deals with health or lifestyle decisions. |
| May handle banking, financial transactions, and property issues. | May handle accommodation, personal care, and medical treatment. |
| Authority is limited to financial concerns. | Authority is limited to personal welfare and lifestyle decisions. |
Power of attorney vs enduring guardian: Why you may need both
Power of attorney and enduring guardianship together help cover a broad range of major decision-making concerns if you have lost capacity to manage them. It may be in your best interests to make arrangements for both documents. You can appoint the same person to both roles or separate individuals.
What happens if you haven’t appointed an enduring power of attorney or enduring guardian? Your loved ones may need to seek an order from the NSW Civil and Administrative Tribunal (NCAT). The NCAT may grant a guardianship order or financial management order to enable a representative to care for your needs.
How to appoint them
To avoid complications, it’s worth making proper arrangements ahead of time to ensure your specific wishes are respected. You must be at least 18 and of sound mind before making any formal decisions. You may give an EPOA or enduring guardianship to more than one person. However, the documents must specify how you wish them to make decisions. The parties could make decisions:
Jointly, where the parties act together on the same decision-making areas when exercising their responsibilities.
Severally, where the parties may act without needing to agree or act together on the same or different decision-making areas.
Jointly and severally, where the parties have the same decision-making areas and can act together or separately.
Here are the basic steps to take.
Enduring power of attorney
Choose the person you wish to appoint as an EPOA. They should be someone you completely trust, such as a family member or close friend.
Decide what powers you want them to have. An EPOA isn’t all or nothing. You can choose what decisions you want them to have responsibility for.
Seek independent legal advice about drafting an EPOA document. The NSW Trustee and Guardian doesn’t provide a downloadable template.
Organise a prescribed witness for the document’s signing. An eligible witness for an EPOA may include:
A solicitor or barrister.
A Registrar of the NSW Local Court.
An employee of NSW Trustee and Guardian.
If the EPOA may involve real estate transactions, it should be registered with the NSW Land Registry Services.
Enduring guardianship
Decide which party you wish to have enduring guardianship powers. This person may also be appointed your power of attorney.
Establish what decisions you want the nominated party to have.
Make an appointment with a lawyer or NSW Trustee and Guardian to prepare an enduring guardian document.
The document signing must be overseen by the same prescribed witnesses as an EPOA.
Conclusion
Organising how you wish your affairs to be managed if you’ve lost decision-making capacity is an important consideration. A power of attorney and enduring guardianship are similar arrangements, but have crucial differences. Understanding how each contributes to your circumstances can help you manage your interests.
Are you seeking legal advice?
Bateys Law Firm can help you manage your power of attorney and enduring guardianship appointments. Contact us today for a free consultation.
Disclaimer: This article provides general information only. It is not legal advice. Family law outcomes depend on your circumstances. You should speak with a family lawyer before making decisions about your matter.
