What is a Power of Attorney and is it different from an Enduring Power of Attorney?

A Power of Attorney is a document appointing a person or persons  to act in the name of and on your  behalf . The Power of Attorney  can be general or limited to defined  acts (see below).

It can also provide expressly that it is to “continue to be effective” even though the principal subsequently suffers unsoundness of mind. This is called an Enduring Power of Attorney.

Who Can Give a Power of Attorney?

Anyone who is mentally sound and is at least 18 years old can give a power of attorney.
Subject to its Memorandum and Articles of Association, a company can also give a power of attorney.

Who Can be an Attorney?

Anyone who is willing to be appointed, is at least 18 years of age and is not a Bankrupt may act as attorney under a power of attorney. Subject to its Memorandum and Articles of Association, a company may be appointed to act as an attorney.

When Does a Power of Attorney Cease to Have Effect?

In general terms the power of attorney ceases to have effect :-

• By notice of revocation from the principal.
• During any period of management of the principal’s property and affairs under the Protected Estates Act 1983, although the Supreme Court may by order restore the power at any time subject to any conditions the Court imposes (the Court may also make other orders for the benefit of the principal);
• Upon the death or bankruptcy of either the principal or the attorney, or upon the liquidation of a company which is either a principal or the attorney;
• If the attorney notifies the principal that he/she or it will no longer act under the power;
• Where two persons have been appointed to act jointly (together) as attorneys and one dies or becomes bankrupt, unless the power of attorney also appoints a substitute to act as a substitute in the event of the death or bankruptcy of either of the attorneys appointed first in the power of attorney;
• In the event of the principal or the attorney becoming mentally incapacitated, unless the power of attorney makes provision for it to “continue” if the principal suffers unsoundness of mind. This is generally referred to as an Enduring Power of Attorney.

Can I appoint someone under  a Power of Attorney with power to only come into effect if and when I lose mental capacity?

Yes, but expert medical opinion will also be required to establish that that that you have  lost capacity through unsoundness of mind.

How Can a Power of Attorney be Limited?

There are four main ways:-

• It can be limited to a particular area, such as New South Wales.
• It can be limited to specific acts and/or in respect of specific property.
• It can be limited to a particular time or event, such as 1 year or the period of absence of the principal outside Australia.
• It may also provide that the attorney is not to derive any benefit from acting as attorney.