Clearing up the distinctions of power of attorney


The distinction between a general power of attorney, an enduring power of attorney and an attorney are often misunderstood, according to an estate lawyer and knowing the difference is important.
Anna Hacker, national manager estate planning at Australian Unity Trustees, said the issue was becoming more important with the knowledge that one-in-six Australians were aged 65 or over, a figure that was expected to rise to 21%-23% by 2066.
“A general power of attorney is a legal document where the principal appoints another to act on their behalf in relation to different decisions around key assets, from property to their bank account,” Hacker said.
“This can commence or be revoked at any time, and will cease effect if the principal dies or loses mental capacity to make their own decisions.
“An enduring power of attorney, on the other hand, is a legal document that sees the powers of an attorney continue, even when the principal is unable to make decisions for themselves due to accident or illness that results in loss of capacity.
“Typically, an enduring power of attorney will end when either the attorney or the principal dies, or the attorney loses capacity themselves.
“A loved one who has been appointed in a general or enduring power of attorney document is simply known as an attorney.”
Hacker said families should be aware that it was possible for more than one person to be appointed as an attorney, and the principal may allocate certain responsibilities to each one.
“Life has its unpredictable moments. In my profession, it is surprisingly common to see client cases where the principal’s attorney passes away or loses capacity themselves.
“These situations highlight the importance of a principal naming an alternative attorney who will take on the initial attorney’s responsibility if the initial attorney dies, loses capacity themselves, or their powers are revoked.”
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