At any age or stage of life, people have financial decisions to make. They can be big ones, like buying or selling a home, or they can be small, such as paying the electricity bill or budgeting for groceries. These financial decisions, big or small, are important for everyone’s wellbeing and security at any time in life, but they are vital as people age.
Sometimes, older people may become less able to make financial decisions for themselves. This may be due to a change in physical or cognitive ability. This can happen suddenly, through an accident or an illness (such as a stroke) that makes it hard, or even impossible, for them to go to the bank or to pay a bill. Or it can happen over time, perhaps due to the gradual onset of a condition such as dementia.
If you lose the ability to manage your own financial affairs, how will they be handled? Who will decide to pay your bills or choose how your care will be funded?
To ensure that your financial affairs will always be looked after as you would want them to be, you can decide to make an enduring power of attorney.
What is an enduring power of attorney?
An enduring power of attorney is a legal document that enables a person to make sure their financial decisions (and in some states and territories personal/lifestyle decisions) will be looked after if they become unable to do it themselves.
The law presumes adults have the ‘capacity’ to make their own decisions, until proven otherwise. But capacity isn't always straightforward.More information
The document sets out what decisions can and can’t be made on the person’s behalf and allows them to authorise someone they trust to make these decisions for them. It only takes effect if the person loses capacity to make their decisions themselves.
An enduring power of attorney ‘endures’ past the point where the person no longer has decision-making capacity, potentially through till the end of their life. A person can make an enduring power of attorney (EPOA) whenever they like and revoke it whenever they like, as long as they have capacity.
An enduring power of attorney is sometimes referred to simply as an ‘enduring power’ or an ‘EPOA’. It’s different to a general power of attorney, or ‘POA’.
A POA covers specific situations, like travelling overseas or being in hospital. A person can make a POA whenever they like and revoke it whenever they like, as long as they have capacity.
Each Australian state and territory has different arrangements (and some use different names) for an enduring power of attorney, but the general principles are the same. Click here to check the arrangements in your state or territory.
Wills are different
Many people make their wills to ensure that their wishes for the distribution of their assets (such as property, money and shares) will be carried out after they die.
However, a will does not provide authority to anyone for managing the person’s financial affairs while they are alive, even if they lose capacity.
So it’s wise to make both a will and an enduring power.
What is an attorney?
Someone appointed to make financial decisions for another person is generally known as the attorney.
An attorney looks after whatever financial matters the person wants them to, according to the instructions in the enduring power. For example, they might be trusted with paying the electricity bills, managing bank accounts, or arranging payment for residential aged care services by selling their home. The responsibilities can be large or small matters.
Some states and territories allow more than one attorney to be appointed, and in that case each attorney might look after different matters.
In Australia, an attorney must be over 18 years old and have decision-making capacity. They should be someone that the person trusts who knows their values and priorities, so that they can best make decisions that align with the person’s preferences.
The rules may be different in each state, but overall, an attorney must:
keep the person’s money and property separate from theirs
maintain the person’s financial records
act with care and diligence
avoid conflicts of interest
Being an Attorney
An attorney has both the duty and the privilege of enabling another person to live the life they wanted to lead by understanding and enacting their wishes and preferences.More information
What happens if I can’t make financial decisions but don’t have an enduring power of attorney?
Most likely, someone will have to apply to a court or tribunal to have a financial manager of your affairs appointed. This can be expensive and take time.
It’s better to appoint someone yourself while you are able to do so by making an enduring power of attorney.
Can an enduring power of attorney be changed?
An enduring power can be changed or revoked once it’s made. As long as a person still has decision-making capacity, they can change or revoke their enduring power of attorney at any time. Depending on where in Australia they live, different rules or processes will be involved.
Powers of attorney in different states and territories
Every Australian state and territory has different rules governing powers of attorney including how you go about changing or cancelling a power of attorney.More information
It's important that people review their enduring power of attorney occasionally to make any necessary or desired changes, such as if they change their mind about their original choice of attorney or if the attorney becomes unable to fulfil the role.
It would be strongly encouraged to seek independent legal advice when considering making and changing your documents.
In situations where the person no longer has capacity, each state and territory has a Civil or Administrative Tribunal (or an equivalent body) that will make any and all decisions related to the enduring power of attorney, including revocation.
Where is it kept? Do I have to register it?
Most Australian states and territories don’t require an enduring power of attorney to be registered. But some do, and some also have rules about registering them if the attorney/s will be buying and selling real estate on the person’s behalf. Check the rules in your state or territory, in particular the role of the Land Title Office.
Powers of attorney in different states and territories
Registration requirements are different in some state and territories, and some also have rules about registering them if the attorney/s will be buying and selling real estate on the person’s behalf.More information
This can cause problems if a person becomes ill suddenly and no one is sure where their enduring power is or which copy is the most recent one.
Generally, attorneys must sign a document of acceptance and retain a copy of the enduring power. That’s a good step, but people will still need to know who the attorney is.
So, if you make an enduring power of attorney, you should let trusted people know about it, where it is kept and who your attorney is.
You can keep copies at home, such as in a desk drawer or in your handbag or wallet. You should give a copy to your attorney, too.
You can store a copy of your enduring power in MyHealthRecord, the Australian Government’s online health record service, in the Personal Documents area.
The state, territory and Commonwealth governments are also discussing the possibility of introducing a national EPOAs register.
Each state and territory has different rules about enduring powers and other planning documents and how they work together. They may also use different terms.
Helpful terms to know
The following guide explains some of the common terms you’ll find as you read information about powers of attorney. Some terms are the same across different jurisdictions, but some vary.More information
However, every state and territory allows you to appoint a person to make a range of other decisions, along with your financial decisions. These include:
personal/lifestyle decisions – such as who you live with and where, who you see, what social activities you do, travel and holidays
medical decisions – your health care decisions, including treatment and end-of-life care
Some people choose one person to act as their personal/lifestyle decision-maker and another person to be their financial decision-maker, while other people appoint just one person for all their decision-making.
It’s up to you: you can decide how you would like to make it work.
Disclaimer: The information provided on this website is not a substitute for individual legal advice.
Download PDF version
You can download a PDF version of Introduction to enduring power of attorney here.