What is it?
Where it is permitted under State/Territory law, a financial enduring power of attorney is a legal document. By signing it, you authorise a person to make financial and legal decisions for you.
The main difference between this and the general power of attorney is that a financial enduring power of attorney is valid even if you become mentally incompetent.
This type of power of attorney is often used to plan for the future. For example, after cruising the Hootchee Pootchee River, you decide to tackle the mountains of Upper Mongolia. Alas, you fall and are unconscious for three weeks.
A financial enduring power of attorney would enable your attorney - the person YOU have chosen - to make financial decisions for you during that three weeks. (By the way, a medical enduring power of attorney, where it is permitted under State/Territory law, would allow the attorney to make medical decisions during that time as well, but more of that later).
What can my attorney do?
Your attorney can make any legal and financial decision that you can make. So if you only want to appoint an attorney for a short time, perhaps you should use the general power of attorney rather than a financial enduring power of attorney.
Can I limit the powers of the attorney(s)?
Yes, where it is permitted under State/Territory law. Unless you do so your attorney has complete power – on the other hand, make sure the limits you impose don't interfere with their ability to act on your behalf. Get professional advice about the best wording if you want to place restrictions on the power and are not sure how to accurately phrase it.
Can I delay its operation?
Yes, where it is permitted under State/Territory law. For instance, where the law allows you can make the power begin:
- straight away;
- on a specified date;
- on a specified event.
Where it is permitted under State/Territory law, if you do this you may be able to decide whether you want your attorneys to make decisions "jointly" or "jointly and severally".
"Jointly" means that both attorneys have to agree with the decision they make. "Jointly and severally" means that either attorney can make a decision by themselves.
There are no set rules to say what is the best choice, it depends on your circumstances. For example:
- appointing attorneys to make decisions jointly and severally could be useful if one of your attorneys travels a lot; or
- if you want two people to make decisions for you, and you don't fully trust the judgement of one of them, then you can appoint them to make decisions jointly.
Does it last forever?
This type of power of attorney will last until:
- you cancel it (you must be mentally competent to do this);
- you die;
- the defined event or time on the form that specifies its use has now expired or is over;
- you become bankrupt; or
- it is cancelled by an appropriate Court/Tribunal.
Does the attorney have to act in my interests?
Yes. If not, and there are financial or other ramifications, get legal advice. Also cancel the power.
How do I cancel it?
You can cancel an enduring power of attorney at any time, as long as you are mentally competent.
Check whether there are formal requirements in your State/Territory, particularly if there are registration requirements. And don't forget to tell your banks or other agencies that have dealt with the attorney.
What happens if I don't have one?
If you do not have a financial enduring power of attorney and you lose the capacity to make financial decisions, one may be appointed by a Tribunal.
It may be a member of your family, a friend, or an independent administrator from a Government agency (e.g. the Office of the Protective Commissioner in NSW or State Trustees in Victoria).
Fees are charged for these services. The Tribunal may appoint an independent administrator even if family members are willing and able to act for you, especially if there is conflict within the family or a dispute about your best interests.
You can avoid this outcome by making an enduring power of attorney. It is an outcome you should avoid.
Last Updated – February 2014