A Power of Attorney is one of the most important legal documents you can have — yet many people do not put one in place until a crisis forces the issue. Here is what you need to know about Powers of Attorney in NSW.
What Is a Power of Attorney?
A Power of Attorney (POA) is a legal document that authorises another person (your "attorney") to make financial and legal decisions on your behalf. This might include managing your bank accounts, paying bills, operating your business, buying or selling property, or handling legal proceedings.
General Power of Attorney vs Enduring Power of Attorney
There are two main types in NSW:
- General Power of Attorney: Operates while you have mental capacity. It automatically ceases to operate if you lose capacity. This is commonly used when someone is temporarily overseas or unable to act — for example, a business owner going on an extended trip.
- Enduring Power of Attorney: Continues to operate even if you lose mental capacity — which is precisely when you need it most. An Enduring POA is the document most people require for long-term planning purposes.
What Is an Appointment of Enduring Guardian?
An Enduring Power of Attorney covers financial and legal decisions. It does not authorise your attorney to make personal and lifestyle decisions — such as where you live, what medical treatment you receive, or who can visit you. Those decisions are covered by a separate document: an Appointment of Enduring Guardian.
We strongly recommend that both documents be prepared at the same time so you have comprehensive coverage.
Who Should I Appoint as My Attorney?
Your attorney must be someone you trust completely, because they will have significant power over your financial affairs. You should consider:
- Whether the person is organised, financially responsible, and trustworthy
- Whether they are likely to be available and willing to act when needed
- Whether they have any conflicts of interest
- Whether you should appoint more than one attorney to act jointly (providing a check on each other) or severally (each able to act independently)
You can also appoint a substitute attorney who takes over if your primary attorney is unable to act.
Can an Attorney Do Anything They Like?
No. An attorney must act in your best interests, keep your finances separate from their own, keep proper records, and follow any conditions or restrictions set out in the document. An attorney who misuses their power can face civil and criminal liability.
If you have concerns about an existing attorney, the NSW Civil and Administrative Tribunal (NCAT) can investigate and, if necessary, revoke the appointment.
When Is It Too Late?
A Power of Attorney must be signed by a person who has mental capacity at the time. If you lose capacity before putting a POA in place, it is too late. A family member would then need to apply to NCAT for a financial management order — a more expensive, time-consuming, and public process.
This is why we strongly encourage everyone — particularly as they get older or if they have a health condition — to put an Enduring Power of Attorney in place now, before it is needed.
Home and Hospital Visits Available
If you or a family member cannot come to our office, we come to you. We regularly visit clients at home, in hospital, and in aged care facilities to arrange Powers of Attorney and Wills. Your first consultation is free. Call us on (02) 9633 3122.
Need legal advice? James Papas Solicitors offers free first consultations for all Wills & Estate Planning matters. Our offices are in Parramatta and we serve all of Western Sydney. Learn more about our Wills & Estate Planning services → or contact us today.