What Is It?
A power of attorney is a legal document in which you appoint someone to make financial, legal and/or medical decisions on your behalf. Depending on the extent of the power, the attorney (ie. the appointed person) is given authority to make decisions as if you were making them yourself. It is important to note that there are different types of power of attorney (eg general, enduring and irrevocable) which are more suited to different circumstances. It is also important to remember that there are slight variations in the law between states.

Why Take Out a Power of Attorney?
A power of attorney can be a very powerful tool in the organisation of your financial matters and personal affairs. A power of attorney is a legal document, which appoints one person to act on behalf of another, often in areas of property and financial management. A power of attorney is particularly useful if you travel or become physically or mentally incapacitated.

Case Study
Ben goes overseas to Kenya for a holiday. His daughter Sally is taking care of the bills while he is away. Ben didn’t appoint Sally as power of attorney, so she has no authority to deal with his finances or sign legal documents on his behalf. Had Ben provided Sally with a General Power of Attorney, she would have been able to conduct Ben’s affairs in his absence.

While Ben is overseas, he is critically injured in a car accident and loses mental capacity. There is no one authorised to act on Ben’s behalf. This means that no one is able to pay expenses (such as medical expenses) for Ben from his existing funds without a court order.

Had Ben returned safely, he could simply have revoked the Medical Enduring Power of Attorney and the General Power of Attorney in writing if he didn’t want Sally to continue managing his affairs.