What is an Enduring Power of Attorney?
An Enduring Power of Attorney (EPA) allows you to appoint a trusted person, known as your attorney, to make certain financial and legal decisions on your behalf. This covers a range of matters including managing bank accounts, paying bills, dealing with property and handling investments.
What makes an EPA ‘enduring’ is that it remains valid even if you lose legal capacity. This is the critical distinction from an ordinary power of attorney, which ceases to operate the moment capacity is lost.
The Powers of Attorney Act 2003 (NSW) governs EPAs which must be properly executed to be legally valid. Registration with NSW Land Registry Services is generally required if you want your attorney to deal with NSW real estate on your behalf, for example selling, mortgaging, or leasing property for a term of more than three years.
One practical advantage of an EPA is flexibility. You can choose for it to take effect immediately after signing, or only upon the loss of capacity. Either way, it gives your appointed attorney clear legal authority to act and they are required to act honestly, in good faith and always in your best interests.
What is an Enduring Guardianship?
An Enduring Guardianship allows you to appoint someone, your guardian, to make personal and lifestyle decisions on your behalf. These decisions can include choices about your health care, medical treatment, accommodation and daily care arrangements.
The Guardianship Act 1987 (NSW) governs Enduring Guardianships. Unlike an EPA, an Enduring Guardianship does not operate immediately. It only becomes operative once you have lost decision-making capacity. It must, however, be made while you still have capacity to do so.
The document gives your chosen guardian legal authority to make deeply personal decisions without the need to go to court. This matters enormously in practice. When a family member is hospitalised or facing a sudden health crisis, having a guardian with clear legal authority means decisions can be made promptly and in accordance with your known wishes.
Like an EPA, an Enduring Guardianship can be revoked at any time while you retain capacity and your guardian is obliged to act in your best interests.
Power of Attorney vs Enduring Guardian: Key Differences
- Different documents for different purposes. An EPA covers financial and legal decisions while an Enduring Guardianship covers personal and health decisions. A single document cannot do both in NSW.
- Each document is governed by separate laws which set out their own requirements for execution, registration and the duties of the appointed person.
- The timing of when each document operates can also differ. An EPA may be used immediately after signing if you choose. An Enduring Guardianship only activates after capacity is lost.
Why You May Need Both Documents
Because financial and personal decisions are legally separate, a single document cannot provide comprehensive protection. You will generally need both an EPA and an Enduring Guardianship to ensure all areas of your life are covered if you lose capacity.
Consider a practical scenario: your parent suffers a stroke. An EPA allows a nominated attorney to pay medical bills, manage bank accounts and deal with property matters. But it does not give anyone authority to consent to medical treatment or decide where your parent will live during recovery. For those decisions, an Enduring Guardianship is required.
Having both documents prepared allows you to tailor your arrangements to your circumstances. You decide who manages your finances and who makes decisions about your care. Your attorney and your guardian can be the same person, or different people, depending on your preferences and the nature of your relationships.
What Happens Without These Documents?
Without an EPA, no family member has automatic legal authority to access your bank accounts, pay your bills, or manage your property, regardless of how close your relationship is. Without an Enduring Guardianship, family members cannot lawfully consent to medical treatment or make care decisions on your behalf.
In these circumstances, a family member or other interested person may need to apply to the NSW Civil and Administrative Tribunal (NCAT), or in some cases the Supreme Court, for a financial management order or a guardianship order. These applications can take time and involve legal costs.
Without both documents in place, family members may disagree about who should make which decisions and there may be no clear legal answer. Arguments between family members about who should act and how, can become difficult and damaging. Importantly, your wishes may simply not be followed, resulting in outcomes you would not have chosen.
Planning ahead with an EPA and Enduring Guardianship ensures that the people you trust have the legal authority to act and that your preferences guide the decisions made on your behalf.
Key Takeaways
- An Enduring Power of Attorney covers financial and legal decisions and may take effect immediately or only upon loss of capacity – the person making the appointment decides. An Enduring Guardianship covers personal and health decisions and only operates after capacity is lost.
- Without both documents in place, family members have no automatic legal authority to act on your behalf, which can lead to costly NCAT or court proceedings and family conflict.
- You can appoint the same person as both your attorney and your guardian or choose different people for each role.
- Preparing these documents while you have capacity helps give you control over your future and protects your family from legal uncertainty.
If you are considering putting these arrangements in place, or if a family member’s health is giving you cause for concern, speaking with a solicitor experienced in estate planning is a sensible first step. Having the right documents in place before they are needed is one of the most practical things you can do for yourself and your family.
This article is intended as general information only and does not constitute legal advice. The law in this area is complex and the right arrangements for you will depend on your individual circumstances. You should seek independent legal advice before making any decisions about powers of attorney or enduring guardianship.
For more information, help or advice, please call 02 9150 6991 or email [email protected].