Power of Attorney Explained (2022 Update)

Power of Attorney is an important document that gives a trusted person the power to make decisions on your behalf.

Power of Attorney Explained (2022 Update)

Power of Attorney in Australia is a concept that you should fully understand when planning and dividing your estate. The document is crucial to protecting you, your family and your assets. Keep reading o learn more about what it is and if you need one.


What is a Power of Attorney?


A power of attorney is a written legal document that allows someone else to act on your behalf. When authorising a power of attorney, you are giving someone the capacity to make decisions on your behalf regarding legal, financial, business and personal affairs.


Why is a Power of Attorney important?


A power of attorney is important in the event that you are unable to make decisions or lose the capacity to make important decisions. For example, if you are overseas and own property in another country, you can authorise a power of attorney to handle the sale on your behalf.


Do you need a Power of Attorney?


You don’t need a power of attorney but they can protect you if you are unable to make important decisions. The document allows you to appoint a trusted family member, friend or lawyer to make decisions on your behalf.


There are different types of POA’s that handle different matters. Here are a few examples where a Power of Attorney is helpful:



  • A general power of Attorney can help make decisions on your behalf while you still have capacity. For example, with business affairs, finances and real estate.

  • An enduring power of attorney can help make decisions on your behalf after you lose capacity. For example, with advanced care, medical and life style choices.


If you don’t choose a power of attorney and you lose capacity, your family may have to go through a challenging court process to legally appoint them as your substitute decision-maker. Therefore, choosing a power of attorney is the best way to protect yourself and your family.


What’s the difference between a Power of Attorney and a Will?


A Power of Attorney and a Will carry out different actions at different times regarding your estate. Depending on the type of Power of Attorney, they can either come into effect when you say or when you lose the capacity to make decisions. The POA ends when you pass away.


Your Will only comes into effect after you pass away. Your Will allows you to appoint an Executor to carry out your final wishes regarding your estate and manage the transfer of your assets to your beneficiaries.


Who can be a Power of Attorney?


It’s important to remember that a Power of Attorney has the same legal capacity as you when it comes to making decisions about your life. Therefore, you should choose a Power of Attorney that you trust and know has your best interested in mind.


Ultimately, this person will need to keep personal feelings aside and always lead with the best decision for you and your estate. They should also have the confidence to handle varying opinions from family, friends and medical professionals.


You can choose the following people to act as your Power of Attorney:



  • Husband or wife

  • Siblings

  • An adult child

  • A parent

  • A trusted friend

  • A solicitor, accountant or legal professional


It’s also possible to have more than one Power of Attorney. If you choose to have more than one, you need to decide how they have the power to act:



  1. Jointly where they must agree before making decisions or taking action

  2. Jointly and severally where they can act together or independently of each other.


You can also appoint a backup Attorney to fulfil the role if anything were to happen to your primary Attorneys. Regardless of how many, they have a duty under the law to act in your best interests and not directly benefit from their role.


Wrap Up


Choosing a power of attorney is an important decision and one that you should consider carefully. There is many benefits to choosing both a general power of attorney and enduring power of attorney to protect you, your loved ones and your assets.


Starting creating your will online in Australia today.


Keep reading: Guide to Dividing Your Estate in Your Will


Disclaimer: The content of this blog is intended to provide a general guide to the subject matter. This blog should not be relied upon as legal, financial, accounting or tax advice.


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