What are Powers of Attorney?

Powers of attorney and advanced care directives work together to assist a person who may have lost their decision-making capacity. The power of attorney only grants authority with respect to a person’s financial matters whereas the advanced care directive allows decisions to be made regarding a person’s health care, living arrangements and other personal matters. This article will focus on the power of attorney.

In a power of attorney, a person (the donor, appointor or principal) grants another (the donee, appointee or attorney) the power to act on their behalf. There are two types of powers of attorney:

1. General power of attorney; and
2. Enduring power of attorney.

Both powers of attorney are governed in South Australia by the Powers of Attorney and Agency Act 1984 (SA) (‘the Act’). To grant a power of attorney, a person must be over 18 years of age and must have legal capacity. A person who has no legal capacity cannot make a power of attorney. In some cases however, persons under 18 may make a power of attorney. The law in that area is unclear and if someone under 18 is seeking to make a power of attorney, they should first obtain legal advice.

The key point of distinction between a general power of attorney and an enduring power of attorney is the extent of the attorney’s decision-making power. Under a general power of attorney, the principal must still have legal capacity before an attorney can deal with their financial affairs. If the principal loses their legal capacity, the general power of attorney is cancelled. Only with an enduring power of attorney can an attorney’s decision-making power survive despite the principal’s loss of legal capacity.

Making a power of attorney does not mean that the principal can no longer make decisions in their own capacity. The principal can still handle their affairs in their own right. For attorneys, it is important to clearly establish when they are acting in their capacity as attorney. This can be achieved by displaying the power of attorney document as proof. When the principal dies, both powers of attorneys will cease. The handling of the now-deceased principal’s estate then transfers to the executor of the principal’s estate or if no Will exists, the administrator of the estate.

If you would like to discuss or make a power of attorney, simply email us at info@straitslawyers.com or call at 08 8410 9069 to arrange an appointment.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.