A power of attorney is a formal instrument by which one person empowers another person to act in their stead for certain legal and financial purposes (e.g. dealing with bank accounts, transferring money, paying bills, dealing with investments, or buying and selling real estate) when they can’t do so themselves.

For example, you might be unavailable to make financial decisions (e.g. because you are overseas or spending time in hospital). Or you might be unable to manage your finances due to serious illness or accident, or loss of mental capacity.

A power of attorney will give that person the authority to act on your behalf. You can appoint an attorney for a limited period or an indefinite period. The latter applies until you die or revoke it.

A ‘general’ power of attorney ceases to be valid when the person who donated the power loses mental capacity.

An enduring’ power of attorney is required should you suffer the loss of mental capacity

For a power of attorney to remain valid after you lose your mental capacity, you must make an enduring power of attorney while you still retain mental capacity. An enduring power of attorney is
an important consideration for everyone, not just people who are older or have a known illness that may affect mental capacity.

For example, if you have an accident or a sudden illness that causes you to lose mental capacity, nobody will be able to access your assets on your behalf, such as your bank account or superannuation, unless you have an enduring power of attorney. And you might need that money
to pay for your medical treatment.