General Power of Attorney | Enduring Power of Attorney
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General Power of Attorney -v- Enduring Power of Attorney
There are two types of power of attorney (1) “General Power of Attorney” and (2) “Enduring Power of Attorney”.
Both types involve a formal agreement where one person (known as the principal) gives another person (known as the attorney) power to make decisions on behalf of the principal. The term “person” includes both natural persons and legal entities such as corporations.
A General Power of Attorney can only be used for financial matters. It operates only while the principal retains capacity to make decisions and will immediately end in the event that the principal loses capacity. A General Power of Attorney is often used for a specific purpose e.g. to allow an attorney to complete the sale or purchase of property on behalf of the principal where the principal is away overseas. A General Power of Attorney is also used where a corporation needs to appoint an attorney to act for it e.g. to sign documents on behalf of the company in the event that the directors of the company are unavailable.
In contrast to a General Power of Attorney, an Enduring Power of Attorney can be used for both financial and personal/health matters, and it continues (endures) even after the principal has lost capacity to make decisions. Therefore the person who is appointed as attorney needs to be someone whom the principal trusts implicitly to protect their interests.
Sometimes it may be advisable to have in place both a General Power of Attorney and an Enduring Power of Attorney. This is especially the case if you have a self-managed super fund with a corporate trustee. If you wish to make arrangements for a power of attorney to be put in place, or you need advice regarding the type of power of attorney that best suits your individual situation, please contact Malcolm McColm at MMLaw.
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The content published in this Blog is in the form of academic papers and the opinions expressed herein are generalised. The information provided is for educational purposes, not specific legal advice.
The application of any principles referred to can alter from case to case and accordingly you should seek independent legal advice in respect of your individual circumstances.