Enduring Power of Attorney Explained

Planning for the future involves more than deciding what happens to your assets after you pass away. An Enduring Power of Attorney is an important legal document that allows you to choose someone you trust to make property and financial decisions on your behalf if you lose decision-making capacity.

At Lotus Legal, we help individuals and families across Western Australia understand their estate planning options and prepare legal documents that reflect their wishes. Preparing an Enduring Power of Attorney allows you to choose who manages your financial affairs if you are unable to make those decisions yourself.

In this guide, we explain what an Enduring Power of Attorney is, how it works in WA, who can be appointed and the key things to consider when preparing one.

What is an Enduring Power of Attorney?

An Enduring Power of Attorney is a legal document that allows you to appoint another person to make property and financial decisions on your behalf.

The person creating the document is known as the donor, while the person appointed to make decisions is known as the attorney. The attorney does not own your assets or have unlimited control. Their authority is limited to the decisions and powers provided under the document.

This authority continues if you lose decision-making capacity, allowing your attorney to manage your financial affairs within the powers provided in the document.

Enduring Power of Attorney vs general power of attorney

An Enduring Power of Attorney and a general power of attorney both allow someone to make financial decisions on your behalf. The key difference is what happens if you lose decision-making capacity.

Enduring Power of Attorney

• Purpose: Used to plan for situations where you may no longer be able to make decisions yourself
• Financial decisions: Allows an attorney to make property and financial decisions on your behalf
• Loss of capacity: Continues if you lose decision-making capacity
• Common use: Future planning and protecting your financial affairs

General Power of Attorney

• Purpose: Usually used for temporary or specific situations
• Financial decisions: Allows an attorney to make decisions within the authority provided
• Loss of capacity: Generally ends if you lose decision-making capacity
• Common use: Short-term arrangements, such as allowing someone to act on your behalf while you are unavailable

An Enduring Power of Attorney is often considered as part of a broader estate planning strategy, alongside documents such as Wills and other arrangements that help prepare for the future.

What decisions can an attorney make?

An attorney appointed under an Enduring Power of Attorney can make decisions about your property and financial affairs. The authority they have depends on the instructions included in your document.

An attorney may be responsible for managing matters such as:

• Managing bank accounts and paying bills
• Buying, selling or managing property
• Managing investments and financial assets
• Communicating with financial institutions on your behalf

An attorney must act in your best interests and only use their authority for the purposes allowed under the Enduring Power of Attorney. They must also keep accurate records of decisions and transactions made while acting in the role.

What an attorney cannot make decisions about

An Enduring Power of Attorney only covers property and financial decisions. It does not allow an attorney to make decisions about your medical treatment, lifestyle or personal matters.

If you want to appoint someone to make personal, lifestyle and treatment decisions on your behalf if you lose capacity, an Enduring Power of Guardianship may be a relevant document to consider.

An Advance Health Directive is another important estate planning document that allows you to record your own healthcare wishes in advance.

Who can you appoint as your attorney?

Choosing the right attorney is an important part of preparing an Enduring Power of Attorney. Your attorney will have legal authority to make financial and property decisions on your behalf, so it is important to appoint someone you trust and who understands your wishes.

Your attorney must:

• Be at least 18 years old
• Have legal capacity to make decisions
• Understand the responsibilities involved in managing someone else’s financial affairs

Many people appoint a family member, partner or close friend as their attorney. If you have a complex family structure, it is also important to consider how your estate planning arrangements reflect your wishes. This may include preparing a blended family Will to address specific family considerations.

When choosing an attorney, consider someone who:

• Acts responsibly with money and financial matters
• Understands your values and preferences
• Is willing to take on the responsibility
• Can communicate with banks, government agencies and other organisations if needed

You should discuss the role with your chosen attorney before completing an Enduring Power of Attorney. This helps ensure they understand what the role involves and are comfortable accepting the responsibility.

Can you appoint more than one attorney?

In Western Australia, you can appoint up to two attorneys if you’d like more than one person sharing responsibility for your financial and property decisions.

Depending on how the document is prepared, you may set out whether attorneys must make decisions together or whether they can act separately. You can also appoint an alternative attorney who can step into the role if your first choice is unable or unwilling to act.

How is an Enduring Power of Attorney created in WA?

To create an Enduring Power of Attorney in Western Australia, you must understand the nature and effect of the document and have the legal capacity to make your own decisions.

This means you must be able to understand what you are signing, what authority you are giving to another person and the potential consequences of the appointment.

An Enduring Power of Attorney must be completed correctly and signed in accordance with WA requirements. The document must be signed in the presence of two independent adult witnesses.

At least one of the witnesses must be authorised to witness statutory declarations. The witnesses must also meet the relevant requirements for witnessing the document.

Who can witness an Enduring Power of Attorney?

In WA, witnesses must:

• Be at least 18 years old
• Be independent witnesses
• Meet the requirements for authorised witnessing
• Not be the person being appointed as your attorney

Having the document properly witnessed helps ensure your Enduring Power of Attorney meets the requirements in WA.

If you are unsure about the requirements or want to make sure your document reflects your circumstances, obtaining legal advice before preparing an Enduring Power of Attorney can help you understand your options.

What happens if you lose capacity without an Enduring Power of Attorney?

If you lose decision-making capacity without an Enduring Power of Attorney in place, someone else does not automatically have legal authority to manage your financial affairs.

This means your family or people close to you may not be able to access your bank accounts, manage property matters or make financial decisions on your behalf without further steps being taken.

In these circumstances, an application may need to be made to the State Administrative Tribunal (SAT) for a decision-maker to be appointed. The appointed person may then be responsible for managing your financial and property affairs, making decisions on your behalf and keeping records of their actions.

Depending on your circumstances, the State Administrative Tribunal may appoint a suitable person, trustee company or another organisation to manage your affairs.

Preparing an Enduring Power of Attorney while you still have legal capacity allows you to choose someone you trust to make these decisions if you are no longer able to do so yourself.

When does an Enduring Power of Attorney end?

An Enduring Power of Attorney does not continue forever in every situation. There are circumstances where the authority given to an attorney can come to an end.

You can revoke an Enduring Power of Attorney at any time while you still have legal capacity. Revoking the document means the person you appointed will no longer have authority to make decisions on your behalf.

If you decide to revoke your Enduring Power of Attorney, the revocation should be completed correctly and communicated to your attorney and any relevant organisations that may rely on the document.

An Enduring Power of Attorney may also end in other circumstances, including:

• Your death
• A new Enduring Power of Attorney replacing the previous document
• Circumstances where the authority granted under the document is otherwise brought to an end

If your attorney will be buying, selling or managing property on your behalf, your Enduring Power of Attorney needs to be lodged with Landgate before that transaction can go ahead.

There are a few extra steps involved, especially if some time has passed since you signed the document, so it’s worth talking to our team to make sure everything’s in order.

How does an Enduring Power of Attorney fit into estate planning?

An Enduring Power of Attorney is one part of a broader estate planning strategy. While a Will explains what happens to your assets after your death, an Enduring Power of Attorney helps manage your financial and property decisions if you lose decision-making capacity. Our guide to estate planning explains how these documents can work together.

Depending on your circumstances, your estate plan may also include other important documents, such as:

• A Will to set out how your assets should be distributed
• An Enduring Power of Guardianship for personal, lifestyle and treatment decisions
• An Advance Health Directive to record your healthcare wishes

Having these documents prepared together helps provide clarity for you and your loved ones, especially if important decisions need to be made in the future.

Estate planning is not only about deciding what happens to your assets. It also helps ensure your wishes are understood and the people you trust can make important decisions when needed.

Preparing an Enduring Power of Attorney in WA

An Enduring Power of Attorney helps you stay in control of your future by allowing you to choose who you trust to manage your financial and property decisions if you lose decision-making capacity.

Preparing the right documents now can help provide clarity for you and your loved ones later. The team at Lotus Legal can provide clear advice and help you prepare an Enduring Power of Attorney that suits your needs.

Not sure where to start? Contact Lotus Legal today to discuss your Enduring Power of Attorney options and find the right approach.