Enduring Power of Attorney vs. General Power of Attorney: What You Should Know

Life is very unpredictable, and there will be a period when you will need someone to take care of your money or your legal matters. Whether it’s due to illness, disability, or simply being unavailable, having a Power of Attorney lawyer in place ensures that your affairs are handled smoothly.

In Australia, the two powers of attorney are general and enduring. Both afford the attorney the discretion to act according to the wishes of the principal. Still, their application differs immensely, in particular, the long-term incapacity of the principal, which is indeed served by a more specialized enduring power of attorney.

Knowing the fundamental differences between these two legal instruments is crucial in safeguarding your interests. The article will discuss GPOA vs EPOA, why they are handy, Western Australian legal provisions, and why seeking advice from a power of attorney lawyer is the wisest move towards safeguarding your future.

What is a Power of Attorney?

A POA is the process through which one grants to another the authority to stand in one’s stead. The principal confers the power while an attorney, who is, in most cases, not an attorney-at-law, receives it.

A POA can be helpful in a very broad range of situations, for example:

• Traveling abroad and having money managed for you.
• Illness or disability.
• Arrangement for potential future incapacity.

Not all Power of Attorneys are equal, however. Let us look at the two types.

General Power of Attorney (GPOA)

General Power of Attorney (GPOA) makes provisions for the appointment of an attorney, the power to manage your legal and financial affairs, only when the principal is mentally competent.

Principal Characteristics of GPOA

• Purpose: Used for short-term situations where the principal remains mentally capable.
• Duration: The authority will terminate on the incapacitation or death of the principal.
• Purpose: Special or general, i.e., payment of accounts or settlement of property.
• Legal Status in WA: In Western Australia, GPOAs do not require registration unless used for property transactions

Use of a GPOA

• When travelling overseas and needing someone to manage finances.
• Sickness or bodily injury temporarily.
• Authority over some business dealings.

Enduring Power of Attorney (EPOA)

This differs from a GPOA because it is usually valid even if the principal loses mental capacity because of illness, injury, or age.

Principal Characteristics of GPOA

• Object: Makes provisions for the long-term safeguarding of the money.
• Duration: Will take effect even if the principal experiences a mental incapacity.
• Coverage: It is concerned with money and property matters (not health matters).

When making activation of an EPOA necessary:

• Lack of ability to act in the future as a result of disease, dementia, or senility.
• Managing money in case of loss of mind.

GPOA vs. EPOA

First of all, the General Power of Attorney means allowing someone to be a proxy on matters of finance on behalf of the other person. The power will no longer function if a person becomes a misfit due to the loss of mental capacity. A GPOA, as far as the national average is concerned, is done by making temporary delegations of authority on financial matters. This is not considered an appropriate way for estate planning purposes. While mostly not required to be registered, land and property transactions will have registration compulsory for the GPOA to be effective and valid.

The EPOA is at the other extreme of GPOA in that the power, when granted, continues to operate even after the grantor becomes incapacitated mentally, be it elderly persons or persons who have passed a certain terminal stage of disease. Designated for the long term, it focuses on planning and management of finances, which is of high importance for estate planning. Registration is required for it to have legal effect in a land transaction or property transaction.

Why You Need a Lawyer to Draft a Power of Attorney

Although you can prepare a POA yourself, you ought to consult a power of attorney lawyer in Perth, WA, to ensure that:

• It is lawfully effective and by all WA laws.
• The appointment of an attorney under the law safeguards your interests.
• The extent of power is clearly defined and reasonable for your case.
• You are well aware of the implications before signing.

Conclusion

Whether you will be seeking a General Power of Attorney (GPOA) or Enduring Power of Attorney (EPOA) will depend on your future or immediate money needs. A GPOA is used for immediate needs but expires if you become incapacitated. The EPOA remains active if you are incapacitated, and that is why it is a valuable investment in estate planning. By working with a power of attorney lawyer or Will Lawyers Perth, you can ensure that your legal documents reflect your wishes, comply with WA laws, and provide security for the future.