Life Insurance

When you need a power of attorney

20 May 2021

When you give someone power of attorney, you give them authority to make decisions on your behalf. So, because that’s quite a big deal, you may want to do it before you actually need it. Here’s what you need to know to get started.

What is a power of attorney

A power of attorney is the person you choose to act on your behalf to look after your financial and legal affairs while you are still alive. That could include decisions around managing your bank accounts, selling properties or entering contracts. They can also make medical decisions for you.

General versus enduring powers of attorney

There are two kinds of power of attorney in Australia:

  1. A general power of attorney is someone you can appoint to make legal and financial decisions on your behalf for a certain period or a specific reason. Say, for example, you needed to undergo surgery and needed someone to manage your affairs while you recovered. If you lose your mental capacity or die, a general power of attorney no longer applies.
  2. An enduring power of attorney is someone you can appoint to make decisions for you should you lose your mental capacity – it ceases to apply when you die, so doesn’t affect your will. It may include medical, health and lifestyle decisions as well as legal and financial decisions. Examples of when you may need an enduring power of attorney could include an ongoing illness or an accident that causes permanent brain damage. You may want an enduring power of attorney to start immediately, at a set date or when you lose mental capacity. One of the most common reasons older people invoke their enduring power of attorney is the onset of dementia.

The types of decisions a power of attorney can make

It’s up to you to decide how much authority you want to give a power of attorney, and you may choose to only give it for a one-off event with very limited and particular powers. For example, the authority to sell an investment property while you are travelling.

An enduring power of attorney tends to have more power and is often appointed to make decisions for you in old age, but can also be appointed if you have a terminal illness or ongoing health issues. The more wide-ranging powers may include authority to open and close bank accounts, manage superannuation and enter into contracts with health care providers.

For legal and financial decisions, a power of attorney can manage whatever decisions you choose, as little or as extensive as you like, and this applies to a general power of attorney and an enduring power of attorney.

For medical, health and lifestyle decisions the rules around power of attorney vary from state to state – NSW, QLD, WA, VIC, TAS, NT, SA and ACT. It may be a good idea to get legal advice from a professional that specialises in wills and estate planning. They can help you work through what you need and how to set up a power of attorney.

Nominating a power of attorney

You want to be sure you trust whoever you nominate as your power of attorney, which seems obvious since you’ll be giving them the power to make some big decisions on your behalf. You may also want to consider whether the person is good with paperwork and making financial decisions before you go ahead and nominate them. For most people, a spouse or partner, life-long friend or relative, such as a child, is the favourable choice. But you can also choose a supplementary power of attorney to step in if something happens and your original power of attorney can no longer do it due to illness or an accident. As an example, you may choose a partner or spouse to be your power of attorney and then two of your children to be the supplementary powers of attorney.

A trustee organisation can also be nominated if you think your legal and financial affairs are particularly complex. And you can always cancel or revoke a power of attorney – as long as you are of sound mind.

Establishing an enduring power of attorney

Since establishing an enduring power of attorney can be quite a serious matter, you must be at least 18 years old to do it. You must also have the mental capacity to understand what you’re doing. Once you’ve ticked off those eligibility criteria, you have to complete and sign an enduring power of attorney document. Someone legally qualified to act as a witness – such as a solicitor, barrister, licensed conveyancer or employee of the public trustee of the state – will need to be present while you do that. They’ll also need to sign a document that states the enduring power of attorney was explained to you and that you understood the explanation. Anyone named in the document will also be required to sign as an indication that they accept their responsibilities.

Plan for your future

Taking care of the things that matter when it comes to your financial affairs can provide great peace of mind. Once you’ve ticked ‘establishing your power of attorney’ off your list, you may feel inspired to prepare in other ways for your financial future. Perhaps it’s time to write – or review – your will, or take a fresh look at your life insurance options. Suncorp Life Insurance offers a range of different products to suit your needs, lifestyle and budget, whether you’re young and single, having a family or simply want to support loved ones in the event of your death or terminal illness.

Giving thought and attention to these matters can let your loved ones know what you want for your future so they can best fulfil your wishes.

Get a Life Insurance online quote within minutes, or use our Life Insurance Calculator to help calculate the right amount of cover for you and your family.

If you have any questions about the kind of Life Insurance policy to best suit your needs, you can talk to our Suncorp Life Insurance specialists on 13 11 55.

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Suncorp Life Insurance products, other than in some circumstances the Redundancy Benefit, are issued by TAL Life Limited ABN 70 050 109 450 AFSL 237848 (TAL Life) which is part of the TAL Dai-ichi Life Australia Pty Limited ABN 97 150 070 483 group of companies (TAL). TAL companies are not part of the Suncorp Group. TAL Life uses the Suncorp brand under licence from the Suncorp Group. Redundancy Benefit provided on or before 31st March 2020 was issued by AAI Limited ABN 48 005 297 807 AFSL 230859 (AAI) which is part of the Suncorp Group. New Redundancy Benefit policies and renewals offered from 1st April 2020 are issued by TAL Life. The different entities of TAL and the Suncorp Group of companies are not responsible for, or liable in respect of, products and services provided by the other.

This information is general advice only and does not take into account your individual needs, objectives or financial situation, so before acting on it you should consider whether it is appropriate for you. Before you decide to buy or to continue to hold an insurance product, please read the Product Disclosure Statement (PDS). The PDS contains important information which will help you understand the product, including what's covered and what's not covered. The Target Market Determination (TMD) for the product is also available.

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