What is an Enduring Power of Attorney in NSW?

A Power of Attorney is one of three documents that are commonly prepared during the estate planning process, being: a Will, Power of Attorney, and Enduring Guardianship form. 

A Power of Attorney is a legal document that allows anyone over the age of 18 years of age (the Principal) to appoint someone else (the Attorney) to make legal and financial decisions on their behalf. 

Unlike a General Power of Attorney, an Enduring Power of Attorney continues to operate if the Principal loses the mental capacity to make decisions for themselves due to age, accident or illness.

Depending on the type of Power of Attorney, the Principal can choose when the powers commence for the appointed person. For example, the Principal can choose for the powers can commence immediately upon signing or at a later date; for instance, in the event the Principal loses capacity (and has received a document from a medical practitioner confirming the Principal’s loss of capacity). 

A Principal can appoint one person or multiple people to act jointly to manage financial and legal affairs. 

An Enduring Power of Attorney also provides peace of mind by ensuring a trusted person will look after your financial affairs if you become incapacitated.

The Legal Limitations of a Power of Attorney

A Power of Attorney allows you to appoint someone to make legal and financial decisions on your behalf, manage your affairs, such as paying day-to-day living expenses and bills, buying property, selling property, and completing legal documentation. The Attorney can manage your financial affairs generally. 

A valid Power of Attorney is legally binding until revoked, and third parties may rely on a Power of Attorney document when allowing the Attorney to make decisions on behalf of the Principal. 

Inability to Create or Alter a Will

A person appointed under an Enduring Power of Attorney does not have the power to change the Principal’s will. 

Depending on the state, if the Principal has lost capacity but the Enduring Attorney has good reason for believing the Principal’s will should be changed (due to unintended outcomes which will arise from an existing will, on intestacy, or because of extended estrangement) the Attorney may be able to make an application to the relevant Supreme Court for a ‘statutory will’, where the court makes a new and more suitable will for the incapacitated person who has lost legal capacity. Strict criteria apply in the case of statutory wills. 

Limitations on Financial and Property Decisions

Unless the Principal limits the powers granted to the Attorney, the Attorney will be authorised to make any decisions in relation to finances or property that the Principal would themselves have been able to make. 

In order for the Attorney to undertake property transactions, the Power of Attorney must be registered with the NSW Land Registry Services.

Restrictions on Making Beneficiary Changes

Neither an attorney appointed under a General Power of Attorney or Enduring Power of Attorney has the power to change a will or beneficiary. 

Power of Attorney’s Authority Ends Upon Death

The authority given to an Attorney under a General Power of Attorney or Enduring Power of Attorney ends upon the death of the Principal. 

Legal Recourse for Exceeding Power of Attorney Authority

The Attorney must act in accordance with the express and implied powers provided to them under the Power of Attorney form. 

The Attorney must act in the Principal’s best interests. 

An Attorney who exceeds their express or implied authority may be at risk of removal and, in serious cases, criminal charges and imprisonment and may also be liable to compensate the Principal (or if the Principal has died, their estate) for any amounts unlawfully or improperly withdrawn or expended from the estate. 

Depending on the jurisdiction, an application to remove an Attorney can usually be made to the relevant Supreme Court or tribunal. 

Can a Power of Attorney Change a Will in NSW?

An Attorney appointed under a Power of Attorney does not have the power to change a will.

Differences Between a Power of Attorney and an Executor

A Power of Attorney is a document within which a person appoints another person to manage their legal and financial affairs while they are alive. A Power of Attorney can help protect your interests while you are alive by appointing someone to manage your affairs and act on your behalf if you are unable to manage them yourself. 

Whereas an executor is the person or persons who are named in a will by the testator to administer the deceased’s estate. An executor will be responsible for ensuring your estate is administered in accordance with the terms of your will and protects the interests of your estate and beneficiaries. 

The two roles are mutually exclusive and do not overlap in any way in their legal effect. 

How to Protect a Will from Unauthorised Changes

When you need to make changes to your will, following the correct legal procedures is essential to ensure the changes are valid and enforceable.

If an unauthorised person attempts to change a will without the testator’s knowledge and approval, the changes will not be legally recognised. This can lead to legal disputes among potential beneficiaries. Where the validity of a will is in question, the court may need to intervene to determine the validity of the will and any changes made to it. To avoid these complications, it is important to keep the original will and any formal amendments, known as codicils, in a safe location.

Consult with a Qualified Legal Professional

Before making any changes, it is important to consult with a qualified legal professional, such as an experienced wills and estate lawyer. At Empower Wills and Estate Lawyers, we can provide legal advice and ensure that the changes comply with the relevant laws and regulations. 

Create a New Will if Necessary

A person who wants to change their will can usually do a new will or execute a codicil.

It is usually preferable to prepare a new will, but in some select cases, it may be more convenient to prepare a codicil, which amends an existing will without having to rewrite the entire will.

In either case, it is important to comply with any formal requirements that apply in relation to wills in the specific jurisdiction.

Store Documents in a Safe Place

After executing a new will or codicil, it is important to store the original documents in a secure location (such as with a solicitor, NSW Trustee of Guardian, or the Supreme Court). You may (but are not obliged) to inform your executor and trusted family members of the location of the original or copies of the will or provide them with certified copies of the documents. 

What to Do if You Suspect Misuse of a Power of Attorney

If you suspect the person you have appointed is misusing their power, or your personal circumstances have changed, you should take immediate action by contacting Empower Wills and Estate Lawyers in Sydney, NSW now on 1300 414 844 to discuss your situation with a solicitor from our team of experts.

Liability limited by a scheme approved under Professional Standards Legislation. 

Disclaimer: the information in this article relates to NSW law as at the date it was written and is general information only. It does not constitute legal advice and should not be relied upon as legal advice. It may contain information or links to sources which are no longer current. If you have a question or legal issue, we recommend you contact a lawyer and obtain legal advice that takes into account your specific facts, circumstances, needs and objectives.