A power of attorney is a document that gives a person (called either the donee, attorney or appointee) the power to act on behalf of the person or company who gives the power (called the donor, principal or appointor). The major Act that regulates general and enduring powers of attorney in South Australia is the Powers of Attorney and Agency Act 1984 (SA).
Appointing a person as an attorney is giving them the authority to deal with the donor's financial affairs . It does not give the attorney the authority to deal with other personal areas of the donor's life, such as health care, residential and accommodation arrangements, and lifestyle matters.
A power of attorney is different from an advance care directive, which enables someone to say what they want to happen in relation to certain personal areas of their life such as those relating to medical and lifestyle matters, or to appoint another person to make decisions for them regarding certain personal matters. An advance care directive can relate to their health care, residential and accommodation arrangements, and to their personal affairs. See Advance Care Directives.
In South Australia any person who is over 18 years and who has 'legal capacity' (see Loss of Legal Capacity) can make a power of attorney. The issue of whether someone under 18 years can make a power of attorney is the subject of some legal debate. If a person is under 18 and considering making a power of attorney, they should seek advice from a lawyer.
There are two different forms of powers of attorney - they have similarities but there are some important differences.
- A general power of attorney is an authority given to a donee to deal with a donor's financial affairs [Powers of Attorney and Agency Act 1984 (SA) s 5]. For example, it allows a donee to buy and sell things or to operate a donor's bank account if he or she is away on holidays overseas.
- An enduring power of attorney [Powers of Attorney and Agency Act 1984 (SA) s 6] is a power of attorney that operates even though the donor is legally incapacitated, for example is unable to communicate after a stroke, or becomes senile (see Loss of legal capacity). In these circumstances, a general power of attorney ceases to operate and actions taken under it after that time are invalid.
A general power of attorney and an enduring power of attorney both give an attorney authority to deal with a person's financial affairs. However, while a general power of attorney is cancelled automatically if a person becomes legally incapacitated, an enduring power of attorney will still be effective.
Giving either power of attorney does not mean that a person loses control over their affairs. A person can still deal with whatever matters he or she chooses, while the donee can only do the things that the form allows. However, giving a power of attorney to someone who is not absolutely trustworthy is very dangerous.
A power of attorney document provides proof of the donee's power to act on the donor's behalf. It must be shown whenever the donee is doing something in place of the donor.
It is not always necessary to make a power of attorney to deal solely with a social security pension, and other arrangements can generally be made to use a bank account on a person's behalf without going to the trouble, and risk, of making a power of attorney. However, it is unlawful to deal with someone else's money, no matter how close the two parties are, without that person's authority.
A donor acting as a trustee or personal representative for another person cannot use a power of attorney to pass on these functions to someone else [Powers of Attorney and Agency Act 1984 (SA) s 5(4)].
A power of attorney ends when the donor dies. At this point, a Will takes over [see Wills].
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.