Most Australians will know what a will is, and some of those people will have a rough understanding of powers of attorney. But there are details you should know about.
Knowing a bit more about both wills and powers of attorney will help you make good decisions. Let’s take a closer look at wills and powers of attorney, and how they are different.
What is a will?
A will is a legal document that lets you share instructions for what you want done with your estate after you die. Your estate includes your belongings, your assets and any other things you own.
Your will only takes effect when you die. It can’t be used in cases where you are still alive, even if your injury or illness means you can’t make your own decisions anymore. To protect yourself and your loved ones in situations like this, you’ll need to create a power of attorney document.
What is a power of attorney?
A power of attorney is what lets you appoint someone, a person or organisation, to make important decisions on your behalf during your lifetime. The person you choose to be your attorney can be a family member, a friend, or an organisation like State Trustees.
There are a few types of powers of attorney. There is a general non-enduring power of attorney that appoints a person to act on your behalf for specific purposes, such as while you are overseas. This type of power of attorney will end once the specific purpose has been completed, or once it is revoked.
Another type is an enduring power of attorney. An enduring power of attorney authorises a person to make decisions about financial and/or personal matters for you during your lifetime. You can choose when it begins, however it will continue if you lose capacity. That is, when you can no longer make decisions on your own. It is designed to ensure that decisions are made in your best interests in case you can no longer do that for yourself.
Typically, powers of attorney will cease once you die, unless they have revoked by you earlier. After you die, your will becomes the most important document.
If you would like to learn more terms used in wills and powers of attorney, check out our Wills and Powers of Attorney Dictionary here.
What is the difference between a will and a power of attorney?
One of the main differences between a will and power of attorney is when they take effect. A will is a legal document that sets out your wishes for what you would like to have happen to your estate when you die, and takes effect after your death. On the other hand, a power of attorney is a legal document which authorises the person you nominate to act on your behalf and takes effect during your lifetime.
The executor (the person in charge of carrying out your will) has a specific and limited job description. They need to make sure your property and assets are properly distributed. The person or organisation that you have appointed as your attorney will make all kinds of important decisions, but only while you are still alive.
Can the same person hold power of attorney and be the executor of your will?
Yes, the same person or organisation that you name as executor of your will can also be appointed as your attorney. It’s common, because both roles hold responsibilities that you might want entrusted to a particular person or organisation, such as State Trustees.
Naming someone as executor of your will does not automatically give them power of attorney though or the other way around. You still need to create two separate documents, a will and a power of attorney document, to make sure you’re covered for both situations.
Get in touch with State Trustees
For support in writing a will or creating a power of attorney document, you can look to State Trustees. We provide Wills and Powers of Attorney Appointment both in-person and via video call to help ensure that you have the support you need to make arrangements that align with your wishes.
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