Most people put off thinking about what happens if they can no longer manage their own affairs. It is not a comfortable topic. But the documents that cover this situation only work if they are put in place while you still have the capacity to make them, which means the decision cannot be left until it is needed.

Navigating the different types of documents you can enter into to help manage your affairs, if you lose the ability to do so yourself, can be complicated. Here is an explainer on powers of attorney, enduring guardianships and advance care directives, and how each one differs.

What Is a Power of Attorney?

A power of attorney is a legal document that lets one person appoint another person, or several people, to make financial decisions or sign documents on their behalf. The person giving the authority is usually called the principal, and the person receiving the authority is called the attorney. The attorney does not need to be a lawyer.

In everyday terms, it is a way of choosing someone you trust to help manage financial, property or legal matters.

For example, if Alex is overseas for three months, Alex might appoint his sister to deal with his bank, sign documents for a property settlement, or pay important bills while he is away.

General Power of Attorney

There are different types of powers of attorney. A general power of attorney is usually used for a particular purpose or period of time. It only works while the person who made it still has mental capacity. If that person loses the ability to make decisions for themselves, the general power of attorney usually ends.

For example, Maria might appoint her brother under a general power of attorney to manage her finances while she is travelling. If Maria later becomes seriously ill and can no longer understand or make financial decisions, her brother’s authority would usually stop.

Enduring Power of Attorney

An enduring power of attorney is different because it continues even after the person loses mental capacity. It is often used as part of future planning, especially for financial and property matters.

For example, John appoints his daughter under an enduring power of attorney. Years later, John develops dementia and can no longer manage his money. His daughter can continue paying his bills, dealing with his bank and managing his property, as allowed by the document.

This is the key practical difference between the two. A general power of attorney is a short term convenience. An enduring power of attorney is a planning tool, designed for exactly the situation where the principal can no longer act for themselves.

What Is an Enduring Guardianship?

An enduring guardianship is about personal, lifestyle and health decisions, rather than financial matters. A person can appoint an enduring guardian to make decisions for them if they lose capacity in the future. These decisions might include where the person lives, what support services they receive, or what medical or dental treatment they have.

For example, Lee appoints his spouse as enduring guardian so that, if Lee cannot make decisions later, his spouse can decide what care arrangements are best for him.

It is worth noting that an enduring power of attorney does not cover these decisions. An attorney appointed for financial matters has no authority to decide where a person lives or what treatment they receive. The two documents do different jobs, which is why many people put both in place.

What Is an Advance Care Directive?

An advance care directive is a document that records a person’s wishes about future medical treatment and care. It helps guide doctors, family members and decision makers if the person cannot speak or decide for themselves.

For example, Priya may state that if she has a terminal condition with no real prospect of recovery, she does not want life prolonging treatment such as artificial ventilation, but does want pain relief and comfort care.

An advance care directive records your wishes directly, rather than appointing someone to decide on your behalf. It can sit alongside an enduring guardianship, giving your guardian clear guidance about what you would have wanted.

The Difference in Short

Put simply, a power of attorney usually deals with financial and legal matters, an enduring guardianship deals with personal and health decisions, and an advance care directive records a person’s wishes about future medical care.

Together, these three documents cover the decisions that need to be made when someone can no longer make them alone. They are separate documents with separate requirements, and each one needs to be prepared correctly to be effective when it matters.

If you want to put any of these in place, we can help. Get in touch to discuss your situation and our experienced team will explain your options in plain English.