Estate planning is often thought of as something that happens after death. In practice, some of the most important planning happens well before then. Powers of attorney, enduring guardianship appointments and advance care planning documents are about what happens while you are still alive but unable to make decisions for yourself.
These documents are closely related, frequently confused, and often left too late. When they are missing or poorly drafted, families are often forced into urgent applications to tribunals or courts during times that are already stressful.
This article explains how these arrangements work in New South Wales, how they differ, and why they form a critical part of a complete estate plan.
Why these documents matter
Loss of capacity may follow an accident, illness, or gradual cognitive decline. When it happens, decisions still need to be made - about finances, property, medical treatment and day-to-day care.
Without the right documents in place:
bank accounts can be frozen,
property transactions can stall (for example refinancing property, renting out a property, or arranging a sale),
medical decisions may be delayed, and
family members may disagree about what should happen next.
Having clear, legally effective appointments in place reduces uncertainty and removes the need for third-party intervention wherever possible.
Powers of attorney – financial and legal decisions
A power of attorney allows you to appoint someone (your attorney) to make financial and legal decisions on your behalf. This can include managing bank accounts, paying bills, dealing with property, and interacting with government bodies.
In NSW, a power of attorney can be:
general (operating for a limited purpose or period), or
enduring, meaning it continues to operate even if you lose mental capacity.
For estate planning purposes, it is usually the enduring form that matters.
One misconception is that powers of attorney are only relevant in old age. In reality, they are just as important for business owners, investors and anyone with ongoing financial commitments.
Enduring guardianship – personal and lifestyle decisions
An enduring guardian is appointed to make health and lifestyle decisions if you lose capacity. This can include:
An enduring guardian does not manage money. Their role is separate from that of an attorney, although the same person can be appointed to both roles if appropriate.
This distinction matters. Financial and personal decisions often intersect, but they are treated differently under the law.
Advance care planning – expressing your wishes
Advance care planning allows you to document your preferences about future medical treatment. This may include:
appointing a person to speak on your behalf,
recording wishes about life-sustaining treatment, or
setting boundaries around certain interventions.
These documents do not replace an enduring guardian. Instead, they guide decision-making and help ensure that your wishes are understood if difficult choices arise.
In practice, clarity here can make an enormous difference to families and treating doctors.
Capacity and timing
Capacity is a central issue for all of these documents. To make a valid appointment, you must understand:
the nature of the document,
the powers being given, and
the effect of the appointment.
Capacity is assessed at the time the document is signed. This is why timing matters. Leaving these documents until capacity is borderline can result in them being challenged or rejected entirely.
From a practitioner’s perspective, this is one of the most common and avoidable problems.
Choosing the right people
Who you appoint matters as much as the document itself.
Attorneys and enduring guardians should be:
Poor appointments can create conflict, particularly where there are blended families, business interests or unequal relationships between children.
It is also important to think about succession — what happens if the person you appoint dies, loses capacity, or becomes unwilling to act.
Common issues seen in practice
Even where documents exist, problems often arise because:
powers are drafted too narrowly or too broadly,
there is no clarity about when powers commence,
appointments conflict with existing family dynamics,
documents are inconsistent with Will structures, or
banks and institutions refuse to accept outdated or informal documents.
Fixing these issues after capacity is lost is often very complex, and can be incredibly costly.
Abuse and safeguards
Concerns about abuse of powers of attorney are well-founded. The law imposes duties on attorneys to act honestly, keep records and avoid conflicts. Breaches can have serious consequences.
That said, the risk of abuse needs to be balanced against the risk of having no authority in place at all. Proper drafting, appropriate appointments and regular review reduce risk significantly.
How these documents fit with the rest of an estate plan
Powers of attorney, enduring guardianship and advance care planning should not sit in isolation. They should align with:
Inconsistent documents can undermine otherwise careful planning.
Review and updating
These documents are not “set and forget”. They should be reviewed when:
relationships change,
assets are acquired or sold,
health circumstances evolve, or
there are changes in the law.
Outdated documents can be almost as problematic as having none.
Key takeaway
Powers of attorney, enduring guardianship and advance care planning deal with some of the most practical and sensitive issues people face. When prepared properly, they provide clarity and continuity. When overlooked, they often lead to delay, dispute and unnecessary stress.
They are a fundamental part of estate planning, not an optional extra.
Related Guides — Wills & Estates Law in NSW
Planning for your future decision‑making and incapacity is an important part of a comprehensive estate plan in New South Wales. The following guides explore other key aspects of wills, estate planning, and estate administration to help you understand what happens both before and after someone dies.
Speak to an estate planning lawyer
Our estate planning solicitors have decades of experience preparing and advising on powers of attorney, appointments of enduring guardian, and advance care directives. If you’d like help with preparing your estate plan, give us a call or submit an enquiry to speak to a specialist wills and estate lawyer now.
