When Does Enduring Power of Attorney Take Effect

It Depends on What the Document Says

An enduring power of attorney may operate when it is signed or on a later trigger. The principal — the person granting the power — chooses when it takes effect. Across Australian states and territories, the standard options are:

• Immediately on signing — the attorney can act straight away, even while the principal retains full capacity
• On a specific date or event — useful for planned absences or hospitalisation
• Only upon loss of capacity — the most common choice, where the attorney can only act after the principal loses decision-making ability

This choice is built into the EPOA form itself. If the document does not specify a commencement trigger, the default varies by state; do not assume that the financial powers start immediately.

The Capacity-Trigger Problem

Most families choose the capacity trigger because it feels protective — the attorney only gains power when the parent can no longer manage their own affairs. But this creates a practical problem: who determines that capacity has been lost, and how?

There is no automatic process. The attorney cannot simply declare that the principal has lost capacity. Instead, they need medical evidence — typically a letter or certificate from the principal's GP, geriatrician, or specialist stating that the person no longer has decision-making capacity for the relevant type of decisions.

Banks and institutions may ask for this evidence before recognising the EPOA. The attorney may walk into a bank branch with the document and be asked for proof that the principal has lost capacity. If the attorney cannot produce the evidence the institution requires, the transaction may not proceed.

What "Loss of Capacity" Actually Means

Capacity is a legal concept, not a medical diagnosis. A person has capacity if they can:

• Understand the nature and effect of the decision being made
• Retain the relevant information long enough to make a choice
• Weigh the risks, benefits, and consequences
• Communicate their decision

Capacity is decision-specific. A person might have capacity to decide what to have for dinner but lack capacity to understand a complex financial transaction. It can also fluctuate — someone with early dementia may have "good days" and "bad days."

This means a single broad declaration of incapacity is not always appropriate. The medical evidence should address whether the person has capacity for the specific type of decisions covered by the EPOA — typically financial decisions.

The Immediate Commencement Alternative

Some families choose immediate commencement precisely to avoid the capacity-trigger problem. With immediate powers, the attorney can act from the day the document is signed, regardless of the principal's cognitive state.

This works well when the principal is physically frail but mentally sharp — they can supervise the attorney's actions and intervene if something goes wrong. It also avoids the scramble for medical certificates when capacity declines gradually.

The trade-off is trust. An attorney with immediately active powers could theoretically misuse them while the principal is still alive and has capacity. Safeguards include appointing joint attorneys (requiring both to agree on transactions), including reporting obligations in the EPOA, and choosing an attorney whose financial judgment and integrity are beyond question.

The Attorney's Acceptance

Even after the chosen commencement trigger is met, the EPOA is not effective for the named attorney until they sign a formal Statement of Acceptance. The principal and witnesses must sign on the same day in each other's presence, but the attorney can sign their acceptance later.

Until the attorney signs the acceptance, they have no legal authority. If you have been named as an attorney and have never signed the acceptance, no bank or institution will recognise you — regardless of what the EPOA says or whether the principal has lost capacity.

For a complete walkthrough of EPOA activation — including state-specific commencement rules, capacity evidence requirements, and bank acceptance steps — see our Enduring Power of Attorney and Guardianship in Australia guide.

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