You Choose Now, or a Tribunal Chooses Later: The Consequences of Having No Enduring Power of Attorney

There is a version of estate planning that most people instinctively understand: if you die without a Will, the law decides who gets your assets. The intestacy rules are impersonal, occasionally counterintuitive, and indifferent to whatever you might have wanted. Most people accept this as a reason to make a Will.

There is a second version of this problem that is less well understood and in many respects, more immediate. If you lose mental capacity without an Enduring Power of Attorney in place, the law also steps in. But unlike intestacy, the consequences of this gap do not wait for your death. They arrive while you are still alive, and they affect every financial decision that needs to be made on your behalf, potentially for the remainder of your life.

The NCAT Guardianship Division Case Digest, published twice yearly and drawing on decisions from the Guardianship Division of NCAT, the NCAT Appeal Panel, and the NSW Supreme and Court of Appeal, offers a candid account of how this plays out in practice. Issue 1 of 2026 contains two decisions that between them illustrate the full arc of what inadequate planning means for individuals and their families.

When Someone Else Is Running Your Financial Life

Richard (a pseudonym) is 77 years old. He lives in a residential aged care facility and has been subject to both a guardianship order and a financial management order since 2022. In early 2025, those orders were renewed by NCAT, appointing the NSW Public Guardian and the NSW Trustee and Guardian, a government agency to manage his personal and financial affairs for a further twelve months.

Richard is not a passive participant in this arrangement. He applied to NCAT to have the financial management order revoked. He told the Tribunal that he would be moving back to his own home and that he had the capacity to look after his own finances. He wanted control back.

The Tribunal in Richard (a pseudonym) [2026] NSWCATGD 5, decided 7 April 2026 and reported in the NCAT Guardianship Division Case Digest Issue 1 of 2026, declined. While Richard was able to manage day-to-day financial matters, the Tribunal was not satisfied that he could independently manage the complexity of his overall financial situation, which included a property dispute arising from his late mother's estate, ongoing aged care fees, and the planning required to support his transition from residential care back to his own home. A reviewable financial management order was renewed for a further twelve months.

The outcome is not presented as a punishment or a failure. It is presented, by the Tribunal and by the system within which it operates, as a protection as the "best interests" of a man whose situation is genuinely complex. And it may well be. But it is worth sitting with the reality of what a financial management order means in practice for someone in Richard's position: the NSW Trustee and Guardian controls his bank accounts, manages his assets, makes financial decisions on his behalf, and charges fees from his estate for doing so. Richard wanted to be rid of it. He was not permitted to be.

How People End Up in This Position

Understanding how Richard or anyone comes to be under a financial management order requires understanding what happens in the absence of an Enduring Power of Attorney.

An Enduring Power of Attorney (EPoA) is a legal document made under the Powers of Attorney Act 2003 (NSW) while a person has mental capacity, appointing someone of their choice to manage their financial and legal affairs. The critical feature of an enduring instrument is that it continues to operate or specifically takes effect if the principal later loses capacity. It is the mechanism by which a person, while they can still make an informed choice, nominates and authorises a trusted person to act on their behalf when they no longer can.

Without an EPoA, there is no mechanism. When capacity is lost, no one – not a spouse, not an adult child, not a sibling – automatically acquires the legal authority to manage another person's financial affairs. A husband cannot simply step into his wife's bank account on her behalf. An adult daughter cannot instruct a solicitor on her father's behalf or sign contracts in his name. A personal Power of Attorney one without the "enduring" designation automatically ceases to operate the moment the principal loses capacity. It is precisely at the point when it would be most needed that an ordinary Power of Attorney becomes worthless.

When there is no EPoA, the only pathway is a formal application to NCAT's Guardianship Division for a financial management order under the Guardianship Act 1987 (NSW). That application requires evidence that the person lacks financial capacity. It requires a hearing. It takes time. And it produces an outcome that reflects what NCAT not the person who has lost capacity, considers appropriate, on the basis of the evidence available to it at the time of the hearing.

A Government Agency Comes Calling

The second decision in the Digest that bears directly on this point is Fiona (a pseudonym) [2026] NSWCATGD 1, decided 17 February 2026. Fiona is an 82-year-old woman living in a residential aged care facility. She had not paid her accommodation fees or other expenses for an extended period. Attempts to resolve the issue had been unsuccessful.

The applicant was not a family member. It was HammondCare – the aged care company operating the facility where Fiona lives acting through a solicitor. HammondCare applied to NCAT for a financial management order to be made in respect of Fiona.

Two legal issues arose. First, whether a corporation has standing to make a financial management application at all that is, whether it is a "person" within the meaning of the Guardianship Act. The Tribunal confirmed that it does. A company that is sincerely concerned about a resident's welfare even if that concern coexists with a desire to recover unpaid fees can bring a financial management application, provided it meets the test of having a "genuine concern for the welfare of the person". HammondCare was found to meet that test, primarily on the basis that there appeared to be a lack of transparency about how Fiona's aged care pension was being used and that the situation was detrimental to Fiona's interests.

The Fiona case is a reminder that financial management applications are not always initiated by family members acting with warmth and affection. They can be initiated by creditors, service providers, or institutions that have a financial stake in the outcome. The person who lacks capacity and who has left no advance instructions about who should manage their affairs has no say in who initiates the process and limited influence over who is ultimately appointed.

The Financial and Personal Cost

When NCAT makes a financial management order, it appoints either a private financial manager, a family member or friend willing and able to take on the role or the NSW Trustee and Guardian as manager of last resort.

The NSW Trustee and Guardian is a government agency constituted under the NSW Trustee and Guardian Act 2009. When appointed as a person's financial manager, it takes control of that person's financial and legal affairs: operating bank accounts, managing assets, paying bills, making investment decisions, and managing property transactions. All funds are paid into an account maintained by the Trustee. Decisions are made by a dedicated team within the agency.

The Trustee charges fees for these services. Those fees are calculated as a percentage of the assets under management, with additional charges for specific transactions and activities. They are paid from the person's own estate. The cost of having a government agency manage your financial affairs for five or ten years, not uncommonly, the timeframe involved in aged care situations is a meaningful deduction from the wealth that might otherwise have passed to your family.

Beyond cost, there is the question of control. A person under a financial management order cannot independently operate their bank account, sell their property, or instruct a solicitor to act on their behalf without the involvement of the financial manager. As Richard's case demonstrates, even an application to have the order revoked may be refused if the Tribunal is not satisfied that the person has regained sufficient capacity to manage their own affairs independently.

The 2023 NSW Audit Office report on managing the affairs of people under financial management and guardianship orders noted the significant demand for these services and the complexity of many clients' circumstances. Thousands of NSW residents are under financial management orders at any given time. For many, the pathway into those arrangements was the absence of an EPoA that would have allowed a trusted person to act without NCAT's intervention.

The Critical Timing Constraint

The aspect of this framework that most people find confronting once it is properly explained to them is the timing constraint. An EPoA can only be made by a person who has mental capacity at the time of execution. Once capacity is lost, the window closes. There is no mechanism under NSW law by which a person can be assisted to execute an EPoA retrospectively after their capacity has deteriorated.

This constraint interacts in important ways with the gradual nature of cognitive decline. Dementia does not typically arrive as a sudden event. It progresses over months or years, with fluctuating capacity, periods of clarity, and areas of preserved function alongside areas of deterioration. During that progression, a person may appear to themselves and to their family to have sufficient understanding to make decisions while, in fact, lacking the legal capacity required to execute a valid enduring instrument.

The law requires not just that the person has some understanding but that they specifically understand the nature and effect of what they are signing. The NSW Court of Appeal confirmed in Singer v No Defendant [2026] NSWCA 38, reported earlier in the same edition of the NCAT Guardianship Division Case Digest, that the requirements for a valid EPoA are precise and non-negotiable. A prescribed witness must certify, at the time of execution, that they explained the instrument to the principal and that the principal appeared to understand it. That certificate cannot be provided retrospectively once the opportunity has passed.

For many families, the painful realisation arrives when a parent's bank refuses to accept instructions from an adult child who has no formal authority to act, or when a property cannot be sold because the owner is no longer able to sign a contract. By the time the problem becomes visible, it is often too late to fix it without tribunal intervention.

The Two Documents That Work Together

An EPoA deals with financial and legal decisions. It does not authorise the attorney to make decisions about the principal's personal care, accommodation, or medical treatment. Those decisions fall within the scope of a separate instrument: an Enduring Guardianship Appointment made under the Guardianship Act 1987 (NSW).

An Enduring Guardianship Appointment allows a person, while they have capacity, to nominate a trusted individual to make personal and lifestyle decisions on their behalf if they later become unable to make those decisions for themselves. Without one, NCAT may appoint a guardian which may or may not be a family member and which operates under the oversight of the Public Guardian.

Together, an EPoA and an Enduring Guardianship Appointment give a person comprehensive advance authority over who acts for them across both financial and personal domains. They are not complicated documents. They do not require ongoing maintenance. But they must be executed while capacity exists and they must be executed correctly.

What the Digest Cases Teach Us

Reading the NCAT Guardianship Division Case Digest in its entirety case after case of elderly people whose financial and personal affairs have been placed under formal management one theme emerges consistently. These are not people who intended to be in this situation. They are people whose planning or absence of it caught up with them at a moment when they were no longer in a position to fix it.

Richard wanted his financial management order revoked. He was refused. Fiona had her finances managed by a government agency on the application of the facility where she lives. In case after case throughout the Digest, the common factor is a deficit of prior planning that foreclosed the choices the people involved might otherwise have made.

An Enduring Power of Attorney and an Enduring Guardianship Appointment do not guarantee a trouble-free future. But they give a person the ability to choose now, while they can who will act for them and under what terms, rather than leaving that choice to a tribunal that will make it later, according to its own assessment of what is in their best interests.

Shire Legal is a boutique law firm based in Miranda, NSW, specialising in property, business and estates law. This post is intended as general legal information only and does not constitute legal advice. You should seek advice specific to your circumstances before taking any action. References to cases from the NCAT Guardianship Division Case Digest are paraphrased from that publication and the underlying decisions on NSW Caselaw.