An enduring power of attorney is one of the most useful documents a person can make, and one of the most consequential. It hands a trusted person authority over decisions that would otherwise be yours alone. Made carefully, it means that if illness or injury takes away your capacity to decide, someone you chose can act promptly, without an application to a tribunal. Made carelessly, it can expose you to loss.
Personal matters and financial matters
The Powers of Attorney Act 2014 allows a person to appoint an attorney for personal matters, financial matters, or both. Personal matters concern your personal or lifestyle affairs, including day-to-day living arrangements and with whom you associate. Financial matters concern your property and financial affairs.
The Act limits what an attorney can do. An attorney cannot make a will for you, cannot vote on your behalf, cannot consent to a marriage or to the dissolution of a marriage, and cannot make decisions about the care and wellbeing of your children (section 26). An attorney also cannot make medical treatment decisions under that appointment.
When the power begins
An enduring power of attorney for financial matters can be expressed to take effect immediately, on a specified date or occasion, or when you no longer have decision-making capacity. For personal matters, the power comes into effect only when you do not have decision-making capacity for the matter (section 39). If the instrument does not specify, the default under the Act applies, which is why the commencement provisions should be considered deliberately rather than left blank.
Choosing attorneys, and how they act together
More than one attorney may be appointed, and the instrument should say how they are to act — jointly, so that all must agree; jointly and severally, so that any one of them may act alone; or by majority. Alternative attorneys can be named to act if an appointed attorney is unavailable or ceases to act.
Joint appointments protect against unilateral decisions but can stall if the attorneys disagree or one becomes unreachable. Several appointments are convenient but rely wholly on each attorney’s judgment. The choice should reflect the people concerned, not a general preference.
Conditions, instructions and limitations may be included — for example, excluding a particular asset, requiring accounts to be provided to a named family member, or limiting authority to a defined class of transactions.
Supportive attorneys
The Act also allows the appointment of a supportive attorney. A supportive attorney does not make decisions for you. The role is to support you to make and give effect to your own decisions — accessing information, communicating your decisions and doing what is reasonably necessary to implement them, within the scope of the appointment (section 85). It suits a person whose capacity is intact but who needs practical assistance.
Attorney duties, conflicts and records
An attorney under an enduring power of attorney must act honestly, diligently and in good faith, exercise reasonable skill and care, and avoid acting where there is or may be a conflict of interest unless authorised. An attorney for financial matters must keep accurate records and accounts of dealings and transactions, and must keep your property separate from their own unless it is jointly owned.
Where an attorney misuses the appointment, VCAT has jurisdiction to intervene: it can revoke or suspend the appointment, and it can order an attorney to compensate for loss caused by a contravention of the Act. Serious misuse may also attract offence provisions. Concerns about an attorney’s conduct should be raised promptly, because recovery becomes harder with time.
Capacity, and who can make an appointment
Only a person with decision-making capacity may make an enduring power of attorney. Capacity is assessed in relation to the decision at hand, and it is presumed unless there is reason to conclude otherwise. A family member cannot make an enduring power of attorney on someone else’s behalf, however well-intentioned. If capacity has already been lost, the pathway is an application to VCAT for the appointment of a guardian or administrator.
This is the practical reason these documents should be made early. The window in which they can be made is the window in which they are least likely to feel necessary.
Revocation and ending an appointment
While you have decision-making capacity for the matter, you may revoke an enduring power of attorney. Revocation must be in writing in the manner the Act requires, and the attorney must be notified. An attorney may also resign, and the Act sets out how that is done and who must be told. Copies held by banks, land titles offices, accountants and aged care providers should be replaced when a document is revoked or amended, because a superseded document left in circulation continues to look valid.
General non-enduring powers of attorney
A general non-enduring power of attorney is a different instrument. It authorises another person to act for you in financial matters for a limited purpose or period — while you are travelling, for instance, or to complete a single transaction — and it ceases to have effect if you lose decision-making capacity. It is a convenience document, not a substitute for an enduring appointment.
Medical treatment decisions
Medical treatment decision-making in Victoria is governed by the Medical Treatment Planning and Decisions Act 2016 (Vic). Two instruments matter.
First, you may appoint a medical treatment decision maker, who may make medical treatment decisions for you if you do not have decision-making capacity for the decision. Second, you may make an advance care directive, which can contain an instructional directive — a binding consent to or refusal of specified medical treatment — and a values directive recording your preferences and values to guide decisions made for you.
The Act sets an order of priority for who makes a medical treatment decision where you cannot: an appointed medical treatment decision maker first; if there is none, a guardian appointed by VCAT with authority for the decision; and if neither, the first person in a listed order of relationships who is in a close and continuing relationship with you (section 55). Relying on the default order means the decision may fall to someone you would not have chosen, which is the argument for making the appointment.
Without a valid appointment
If capacity is lost and no valid appointment exists, financial and personal decisions may require an application to VCAT for an administrator or a guardian. That process takes time, involves evidence and a hearing, and results in an appointee chosen by the Tribunal rather than by you. Medical treatment decisions fall to the statutory order described above. Neither outcome is unworkable, but both are avoidable.
Practical points
- Make the financial and personal appointment and the medical treatment appointment together; they cover different decisions.
- Choose attorneys for judgment and reliability, not seniority within the family.
- Say expressly how multiple attorneys must act, and name alternatives.
- Keep records: an attorney for financial matters must be able to account.
- Review documents after separation, bereavement or a falling-out, and destroy stale copies.
How we can help
Holt & Macdonald prepares enduring powers of attorney, supportive attorney appointments, appointments of medical treatment decision makers and advance care directives for clients in Ringwood and Melbourne’s eastern suburbs, usually alongside a will. We also advise attorneys on their duties, act where an appointment has been misused, and act in VCAT guardianship and administration matters where an appointment was never made or can no longer be relied on.
