Relevant legislation:
- Powers of Attorney Act 2014
- Powers of Attorney Amendment Act 2016
- Powers of Attorney Amendment Regulations 2017
- Medical Treatment Planning and Decisions Act 2016
Guardianship and Administration
- Guardianship and Administration Act 2019 (Vic)
On 1 September 2015 the Powers of Attorney Act 2014 came into force. This Act replaced the former Instruments Act sections relating to Powers of Attorney. It consolidated the Enduring Financial Power and the Personal Power into the one document. The Personal Power replaces the Enduring Power of Guardianship.
When seeing clients you should ask to see any documents of appointment such as Powers of Attorney, or any VCAT orders. Older Powers of Attorney remain valid until revoked and do not necessarily need to be redone. If revoking an older POA, care should be taken to use the revocation form that corresponds to the document. Since the Powers of Attorney Amendment Act 2016 came into effect on 1 May 2017, any new POA made will automatically revoke any other existing POA. It is important to ensure that any bank or other Institutions that may be acting on an old power, are notified immediately of the changes.
The new forms now contain both financial and personal powers in the one document. Care should be taken to discuss in detail with your client, what effect each one will have on them, both now and in the future, when they may have lost capacity.
Generally, it is advisable for a person to have Enduring Powers of Attorney in place so that the appointment of an administrator and/or guardian is not necessary in the event that the person loses capacity to manage their own affairs.
Enduring Powers of Attorney can also be misused and are not subject to the same reporting requirements and monitoring as appointments under Guardianship and Administration laws. Applications can be made to VCAT to revoke a power, or to make an order that the attorney submits details of all expenditure and dealings with a client’s funds and assets. Under the Powers of Attorney Act, s77 gives VCAT the power to order compensation of monies misused, without the necessity to make a further application to other State courts to enforce a VCAT order.
Choosing an attorney
Practical considerations
If you are drafting an Enduring Power of Attorney, be very clear that you are acting for the principal. You should take instructions from the client only and not from their relatives or friends. There is a common misunderstanding in the community that adult children can give instructions for their parent. This is particularly the case when the older person has lost capacity to both give instructions and understand the import of the documents. You have a responsibility to explain clearly to your client how each different power of attorney works, what options are available and the responsibilities of their attorneys.
Provide your client with a list of commonsense questions to consider carefully when they are appointing an attorney. For example, has the person they are considering making their attorney had a history of alcohol, drug abuse or gambling? What is their attitude to money? Or to paperwork? Are they likely to outlive the principal? Are they in regular contact with the principal, or do they see them only rarely? Has the person agreed to be their attorney? Importantly if your client is considering an Assets for Care arrangement, what are the relationships like between the proposed attorney/s and the proposed care provider.
It may be a good idea not to execute a document on the day but to allow the client time to go away and think about the contents and their choice of attorney, and then come back another time to formalise it.
Are relatives best?
The appropriate person for a client to appoint as attorney will not necessarily be a relative. It cannot be assumed that family members have the necessary knowledge and skills to make good decisions, nor that they will act in the best interests of an older person with impaired capacity. In the case of an Enduring Power of Attorney (financial), it might be advisable for the Power to be held jointly so that actions must be agreed upon by more than one person. (If siblings are in conflict, however, it is not advisable to appoint them as joint attorneys.)
You can assist in educating an attorney by giving them information about their roles and responsibilities – which include keeping accurate records, avoiding conflicts of interest, acting in the principal’s best interests. Advise them that if they do not do this they may find themselves before VCAT.
Forms of PoA
The following forms of substitute decision-making can be made by a principal:
General Power of Attorney
Limits on powers can be specified. If not, an attorney can make any financial or legal decisions on the principal’s behalf until the power is changed, cancelled or the principal loses capacity or dies.
Enduring Powers of Attorney, Financial and Personal (EPOA)
Allows the attorney to continue to make both financial and personal decisions when the principal has lost capacity.
The Enduring Power of Attorney form now includes provision for both financial and personal attorneys to be appointed. These need not be the same person.
Financial Powers
The attorney has legal obligations, such as to keep their property separate from the principal’s property. It is wise to provide prospective attorneys with printed information about their responsibilities and duties. Suitable Guidelines are available in “Take Control,” the Office of the Public Advocate’s publication on Power of Attorneys.
The date the power is activated and the responsibilities given to the attorney/s can be specified. For example, the Enduring Power of Attorney powers can be drafted so that the power may only take effect when capacity is lost and this is verified by medical evidence. Care should be taken not to just insert the phrase “when I lose capacity” as there can be arguments about who assesses when capacity is lost. The attorney/s can have limits on how they can manage assets. If no limits are given then the attorney/s can make any financial or legal decisions from the date the Power begins until cancelled or changed.
More than one attorney can be appointed to act at the same time and the appointment may be joint or several. If a joint appointment is to be made consideration should be given to the availability of possible attorneys, to avoid delay in responding to the principal’s needs. Ask who lives closest, is one attorney overseas or interstate and would having them act jointly be an issue in dealing with the often mundane issues of chemist’s accounts, and the payment of other daily expenses?
Clients may ask for certified copies of their Power of Attorney at the time of signing. Unless it is clear that this is immediately necessary for health reasons, you should keep the original and explain a certified copy can be provided at any time in the future when needed. This avoids having copies that can be used immediately, when this may not be necessary or what the Principal intended. Having a valid Enduring Power of Attorney kept in safe storage ensures that if the principal loses capacity in the future the power is always available for use.
Personal Powers (formerly Enduring Power of Guardianship (also known as appointment of Enduring Guardian)
The personal powers, which are only activated when a principal is unable to make their own decisions, can be limited to particular powers specified. An alternative attorney can be listed in the case that the first attorney is unable to act (e.g. they die, lose capacity or are absent for a period of time). This power relates to lifestyle matters such as where a principal lives, who they interact with and their activities. Responsibilities include making decisions based on wishes expressed by the principal. Care should be taken to ensure the principal fully understands what this may mean for them in the future with regard to who they see and where they live, particularly when clients are contemplating assets for care arrangements and wish to appoint their potential carer.
This form of power of attorney must be properly witnessed. One witness must be a person authorised to witness affidavits or a medical practitioner
Who can witness affidavits?
See the Justice and Community Safety page for more information on affidavits and who can witness them.
https://www.justice.vic.gov.au/affidavits#find-an-authorised-affidavit-taker
Medical Treatment Powers
The Medical Treatment Planning and Decisions Act 2016 does not revoke any previous documents that continue to be valid, however, the Personal POA will no longer be applicable to health care issues.
A person can be appointed Medical Decision Maker to make medical treatment decisions when a person has lost capacity to make their own decisions. Prior to loss of capacity, a person can also make an advance care directive to give binding instructions or an expression of their values in relation to any future medical treatment.
Forms to appoint a medical treatment decision maker or to create an advance care directive can be downloaded from the Victorian Government Department of Health: https://www.health.vic.gov.au/patient-care/advance-care-planning-forms
Changing or revoking a power of attorney
A client can change a power at any time as long as they still have capacity.
Powers of attorney and guardianship can be changed or revoked in different ways:
- The client’s death or the attorney’s resignation will extinguish a power.
- Telling the attorney(s) their power is withdrawn and destroying the document and copies, or completing a new document will also extinguish powers.
- The appointment of an administrator to undertake financial and legal decisions can extinguish powers given to attorneys (see Part XIA, Division 4 and 6 of the Instruments Act 1958).
If powers have been revoked, the previous attorney(s) and relevant agencies need to be informed.
Capacity to make an Enduring Power of Attorney
It is a requirement of all enduring powers of attorney that the principal makes the document freely and understands its nature, importance and effect and that the witnesses are satisfied of this.
See also section on Capacity
To make sure that your client has understood the nature, importance and effect of each Enduring Power of Attorney and to create a record of this for your file, it is a good idea to develop a checklist of questions to ask before executing any Enduring Power of Attorney. (See Office of Public Advocate publications.) Questions should be adapted for each client to determine whether the client is making their enduring powers of attorney voluntarily and freely, such as:
- What brought you to make your powers of attorney today?
- Has anything ever caused you to doubt your trust in your nominated attorney/s?
- Do you believe that your nominated attorney/s understand and respect your wishes and will make the decisions they believe you would make for yourself?
Suggestions for a checklist
Enduring Power of Attorney (financial)
- What is an Enduring Power of Attorney (Financial)?
- Who have you appointed?
- How are they appointed?
- Are there any limitations, conditions or instructions on your EPA financial?
- When does the power start?
- What sort of things can your attorney/s do for you?
- If you lose capacity, can the attorney/s still continue to act?
Personal Power of Attorney
- What is an appointment of a personal attorney?
- What sort of decisions can they make?
- When does the power start?
- Who have you appointed?
Advance Care directives and appointment of medical treatment decision maker or support person.
- What is an Advance Care directive?
- What is a medical treatment decision maker?
- When does the power start?
- Who have you appointed?
- When can the medical treatment decision maker act for you?
- What sort of decisions can the decision maker make?
Changing or revoking powers of attorney
Powers of attorney can be changed or revoked in different ways:
- A client can change a power at any time as long as they still have capacity.
- Since the commencement of the Power of Attorney Amendment Act 2016 on 1 May 2017, an older power is automatically extinguished by the making of a new power.
- The client’s death or the attorney’s resignation will extinguish a power.
- The destruction of the document and any certified copies will also extinguish powers.
The appointment of an administrator or guardian can extinguish powers given to attorneys, depending upon the scope of the appointment.
If powers have been revoked, the previous attorney(s) and relevant agencies need to be informed.
Abuse of Enduring Powers of Attorney (Financial)
If a client informs you that their attorney has acted without their knowledge or consent and taken or used money for their own ends, the lawyer can do a number of things such as:
- revoke the Enduring Power of Attorney (Financial) if the client still has capacity;
- ask the attorney to account for all dealings undertaken as attorney;
- apply to VCAT to suspend the Enduring Power of Attorney and audit the accounts (see section Applying to VCAT);
- apply to VCAT to revoke the Enduring Power of Attorney if the client has lost capacity (see section Applying to VCAT );
- apply to VCAT to order the Office of the Public Advocate to investigate if required;
- seek to recover misappropriated funds and assets through VCAT;
- make a complaint to the police with respect to any fraud that may have occurred.
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