Power of Attorney
What is a Power of Attorney?
A power of attorney is a legal document that authorises an individual to manage another person’s financial, legal, or personal affairs. It remains in effect while the principal is alive and requires someone to make decisions on their behalf. Once the principal passes away, the authority granted to the attorney ceases.
Legislation
The Power of Attorney Act 2014 (‘the Act’) commenced on the 1 September 2015. All power of attorneys created in Victoria after this fate must comply with the Act. The Act establishes various types of power of attorneys, including:
- General (non-enduring) power of attorney;
- enduring power of attorney; and
- supportive power of attorney.
General Power of Attorney
A general power of attorney authorises one or more individuals to act on the principal’s behalf, usually for a designated period. This might include tasks such as selling the principal’s property or representing them while they are abroad. However, this authority is only valid if the principal retains legal capacity. It automatically becomes invalid if the principal loses that capacity.
Enduring Power of Attorney
An enduring power of attorney is a legal document that allows the principal to appoint someone to make decisions about their financial or personal affairs on their behalf. The principal can designate one or more attorneys and assign them to different tasks. These powers of attorney generally take effect when the principal loses decision-making capacity. However, the principal retains the right to revoke an enduring power of attorney if they possess decision-making capacity.
Witnessing requirements:
- The document must be signed by two independent adult witnesses, one of whom must be an authorised witness, in the presence of the principal and each other.
- Relatives, appointed attorneys, care workers, and accommodation providers are excluded from being witnesses.
- If the principal cannot sign, a person over 18 may do so on their behalf.
- Witnesses must affirm that the principal signed voluntarily and appeared to have decision-making capacity.
- The appointed attorneys need to sign an acceptance in front of a witness, either simultaneously with the principal or at a different time.
Supportive Power of Attorney
A supportive power of attorney allows a principal to designate one or more adults to help them with making, conveying, and executing decisions. You can appoint a supportive attorney to:
- Obtain information about you from organisations;
- Relay your decisions to organisations; or
- Take appropriate actions to enact your decisions.
Unlike a general or enduring power of attorney, a supportive power does not grant the attorney the authority to make decisions on the principal’s behalf. The power terminates automatically if the principal loses decision-making capacity. Additionally, a supportive power of attorney cannot be used for financial or real estate transactions exceeding $10,000, nor can it provide formal support for decisions regarding medical treatment.
Capacity
You can establish a power of attorney at any time, provided you are 18 or older and have the capacity to make decisions. This means you should be able to:
- Understand the information necessary for making the decision;
- Retain and recall the information as needed;
- Evaluate and use the information in making the decision; and
- Express your decision, opinions, and needs regarding the decision.
How Do I Revoke a Power of Attorney?
To revoke a power of attorney, you must first ensure that you have decision-making capacity. Next, you need to draft and execute a new legal document stating that it revokes the previous power of attorney. This new document should be signed and witnessed according to legal requirements to ensure revocation is valid and enforceable.
Who to Appoint as Your Attorney?
An attorney must be 18 or older and someone you have full confidence in to represent your interests effectively. When choosing an attorney, consider practical aspects such as their location, age, and readiness to accept the role. It’s also essential to assess their ability to manage the responsibilities and reliability in making decisions that align with your wishes. Ensure that the person you select is willing and capable of fulfilling the role competently.
What Happens If I Don’t Have a Power of Attorney and I Don’t Have Capacity?
Without a power of attorney in place your spouse or family member will have to petition the Victorian Civil and Administrative Tribunal (VCAT) to gain legal authority to act on your behalf. This process can be both expensive and time-consuming, which underscores the importance of establishing a power of attorney before any potential issues arise. Having this document prepared in advance can save significant time and expense, providing peace of mind and clarity in managing your affairs.
