Changes to the Powers of Attorney Act 2014

//Changes to the Powers of Attorney Act 2014

The Powers of Attorney Amendment Act 2016, which took effect on 1 May 2017, makes a number of technical changes and improvements to the Powers of Attorney Act 2014 (2014 Act). The amendments were accompanied by a series of new power of attorney forms, which can be found in the Powers of Attorney Amendment Regulations 2017.

The changes

The purpose behind the amendments was to resolve a slew of issues with the 2014 Act, which has been in operation since 1 September 2015. The 2014 Act was introduced to consolidate the powers of attorney rules which had formerly come under the ambit of the Instruments Act 1958 (Old Act) and Guardianship and Administration Act (1986). However, there were a number of teething issues with the 2014 Act that need to be resolved. Note that certain provisions of the Old Act may still apply to the exclusion of the 2014 Act (see discussion below).

The principal changes were as follows:

  1. Section 22(1) was amended to clarify that an attorney can be authorised to deal with only personal matters, only financial matters, or to matters specified in the power of attorney instrument;
  2. Alternative attorneys can be appointed either for a single attorney or for multiple attorneys;
  3. Under the new amendments, enduring powers of attorney (financial and guardianship) made under both the 2014 Act and the Instruments Act 1958 (Old Act) will now be revoked entirely, rather than only to the extent of any inconsistency (before the amendments, if a person made a new power of attorney, only powers of attorney under the 2014 Act would be revoked, and only to the extent of any inconsistency. Powers of attorney made under the Old Act would not be affected); and
  4. In relation to a power of attorney that specifies that attorneys are to act by majority, if it becomes no longer possible to act by majority (for instance because the number of attorneys is reduced from three attorneys to two) then the remaining attorneys are required to act jointly.

The amendments to the 2014 Act were accompanied by the new Powers of Attorney Regulations 2017, which replaced a number of the existing forms.

The amendments do not affect the validity of any powers of attorney made under the 2014 Act before the commencement of the amendments.

Application of the law to powers of attorney made under the Old Act

Similarly, enduring powers of attorney made under the now repealed Part XI of the Old Act remain valid: s 144(2) of the 2014 Act. A number of provisions contained in the 2014 Act apply to enduring powers of attorney made under the Old Act: s 144(2) of the 2014 Act. Note, however, that some of these provisions do not apply to acts that occurred before the 2014 Act came into effect (i.e. 1 September 2015).

This was confirmed in YDM (Guardianship) [2016] VCA 758 and ODY YDM (Guardianship) [2016] VCA 804. Each of these VCAT cases concerned allegations by a child of the then deceased principal that the other child, each of whom was appointed the attorney of the deceased, had taken funds from the deceased in breach of the enduring power of attorney. Section 77(1) of the 2014 Act, regarding compensation sought where attorneys have engaged in misconduct, were found not to apply because the impugned conduct was found to have occurred before the Act’s commencement.

Therefore in relation to powers of attorney made under the Old Act, it is important to be careful when identifying which legislation applies. Enduring powers of attorney made before the commencement of the 2014 Act may be subject to the 2014 Act, but only depending on when certain events occurred.

If you would like further information, don’t hesitate to contact Michael Bishop or Jonathan Slade on (03) 9614 7707.

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2018-08-24T17:00:25+00:00December 13th, 2017|Categories: Wills & Estates|Tags: , |