The commencement of the Powers of Attorney Act 2014 (Vic) (‘POA Act’) on 1 September 2015 will see some significant changes to the current laws which regulate this area.
WHAT IS A POWER OF ATTORNEY?
A Power of Attorney is a written legal document under which a person (‘the Principal’) who has the capacity to make decisions may appoint another person (‘an Attorney’) to make decisions on their behalf.
Currently the most common types of Powers of Attorney include:
1. General Power of Attorney under the Instruments Act 1958;
2. Enduring Power of Attorney (financial) under the Instruments Act 1958;
3. Appointment of Enduring Guardian under the Guardianship and Administration Act 1986;
4. Enduring Power of Attorney (medical treatment) under the Medical Treatment Act 1988.
The biggest change which will result from the introduction of the POA Act is the consolidation of the Enduring Power of Attorney (financial) and Appointment of Enduring Guardian into one Enduring Power of Attorney. This new Enduring Power of Attorney will allow a Principal to appoint an Attorney or Attorneys for the management of their financial matters (‘Financial Attorney’) and/or personal matters (‘Personal Attorney’).
It is important to note that Powers of Attorney made under the Instruments Act 1958 and Guardianship and Administration Act 1986 will still remain valid. Further, the POA Act does not affect Enduring Powers of Attorney (medical treatment) and the General Powers of Attorney, now referred to as a Non-Enduring Power of Attorney, will undergo only minor changes.
NOTABLE CHANGES TO BE AWARE OF WHEN APPOINTING AN ATTORNEY
In order for a person to be eligible to be appointed as an Attorney they must be:
- Over 18 years of age;
- Solvent; and
- Not act as a care worker, health provider or accommodation provider for the Principal.
Further, an individual who is to be appointed as Financial Attorney must also:
- Not have been convicted or found guilty of an offence involving dishonesty; or
- If the individual has been convicted or found guilty of such an offence, they then must disclose the conviction or finding of guilt to the Principal and the disclosure of the conviction or finding of guilt must be recorded in the Enduring Power of Attorney.
Duties of Attorney
If you are appointed as an Attorney it is important to have an understanding of your duties and obligations under the POA Act. The main duties and obligations to be aware of as an Attorney include:
- acting honestly, diligently and in good faith;
- exercising reasonable skill and care;
- not using the position for profit, unless authorised by the Power of Attorney or by law;
- avoid acting where there is or may be a conflict of interest unless the Power of Attorney so authorises;
- not disclosing confidential information gained as the Attorney under the Power of Attorney unless authorised by the power or by law;
- keeping accurate records and accounts; and
- separating any property from the Principal’s property.
A Principal is entitled to appoint multiple Attorneys and may specify whether they are to be appointed:
- jointly (which is the default position if no other is specified);
- jointly and severally; or
- as majority.
As mentioned above, it is possible for a Financial Attorney to be appointed and a Personal Attorney. However, where different Attorneys are appointed severally, and a disagreement arises between the Attorneys regarding a matter where they both have an authority to act, the decision of the Personal Attorney will prevail to the extent of any inconsistency. It is important to note that there is scope for either Attorney to also apply to VCAT for orders as to how the matter should be resolved.
Further, under the POA Act the Financial Attorney must implement decisions of the Personal Attorney. Yet despite this, if the implementation of the decision of the Personal Attorney would result in a serious depletion of the Principal’s financial resources, the Financial Attorney has an obligation to apply to VCAT for an order on the matter.
As under the previous legislation, Alternative Attorneys can be appointed by the Principal. The Alternative Attorney will have authority to act as per the circumstances specified in the Power of Attorney.
Where no circumstances are specified, the Alternative Attorney will be authorised to act if the Attorney for whom they are appointed as an Alternative Attorney:
- does not have the decision making capacity for the matters to which the appointment applies;
- is otherwise not willing or able to act; or
- if the appointment of the Attorney for whom the Alternative Attorney is appointed is revoked.
The Principal may specify a time, circumstance or occasion for commencement of the Power of Attorney. This may be:
- immediately on the making of the Power of Attorney (which is the default position if no specification is made);
- upon loss of decision making capacity of the Principal; or
- upon any other time, circumstance or occasion .
The POA Act also outlines in detail, the circumstances in which a Principal may rescind an Attorney’s appointment and when an Attorney may themselves resign.
The POA Act introduces the new role of a Supportive Attorney. A Principal who has decision-making capacity but needs support to exercise that capacity should consider appointing a Supportive Attorney.
A Supportive Attorney’s primary role is to support the Principal in making and giving effect to decisions, other than a “significant financial transaction”. Thus, a Supportive Attorney will not have the power to make decisions on behalf of the Principal, but rather any decision made with the support of a Supportive Attorney will still be a decision of the Principal.
A Supportive Attorney’s powers are limited to:
- accessing, collecting and obtaining information about the Principal that is relevant to a supported decision;
- communicating information about the Principal that is relevant to a supported decision; and
- taking reasonable action to give effect to a supported decision.
If a considerable amount of time has passed since you last reviewed your Powers of Attorney or you do not have Powers of Attorney in place, the introduction of this new POA Act may be the perfect opportunity to ensure your interests are protected.
Pointon Partners can provide you with a range of information regarding Enduring Powers of Attorney, including advice on:
- which power is right for you (including the possibility of appointing a Supportive Attorney);
- why you should appoint an Attorney;
- how to appoint an Attorney; and
- how to revoke a Power of Attorney.