Enduring Powers of Attorney

Why an enduring power of attorney matters

Without an enduring power of attorney, if you lose decision-making capacity your family may have to apply to the Victorian Civil and Administrative Tribunal (VCAT) for the appointment of an administrator or guardian. That process takes time, involves ongoing supervision by VCAT and may not appoint the person you would have chosen. Preparing an enduring power of attorney in advance is a straightforward way to avoid that outcome.

Types of appointment under Victorian law

• Enduring Power of Attorney (financial matters). Your attorney can make decisions about your finances and property — for example, operating bank accounts, paying bills, dealing with investments and, if authorised, selling real estate.
• Enduring Power of Attorney (personal matters). Your attorney can make personal and lifestyle decisions — such as where you live and who you associate with — when you are unable to.
• Appointment of Medical Treatment Decision Maker. A separate appointment under the medical treatment legislation, giving the appointee authority to consent to or refuse medical treatment on your behalf.
• General non-enduring power of attorney. A time-limited appointment that ends if you lose capacity — typically used while you are overseas or otherwise unavailable.

Choosing an attorney

The attorney must be an adult who is competent and willing to act. In practice, the choice usually turns on trust, availability and judgment. It is common to appoint a spouse or a child, but the appointment must serve you, not the family. If two attorneys are appointed, they can be required to act jointly, severally or by majority; each option has practical implications.

Safeguards

• Requirements for record-keeping of transactions above a threshold.
• A statutory duty on the attorney to act honestly, in your best interests and with reasonable diligence.
• Prohibition on the attorney using their power for their own benefit unless authorised.
• VCAT supervision if abuse is alleged.

Formalities

Each appointment must be signed by the principal (you) in the presence of two adult witnesses, one of whom must be authorised — for example, a lawyer, a medical practitioner or a person authorised to witness affidavits. The attorney must sign a statement of acceptance before the appointment takes effect.

Reviewing your appointments

Review your appointments when your family or attorney's circumstances change — for example, if an appointed attorney moves overseas, becomes unwell, or if your relationship with them changes materially. You can revoke an enduring power of attorney at any time while you still have capacity, by signing a revocation and notifying the attorney.

When each type of appointment is needed

Under Victorian law there are three main appointments used in a typical plan: an enduring power of attorney for financial matters, an enduring power of attorney for personal matters, and an appointment of medical treatment decision maker. Financial matters cover the management of property, banking, tax, business interests and legal proceedings. Personal matters cover accommodation, lifestyle and non-medical care decisions. Medical treatment decisions are made by an appointed medical treatment decision maker under separate legislation. The three appointments are ordinarily prepared together so that the same trusted person or persons hold the necessary authority across each area.

Choosing an attorney

An attorney should be trustworthy, organised, geographically available where practical, and willing to act. The attorney owes fiduciary duties to the person who made the appointment — the principal — including duties to act honestly, to keep the principal's property separate from their own, to keep records, and to avoid conflicts. Appointing two or more attorneys jointly, or jointly and severally, is common where there are two children or a partner and a professional adviser and the principal wishes to build in a check. The choice of joint versus several appointment has practical consequences — joint attorneys must act unanimously, which is prudent but can be slow.

Commencement and revocation

A financial power of attorney may commence immediately or on the principal losing decision-making capacity. Immediate commencement is convenient but requires trust in the attorney; commencement on loss of capacity requires a separate assessment. The appointment can be revoked while the principal has capacity by preparing a written revocation and providing it to the attorney. Once decision-making capacity is lost, revocation is generally no longer possible without the intervention of VCAT.

Common misunderstandings

• A financial power of attorney does not authorise the attorney to make or change a will for the principal.
• A power of attorney granted in another State does not always function seamlessly in Victoria for property held in Victoria.
• An attorney is not free to use the principal's assets for their own benefit; gifts and loans to the attorney are strictly regulated.
• The medical treatment decision maker's role is separate from the financial and personal attorney's role and cannot be filled by simply extending the financial appointment.

Storage and use

Signed originals should be stored securely and copies provided to the attorney at the time of signing. Financial institutions and service providers typically require sight of the original before acting on the attorney's instructions. Registration on the Land Use Victoria register is required where the attorney will deal with real property.

Limitations of general information

This page describes the Victorian framework at a general level and is not a substitute for advice on the appointments suitable to your circumstances.