Updated: Apr 8
Photo Courtesy: Isham Fernandez collected from Unsplash
There are times and situations, where we can do everything by ourselves or be somewhere that we need to be. In such situations, we need to entrust others to do important things or make decisions on our behalf. Power of attorney is a legal tool that enables us to delegate our powers to someone else to do something on our behalf. It is an important and relevant legal concept. It is associated with great power and responsibility. Therefore, the power of attorney needs to be exercised very carefully. To use this power with caution, you need to understand the concept and benefits and risks associated with it. Following are 5 things that you need to know about the power of attorney in Victoria:
1. What is a Power of Attorney?
A power of attorney is a legal document authorising a person to act on behalf of another person. The person giving the authority is called the principal and the person receiving the authority is called the appointed attorney. The appointed attorney may be able to make financial, legal and personal decisions for the principal depending upon the nature of authority given to him/her.
Power of attorney is a position of great responsibility. We need to be very careful when deciding to appoint someone as a power of attorney. The principal should discuss his/her options with the lawyer and consider with utmost caution about such an appointment.
Powers of attorney should be kept in a safe place such as a lawyer’s office or a bank. Also, the principal and their attorney should keep certified copies of your power/s of attorney.
2. Who can make a power of attorney?
The person who issues a power of attorney in favour of another person is called the principal or donor. A power of attorney must be in writing to be a valid one. To issue an enforceable power of attorney, the principal must have the following capacities:
the principal must be over 18 years of age and
have decision-making capacity. Decision-making capacity means the person can understand, remember, evaluate and weigh up relevant information and communicate his/her decisions.
The principal must understand:
the nature of the document he/she is signing;
what powers are issued to the attorney;
what are the powers the principal is retaining;
the options to cancel or change the attorney or
the terms of the appointment;
Neither the principal's attorney nor anyone else who has the legal authority to sign documents on the principal's behalf can issue a power of attorney.
The attorney is the person who is given the power to act on the principal’s behalf. The attorney must be
over 18 years of age,
agree to be the attorney, and
The attorney should be someone that the principal trusts. The principal should be confident while deciding power of attorney, that he/she will look after the principal and his/her affairs in the best possible way.
3. What are the different types of powers of attorney?
In Victoria there are three types of power of attorney:
General Non-Enduring Power of Attorney- A general non-enduring power of attorney authorises a person or persons to act on behalf of the principal for specific purposes, like buying or selling property, operate a bank account etc.
Enduring Power of Attorney (financial and/or personal)- An enduring power of attorney authorises the attorney to make financial and/or personal decisions on behalf of the principal. Financial power includes anything related to your financial or property matters. A personal power relates to the matters involving decisions regarding lifestyle or medical.
Supportive Attorney- A person who has decision-making capacity can appoint an attorney to support them in making decisions. Such a person is called a supportive power of attorney.
4. What does the power of attorney allow the attorney to do?
A Power of Attorney will allow an attorney to take actions or make decisions on behalf of the principal regarding the following matters:
Finances: an attorney can invest money, pay bills and/or taxes, rent or sell your home or collect income on behalf of the principal;
Business: an attorney can hire employees for the principal’s business, sell the business, and do any other permitted or necessary work to protect the interest of the principal;
Personal matters: an attorney can decide where the principal will live or who he/she will live with, which foods he/she should eat, or if he/she can go to school or work;
Health Care: Under the Medical Treatment Planning and Decisions Act 2016 (VIC), it is no longer possible to appoint someone as a medical agent under an enduring power of attorney (medical treatment). In its place, you can appoint a medical treatment decision-maker. You can also appoint a medical treatment support person and make an advance care directive. A medical power of attorney made under the Medical Treatment Act 1988 (Vic) and executed before 12 March 2018 will still be valid and will be treated as if it was an appointment of a medical treatment decision-maker.
5. How the power of attorney can be revoked?
While the principal is still having the capacity, a general power of attorney and the enduring power of attorney can be withdrawn by signing the appropriate Revocation of Power of Attorney Form at any time. A copy of the revocation of power of attorney form should be served on the attorney.
For an enduring power of attorney, after the principal losses his capacity, anyone, who believes that the attorney is not acting in the best interests of the principal, can apply to the Victorian Civil and Administrative Tribunal (VCAT) to revoke the power. VCAT may revoke the enduring power of attorney if it finds the appointment is no longer serving the principal’s best interests.
If you need more information about the power of attorney or need advice or help to draft a power of attorney for you, please visit us at www.lawcircuit.com.au contact us on 0418631798 or email us at firstname.lastname@example.org