Powers of attorney made before 1 September 2015

Anyone appointed as an attorney or alternative attorney under an enduring power of attorney (financial) signs a statement of acceptance of the role when they are appointed.

In signing the acceptance the attorney(s) has undertaken to:

• exercise the powers with reasonable diligence to protect the interests of the person who appointed them
• avoid acting where there is a conflict of interest and
• exercise the powers in accordance with the Instruments Act 1958.

The attorney’s powers

The enduring power of attorney (financial) only allows the attorney to make financial decisions.  The attorney cannot make lifestyle decisions, such as where someone lives, or health and medical decisions. The attorney’s powers or authority are set out in the ‘Enduring power of  attorney (financial)’ form. The form of appointment may include conditions, limitations and instructions.

The ‘Enduring power of attorney (financial)’ form will state if more than one attorney has been appointed.

Attorneys can be appointed:

• jointly — the attorneys must make decisions together) or
• jointly and severally — the attorneys can make decisions together or independently
• as an alternative attorney — the alternative attorney can only make decisions if the first attorney dies, is absent or has lost capacity.

If more than one person has been appointed as attorney, but the form does not state if they are to act jointly or severally, the attorneys must make decisions jointly.

An attorney cannot delegate their power

An attorney cannot delegate their power.  If an attorney is no longer able to carry out the role only an alternate attorney already appointed is able to step in.

When the power starts

Depending on the legal document appointing the attorney, the attorney’s powers can begin either:

• immediately, when the attorney accepts the appointment
• on a specified date, or
• on a certain occasion (such as when the person who made the appointment loses capacity).

If the attorney’s powers begin immediately, the principal oversees the use of the power while they still have capacity to manage their financial affairs. Capacity is understood as ‘decision-making capacity’ as defined by the Powers of Attorney Act 2014.

You have decision-making capacity if you are able to:

• understand the information relevant to the decision and the effect of the decision
• retain that information to the extent necessary to make that decision
• use or weigh that information as part of the process of making the decision
• communicate the decision and the person’s views and needs as to the decision in some way, including by speech, gestures or other means.

Capacity is decision-specific. A person may have capacity for some decisions but not others.

Note:

It is the responsibility of the health practitioner to determine capacity for a specific decision.

If, and when, the person who made the appointment loses decision-making capacity for financial matters, the attorney’s responsibility is to continue to manage the financial affairs of the person who appointed them in their best interests. 

‘Financial affairs’ includes dealing with legal issues that relate to the person’s financial or property affairs.
 If the attorney’s powers begin when the person who made the appointment loses capacity the attorney may be asked to prove that they have lost capacity. The attorney can do this by providing a medical certificate.  This may not always be possible.  Contact OPA’s Advice Service for assistance if this situation arises.

When an attorney for personal matters and an attorney for financial matters disagree

Where an attorney appointed under an enduring power of attorney (financial), and an enduring guardian (or attorney for personal matters appointed under the new Powers of Attorney Act 2014) disagree about a matter where each has authority to act the decision of the enduring guardian/attorney for personal matters prevails to the extent of any inconsistency (unless otherwise ordered by VCAT).  This means the attorney appointed under the enduring power of attorney (financial) must implement the decision.

However, where there is a disagreement either attorney may also apply to VCAT to resolve the matter.  And i0f the implementation of the decision would result in a serious depletion of the principal's financial resources, the attorney for financial matters must apply to VCAT to resolve the matter.

The attorney’s responsibilities

The attorney is entrusted to act in the best interests of the person who appointed them. When a person accepts the role of attorney, they take on serious responsibilities. If they fail to observe these responsibilities they can be removed as attorney, and there can be civil and criminal consequences.

The attorney must:

• keep accurate records of dealings and transactions made under the power
• avoid situations where there is a conflict of interest (if a conflict of interest arises the attorney should seek legal advice or apply to the Guardianship List of the Victorian Civil and Administrative Tribunal (VCAT) for advice)
• keep the property and money of the person who made the appointment separate from their own.
• not exercise powers beyond those set out in the form of appointment
• when signing a document as an attorney, make a note that they are doing so under the enduring power of attorney.

Payment and costs

The person making the appointment does not need to pay the attorney, unless they have appointed a professional person or organisation as their attorney.  Any payment must be authorised in the appointment form.  The attorney is entitled to be reimbursed from the finances of the person who appointed them for expenses they have paid on the person’s behalf.

An attorney can be ordered to pay compensation

If the attorney contravenes (fails to properly undertake) their duties or obligations and this results in a loss to the principal, the attorney may be ordered by VCAT or the Supreme Court to compensate the principal for the loss.

However, if VCAT or the Supreme Court considers that the attorney acted honestly and reasonably and ought fairly to be excused for the contravention they can relieve the attorney from all or part of the attorney's personal liability for the contravention.  Also, if the attorney acted in compliance with any advice, direction or order of VCAT or the Supreme Court (and the attorney did not knowingly give false or misleading information to VCAT or the Supreme Court) the attorney will not be liable.

 Enduring guardians appointed before 1 September 2015 under an enduring power of guardianship must act in accordance with the provisions of the Guardianship and Administration Act 1986.

Powers of an enduring guardian

An enduring guardian is able to make decisions on behalf of the person who appointed them for all:

• health care and
• lifestyle matters that they are empowered by the appointment form to make.

Usually the enduring guardian has decision-making power to:

• decide where the person is to live, whether permanently or temporarily
• decide who the person is to live with
• decide whether the person should be permitted to work
• consent to any health care that is in the best interests of the person
• restrict visitors to such extent as may be necessary in the best interests of the person.

The guardian needs to check the document appointing them to be sure of exactly what their powers are. The person who appointed them may have set specific limitations on the guardian’s powers in the document. The person who appointed the guardian may have also set out in the document any wishes they want the guardian to take into account when making decisions for them. The guardian should always consider these wishes and implement them wherever possible.

An enduring guardian cannot make financial decisions.

When the power starts

The enduring guardian’s powers only begin when the person who appointed them has lost capacity. An enduring guardian may seek advice from the person’s doctor if they are unsure whether the person has lost capacity. In some instances, the doctor may think a specialist report is required.

Capacity is understood as ‘decision-making capacity’ as defined under the Powers of Attorney Act 2014.

You have decision-making capacity if you are able to:

• understand the information relevant to the decision and the effect of the decision
• retain that information to the extent necessary to make that decision
• use or weigh that information as part of the process of making the decision
• communicate the decision and the person’s views and needs as to the decision in some way, including by speech, gestures or other means.

Capacity is decision-specific. A person may have capacity for some decisions but not others.

Note:

It is the responsibility of the health practitioner to determine capacity for a specific decision.

Medical treatment decisions

If the enduring guardian is empowered to make health care decisions, the enduring guardian will be able to consent to medical or dental treatment on behalf of the person who appointed them.

Medical agent’s decisions have priority

If the person who appointed the enduring guardian also appointed a medical agent under an enduring power of attorney (medical treatment), the medical agent’s decisions about medical and dental treatment will have priority over the enduring guardian’s decisions. If VCAT has appointed a guardian or a person to make medical treatment decisions, their decisions will also have priority over the enduring guardian’s decisions.

Health care that is not medical and dental treatment

The enduring guardian is responsible for consenting to health care that is not medical and dental treatment including:

• physiotherapy
• mobility exercises
• alternative therapies.

The enduring guardian’s responsibilities

The law requires that the enduring guardian:

• act in the best interests of the person who appointed them
• take into account their wishes and give effect to these wherever possible
• encourage them to participate in the life of the community
• protect them from abuse, neglect or exploitation
• advocate for them
• adopt the means which is the least restrictive of a person's freedom of decision and action as is possible in the circumstances.

If the enduring guardian has any conflict of interest or concern, they can ask VCAT for advice.

Financial implications of decisions

There will usually be financial implications of the decisions an enduring guardian makes. Enduring guardians need to ensure that the person who appointed them can afford those decisions. If there is a financial attorney or an administrator appointed, the enduring guardian should discuss their decisions with them to see what the person can afford.

When an enduring guardian and an attorney for financial matters disagree

Where an enduring guardian and an attorney appointed under an enduring power of attorney (financial), or an attorney for personal matters appointed under the new Powers of Attorney Act 2014 disagree about a matter where each has authority to act, the decision of the enduring guardian prevails to the extent of any inconsistency (unless otherwise ordered by VCAT). 

This means the attorney must implement the decision.

However, where there is a disagreement, either may also apply to VCAT to resolve the matter.  And if the implementation of the decision would result in a serious depletion of the principal's financial resources, the attorney for financial matters must apply to VCAT to resolve the matter.

Keeping records of decisions

The enduring guardian should keep a record of any decisions they make, and the reasons why they chose to make them. It may be helpful for the enduring guardian to keep copies of correspondence, as well as a record of conversations they have with service providers. They may be useful if someone challenges a decision and claims the decision was not in the best interests of the person who appointed the enduring guardian.  

Resignation of enduring guardian

If the enduring guardians no longer wishes to accept the appointment they should communicate this to the person who appointed them; then the person can make other arrangements if they wish.  If the person who appointed them no longer has capacity to revoke (cancel) the enduring power of guardianship, then the enduring guardian should consider applying to VCAT to have the appointment revoked.

An enduring guardian can be ordered to pay compensation

If the enduring guardian contravenes (fails to properly undertake) their duties or obligations and this results in a loss to the principal, the enduring guardian may be ordered by VCAT or the Supreme Court to compensate the principal for the loss.

However, if VCAT or the Supreme Court considers that the enduring guardian acted honestly and reasonably and ought fairly to be excused for the contravention they can relieve the enduring guardian from all or part of their personal liability for the contravention.  Also, if the enduring guardian acted in compliance with any advice, direction or order of VCAT or the Supreme Court (and the enduring guardian did not knowingly give false or misleading information to VCAT or the Supreme Court) they will not be liable.

Download 'Enduring Powers of Attorney: Transitional Provisions' for assistance with determining:

• the validity of a particular appointment by referencing the law in effect at the time the appointment was made; and
• the law which currently applies to enduring appointments made prior to the commencement of the Powers of Attorney Act 2014.