Understanding powers of attorney

To appoint an attorney, a principal must be over 18 years old and be able to understand:

• the nature of what they are signing;
• the powers granted to the attorney; and
• what powers they retain.

That is, a principal must have the capacity to appoint an attorney. The Powers of Attorney Act 2014 (Vic) (‘POA Act’) (s 4) sets out the capacity test to be applied.

It is presumed that people have decision-making capacity (s 4(2) POA Act) unless there is evidence to the contrary.

The people who cannot be attorneys are people who are:

• under 18 years old;
• insolvent;  
• care workers;
• health providers;
• accommodation for the principal.

People who have been found guilty of a dishonesty offence cannot be appointed a person’s financial attorney (but section 28(1)(c)(ii) of the POA Act has a work-around for this).

In appointing an attorney, a principal has to work out:

• whether they should appoint one or more attorneys;
• whether the attorney for financial decisions be the same attorney for personal matters;
• if more than one attorney is appointed, whether the attorneys make decisions jointly (i.e. all agree), separately (i.e. independently of each other; this is called ‘severally’ in the sense of the power can be severed or cut into pieces), jointy and severally, or by way of a majority;
• if an attorney is unable to act, whether it is necessary to appoint another person(s) to step into their shoes (i.e. an alternate attorney(s)).

If the principal thinks their attorney may have a conflict of interest with the principal, this needs to be thought through as it could prevent the attorney from acting. A conflict may occur where the principal and the attorney own property jointly (there is a work-around for this in section 65 of the POA Act).

The principal has to think through when the enduring power will begin:

• Should it begin immediately? This may make sense if the principal needs someone to help with banking.
• Should it begin only when the principal loses capacity? This may make sense regarding personal matters (e.g. determining where the principal lives).

The POA Act (s 39) has some default settings if there is nothing specified in the power.

The principal can place conditions on the attorney’s powers and can give instructions in the document of appointment.

The principal has to sign the appointment of attorney form in front of two witnesses.

The witnesses must be over 18 years old and be present at the same time. One witness must be either a medical practitioner or authorised to witness affidavits (s 35 POA Act).

The witness cannot be:

• the principal’s attorney(s);
• a relative of the principal or the attorney(s);
• a care worker for the principal;
• an accommodation provider for the principal.

The witnesses have to certify the principal is acting freely and voluntarily and appears to have decision-making capacity (s 36 POA Act).

There is provision for another person to sign for the principal if the principal is unable to do so (s 34 POA Act).

With the commencement of the Medical Treatment Planning and Decisions Act 2016 (Vic) (‘MTPD Act’) on 12 March 2018, an attorney for personal matters can no longer be appointed to have powers about ‘any matter that relates to medical treatment or medical research’.

Since 12 March 2018, individuals have been able to appoint a medical treatment decision-maker.

Attorneys appointed before 12 March 2018 continue to have the power to make medical treatment decisions as the person’s appointed medical treatment decision-maker (s 103 MTPD Act).