Powers of Attorney
A Power of Attorney is a legal document in which a person nominates and gives legal authority to another to manage financial and personal matters on their behalf.
Why is Power of Attorney required/important?
During your lifetime, you may be involved in an accident or become ill, which renders you incapable of making the best decisions for yourself.
Having a Power of Attorney:
- allows you to choose a person you trust who would make the right decisions about financial and medical decisions, on your behalf
- alleviate conflicts over who should take charge of your wellbeing if you are unable to do this yourself
- stop third parties like the Victorian Civil and Administrative Tribunal being asked to appoint an administrator or guardian with no input or consultation from you.
In fact, appointing a Power of Attorney allows you to choose who would best represent your needs.
When can Power of Attorney be used?
There are four types of Power of Attorney to consider:
1. Specific or Limited Power of Attorney
A Specific or Limited Power of Attorney allows the nominated person to act on your behalf, as described in your Power of Attorney document only.
Examples of specific or limited Power of Attorney includes:
- the sale of property for a specified price,
- the operation of a bank account for a specified period of time.
A Specific or Limited Power of Attorney remains valid until the specific task detailed in the document has been completed or until you revoke the Power of Attorney.
2. General Power of Attorney
A General Power of Attorney allows the person nominated to undertake actions on your behalf without being limited to a specific act or period of time.
This document remains valid until:
- you pass away
- lose your mental capacity to manage your own affairs or
- you revoke the Power (of Attorney).
3. Enduring Power of Attorney
An Enduring Power of Attorney is similar to General Power of Attorney, except it will remain valid even after you become mentally or physically incapable of managing your affairs.
An Enduring Power of Attorney is often put in place by couples.
In the event that a person in the relationship becomes incapacitated, the partner can continue to operate their bank account(s) and other legal and financial affairs.
It is often sensible for an elderly person, who is alone after the death of his or her spouse, to consider granting an Enduring Power of Attorney to an adult son or daughter.
4. Enduring Power of Attorney (Medical Treatment)
An Enduring Power of Attorney (Medical Treatment) gives the nominated person the authority to make decisions about your medical treatment.
Under these circumstances, ageing, physical or mental illness, or serious injury can make your decisions about your medical treatment ineffective.
This Authority only becomes effective where you cannot make your own medical treatment decisions.
Recent changes to Powers of Attorney Act in Victoria
In Victoria, the Powers of Attorney Act 2014 came into operation 1st September 2015.
This Act ensures:
- the making, revocation and the exercise of powers is completed under a Power of Attorney.
- the Attorney exercising power under a Power of Attorney must only do so for your best interests.
- the Attorney must keep proper records of each transaction undertaken on your behalf.
- proper records require retaining copies of invoices and payment receipts. According to the Act, simply relying upon bank account statements is usually not considered sufficient record-keeping.
The Powers of Attorney Act 2014 also prohibits your nominated person from undertaking certain transactions on your behalf.
This may include the following:
- Making of gifts except in certain circumstances
- Entering into a transaction where there is a conflict between your interests and your nominated person’s interests.
Compensation for Acts of Attorney
If your nominated person acts in breach of the legal duties under the Powers of Attorney Act, the Supreme Court or Victorian Civil and Administrative Tribunal may order,
- Them to compensate you, or
- Your deceased estate for any loss caused by the nominated person’s conduct.
Mackinnon Jacobs Lawyers, based in Boronia, Melbourne ensures you are protected from every angle and can assist with all aspects in relation to Powers of Attorney, including disputes and claims brought under the Powers of Attorney Act 2014.
Click here to contact us for a consultation.
Would you like to know more?Contact our property law expert Brian Irving on 1300 424 452 to receive personalised advice about your case.