Powers of Attorney
Updated at 2021-12-28 03:30:50
As public accountant in Australia, sometimes we need to support some overseas clients to deal their financial issues in Australia, therefore, we usually need the powers of attorney to give us authorities to act on behalf of our clients. Therefore, we write this article to share the different powers of attorney in Australia, which is not legal advices and information is based on Law Institute Victoria guideline.
What is a power of attorney?
A power of attorney is a legal document appointing a person (the attorney) to act on another person’s (the principal’s) behalf. The authorised attorney(s) may be able to make financial, legal, and personal decisions for the principal.
As this is a role of substantial responsibility, options should be discussed by the principal with his or her lawyer and meticulous thought should be given to whom is appointed.
The principal and their attorney(s) should keep certified copies of the power(s) of attorney.
Types of powers of attorney
In Victoria, there are three main types of powers of attorney:
- General non-enduring power of attorney
- Enduring power of attorney (financial and/or personal)
- Supportive attorney
The principal must be over 18 years of age and have decision-making capacity, and must acknowledge:
- The nature of the document they are signing
- What powers are being granted to the attorney
- What powers the principal is retaining
- The options to cancel or change their attorney or terms of the appointment
- Agree to be the attorney
- Have capacity
Documents signed by the attorney on the principal’s behalf should include a note stating they sign in their capacity as his or her attorney.
General non-enduring power of attorney
A general non-enduring power of attorney licenses a person or persons to act on the principal’s behalf for specific purposes. By specifying in the appointment what the authorisations are, the principal can determine the scope and terms of the power.
The general power comes to an end once the attorney has finalised the task or tasks specified or when the principal withdraws it, which can be advised on how it can be withdrawn by his or her lawyer. It also ends immediately when the principal dies, becomes bankrupt, or permanently loses capacity to carry out his or her affairs.
Enduring power of attorney
An enduring power of attorney permits the attorney to make financial and/or personal decision on the principal’s behalf. A financial power includes anything related to financial or property matters. Personal matters relate to personal affairs, such as lifestyle. This power differs from a general power of attorney in that the authority to act on the principal’s behalf does not end if he or she becomes physically or mentally incapable of managing their own affairs.
Many elderly people grant enduring powers of attorney in case of future situations where a medical condition later hinders their ability to manage their own affairs.
An enduring power of attorney must be in the approved written form and comply with the requirements outlined in the Powers of Attorney Act 2014 (Vic).
The principal of an enduring power of attorney must have decision-making capacity at the time the power is made and signed and must be able to acknowledge:
- The powers the principal gives to the attorney, including any limitations or conditions the principal has put on these powers
- When the attorney can exercise these powers
- That while the principal has capacity, the principal can revoke or vary the power of attorney
- That the power will still operate if the principal loses ability to make decisions
- That once the principal has lost capacity, it is unlikely they will be able to oversee their attorney’s work and decision-making
The principal can authorise different people to make financial and personal decision. He or she can provide instructions or place conditions on the attorney’s powers. He or she can also appoint more than one attorney to make decisions on their behalf and can have a back-up (called an “alternative”) attorney in case the appointed attorney(s) cannot or will not act on their behalf.
A person appointed as a financial attorney must not be insolvent and must disclose to the principal any convictions of any offence involving dishonesty.
Under the Medical Treatment Planning and Decision Act 2016 (Vic), it is no longer possible to authorise someone as a medical agent under an enduring power of attorney. Instead, the principal can appoint a medical treatment decision maker or a medical treatment support person and make an advance care directive. However, it is no longer possible to make a refusal of treatment certificate. Instead, the principal can refuse treatment for a current or future medical condition through an instructional directive in his or her advice care plan.
Supportive power of attorney
A person who has decision-making capacity can authorise an attorney to support them in making decisions. This power of attorney can be limited to facilitating financial or personal matters or both, or for a specific purpose. It is different to the general non-enduring power as a supportive power of attorney cannot make decisions on the principal’s behalf. Once the decision-making capacity is lost, the power automatically ceases.
The principal determines the types of help the attorney can provide and include one or a combination of:
- Communication powers
- Information-gathering powers
- Power to give effect to decisions
- Assists the principal in real estate transactions, or
- Assist the principal to enter into a financial transaction over $10,000.
A person appointed as a supportive attorney to assist with financial decisions must not be insolvent and must disclose to the principal any convictions of any offence involving dishonesty.
Revoking a power of attorney
Powers of attorney and enduring powers of attorney can be withdrawn by signing the appropriate revocation of power of attorney form when the principal still has capacity to do so.
The principal should give the attorney a copy of the revocation of power of attorney form.
Any principal who believes the attorney is not acting in his or her interests for any enduring power of attorney, can apply to the Victorian Civil and Administrative Tribuna (VCAT) to revoke the power. The enduring power of attorney may be revoked if VCAT finds that the appointment is no longer serving the principal’s best interests.
Chang Accounting Advisory Pty Ltd, we are CPA practice and tax agent. If you or your families or friends need our services, please feel free to contact our team for any assistance.
This article is for informational purposes only and does not form part of our advice. This article is based on Law Institute Victoria guideline. Please contact our team if you need any assistance.
Claire Chang, 0497 131 419, claire.chang@changadvisory.com.au, wechat: clairechang26
Michelle Cui, 0433 539 870, michelle.cui@changadvisory.com.au, wechat: michellejc
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