Power of Attorney Law Change

Power of Attorney Law Change

The Powers of Attorney Act 2014 (“the New Act”) will commence on 1 September 2015, after which powers of attorney appointments must be made under the New Act.

A Power of Attorney is a legal document pursuant to which a person (“the Principal”), who has capacity to make decisions and take action, may appoint another person (“the attorney”) to make decisions on his or her behalf.

Powers of Attorney made under existing legislation will remain valid under the New Act.

The New Act does not affect Enduring Powers of Attorney (Medical Treatment), which will continue to be regulated under the Medical Treatment Act 1988.

The New Act also includes some amendments to General Powers of Attorney, which will now be called General Non-Enduring Powers of Attorney.

  1. The New Act consolidates Enduring Powers of Attorney (Financial) and Powers of Guardianship into one Enduring Power of Attorney. The Enduring Power of Attorney will allow Principals to arrange the management of both financial and personal matters.
  1. The New Act creates a new role of the Supportive Attorney to provide support to make or give effect to some or all of the Principal’s decisions. A supportive attorney will not make decisions on behalf of the principal.  The appointment of a supportive attorney is available to anyone who has decision-making capacity but needs support to exercise that capacity, for example a person with a disability affecting decision-making.  A principal may authorise a supportive attorney to access, collect or obtain information; to communicate, or assist the principal to communicate supported decisions; or to do anything that is reasonably necessary to give effect to supported decisions (other than decisions about significant financial transactions).
  1. The New Act increases protection for Principals against abuse of Enduring Powers of Attorney, including:
  • Decision-making capacity. The New Act introduces a new definition of decision-making capacity and provides guidance about how it should be assessed in order to protect a Principal’s right to make their own decisions if possible.
  • Guide to decision-making. Decision-makers acting for a Principal who lacks decision-making capacity must act in a way that is least restrictive of the Principal’s ability to decide, ensuring practicable and appropriate support is given to the Principal to enable them to participate in decisions affecting them as far as possible.  An enduring attorney must give effect to the Principal’s wishes, encourage the Principal to participate in decision-making, and promote the Principal’s social and personal wellbeing.
  • More stringent execution requirements. The New Act introduces more stringent requirements for the making and revoking of enduring powers of attorney.
  • Duties of enduring attorneys. The New Act clearly sets out duties of enduring attorneys, including the duty to act honestly, diligently and in good faith, and to exercise reasonable skill and care.
  • Prohibition on conflict transactions. The New Act introduces provisions prohibiting conflict of interest transactions, unless authorised or ratified by the Principal or VCAT.
  • The New Act regulates an enduring attorney’s ability to give gifts from the Principal’s property.
  • VCAT powers. The New Act provides VCAT with additional powers, including the power to order compensation for any loss caused by the enduring attorney in contravention of the Act and to provide advice to multiple attorneys on the resolution of disputes.
  • Creating new indictable offences. The New Act creates new offences for dishonestly obtaining or using an enduring power of attorney, that are punishable by up to five years’ imprisonment.

For further information regarding the new Power of Attorney law, please contact our friendly team.