Enduring Powers of Attorney: Common Mistakes to Avoid

Choosing the Wrong Attorney

The most consequential decision is who to appoint. The right attorney is honest, organised, available, capable of dealing with paperwork and assertive enough to push back where necessary. The wrong attorney is often a default — the eldest child, the one who lives closest, the one who offered first.

Common mistakes include appointing a spouse who is themselves elderly or in declining health, appointing a child because not appointing them would offend, or appointing a friend without considering the long-term commitment involved. The role can extend for many years and requires steady attention to financial detail.

Failing to Appoint Substitute Attorneys

An enduring power of attorney without a substitute is a single point of failure. If your attorney dies, loses capacity themselves, or simply resigns, the document collapses. Your family may then need to apply to VCAT for the appointment of an administrator — exactly the outcome the document was meant to avoid.

Always appoint at least one substitute. Consider a second substitute where the first is themselves older or where family circumstances are unsettled.

Not Considering Conflicts of Interest

An attorney with a conflict of interest is a problem. The classic example is the attorney who is also a major beneficiary of your Will and who has the practical ability to direct the use of your assets in their own favour during your lifetime. Gifting, "loans" to the attorney that are never repaid, and informal property transfers are the most common forms.

The Act allows limited gifts and reasonable benefits but requires clear authorisation in the document for anything beyond that. If you intend your attorney to be able to make gifts on your behalf, the document should say so expressly, with limits.

Capacity Issues

You can only sign an enduring power of attorney while you have decision-making capacity for the matter. Capacity is decision-specific and time-specific. A person with early-stage dementia may still have capacity to appoint an attorney, but a person with advanced dementia almost certainly does not.

Lawyers, doctors and authorised witnesses must turn their minds to capacity when the document is signed. Where there is any doubt, a contemporaneous capacity assessment by a GP or geriatrician is sensible. A document signed by a person who lacked capacity is invalid, and validity can be challenged years later. If a loved one has lost capacity and has no power of attorney, see our companion guide on statutory wills in Victoria and the VCAT administrator process.

Financial Abuse Risks

Financial elder abuse is the largest single risk associated with enduring powers of attorney. It is rarely committed by strangers. It is typically committed by a family member who sees an opportunity, justifies it to themselves, and is not challenged early.

Warning signs include the attorney moving in with the principal soon after the document is signed, the attorney taking over banking and limiting other family members' access to information, sudden changes to property ownership or the Will, and the disappearance of liquid assets. Many of these issues can be prevented by appointing more than one attorney, building reporting obligations into the document and keeping clear records.

Family Disputes

Family disputes about enduring powers of attorney are common, especially in blended families and where there is a significant property portfolio. The disputes typically take two forms: argument about whether the principal had capacity to sign, and argument about how the attorney has been exercising their powers.

Open communication, early disclosure of the document to adult children and a willingness on the attorney's part to account for their decisions prevent most disputes. Where a dispute does emerge, VCAT has jurisdiction to investigate the conduct of an attorney and can order them to provide accounts, revoke their authority and order compensation where the principal has suffered loss.

Record Keeping

Attorneys are required to keep accurate records of dealings and transactions entered into on the principal's behalf. This is one of the most consistently neglected obligations. Records protect both the principal and the attorney — without them, a well-intentioned attorney can be left unable to defend ordinary decisions years later.

Practical steps include keeping the principal's accounts entirely separate from the attorney's own, retaining receipts and bank statements, and keeping a short running note of major decisions and the reasons for them. A simple spreadsheet is enough for most estates.

Revocation and Replacement

An enduring power of attorney can be revoked at any time while the principal has capacity. Revocation must comply with the Act and must be communicated to the attorney and to any organisations relying on the document — typically banks, the Australian Taxation Office, Centrelink and any agents who have been dealing with the attorney. Failing to give notice to those institutions is a common error and allows the former attorney to continue acting.

Replacement attorneys should be appointed by signing a new document and revoking the old one in the same sitting. See our companion article on revoking an enduring power of attorney for the full process.

Common Misconceptions

• "My spouse can act for me automatically." No. Without an enduring power of attorney, your spouse has no legal authority to deal with your sole-name accounts or to sell jointly held property without your signature.
• "The bank will sort it out." Banks cannot act on instructions from a family member without proper authority. They will direct your family to VCAT.
• "It's the same as a Will." A Will deals with your estate after death. An enduring power of attorney covers the period while you are alive and ceases on death. Most adults need both.
• "I can wait until I need it." By the time you need an enduring power of attorney, it is usually too late to sign one. Capacity must exist at the time of signing.

Practical Guidance

A well-drafted enduring power of attorney is straightforward to put in place. The work is in the thinking that comes before it: who to appoint, who to appoint as a substitute, whether to limit the powers, when the document should commence, what reporting obligations to include, and how the family will be told.

Most Victorians sign their enduring power of attorney at the same appointment as their Will. That is the right approach. The two documents work together — the Will controls what happens after death, the enduring power of attorney controls what happens during life. For more on Wills generally, see our guide on why every Victorian adult needs a Will and our overview of powers of attorney in Victoria.

Frequently Asked Questions