Powers of Attorney in Victoria: What You Need to Know

What is a Power of Attorney?

A power of attorney is a legal document by which one person (the principal) appoints another person (the attorney) to make decisions or take action on their behalf. The word "attorney" here has nothing to do with lawyers — it simply means an agent authorised to act for someone else.

In Victoria there are three principal documents to understand:

• General (non-enduring) power of attorney — a short-term financial appointment that ceases the moment the principal loses capacity. Useful, for example, while you are travelling overseas.
• Enduring power of attorney — a long-term appointment for financial and/or personal matters that continues to operate after the principal loses capacity. This is the document most people mean when they speak of "having a power of attorney in place".
• Appointment of medical treatment decision maker — a separate document under the medical treatment legislation that authorises someone to make medical treatment decisions for the principal when they are unable to do so themselves.

These documents work together. A complete estate planning file in Victoria almost always includes a Will, an enduring power of attorney and an appointment of medical treatment decision maker — frequently with an advance care directive as well.

Enduring Power of Attorney

The enduring power of attorney is the workhorse of Victorian incapacity planning. A single document covers two distinct categories of decision:

• Financial matters — banking, paying bills, dealing with property, running a small business, operating investments, lodging tax returns and the like.
• Personal matters — decisions about where the principal lives, who they live with, what services they receive and matters of daily life. Note that medical treatment decisions are dealt with separately, under a different Act.

The principal can appoint the same attorney for both categories or different attorneys for each. They can also appoint multiple attorneys jointly (all decisions together), severally (any one of them) or by majority, and can name an alternative to step in if the primary attorney becomes unable or unwilling to act.

An enduring power of attorney can take effect immediately on signing, on a stated future date, or only when the principal loses decision-making capacity. For most clients, immediate effect is the more practical option — it allows the attorney to assist at any time and removes the need for any later medical certification before the power can be used.

The document must be signed by the principal in the presence of two adult witnesses, one of whom must be either a registered medical practitioner or a person authorised to witness affidavits in Victoria. The attorney must then sign a separate statement of acceptance before exercising any power.

Medical Treatment Decision Maker

Since the commencement of the Medical Treatment Planning and Decisions Act 2016 in March 2018, Victorians no longer use the old "enduring power of attorney (medical treatment)". The equivalent document is now an Appointment of Medical Treatment Decision Maker.

The appointed person has authority to consent to, refuse or withdraw consent for medical treatment on the principal's behalf if the principal does not have decision-making capacity for the relevant decision. They must make the decision the principal would have made if they had capacity, based on the principal's known preferences, values and any advance care directive.

Only one person may be appointed as the medical treatment decision maker at a time, although an alternative may be named. The choice deserves real thought — it is the person who, in the worst case, will speak for you about starting or stopping treatment at the end of life.

A separate document, an advance care directive, can record specific instructions or values about future treatment. Where an instructional directive is in place, the medical treatment decision maker must follow it.

What Happens Without One?

If a Victorian adult loses capacity without an enduring power of attorney or a medical treatment decision maker in place, no relative — not even a spouse — automatically has the legal authority to manage their finances or to make all of their medical decisions. The result is usually one of two things:

• For medical decisions, the legislation provides a hierarchy of default decision makers (spouse, primary carer, adult child, and so on). This often works, but creates difficulty in blended families, where relationships are estranged, or where there is disagreement.
• For financial and personal matters, the family must apply to the Victorian Civil and Administrative Tribunal (VCAT) for the appointment of an administrator and/or guardian. Hearings take time, cost money, are public and may not result in the appointment the family expected. In contested matters, VCAT can appoint State Trustees as an independent administrator instead of a family member.

A signed enduring power of attorney avoids all of this. It is a one-page solution to a problem that, without it, quickly becomes a months-long process at the worst possible time.

Choosing the Right Attorney

The choice of attorney is the most important decision in this whole exercise. The right attorney is not necessarily the eldest child, the closest friend or the most successful family member. They are the person who is:

• Trustworthy — both honest and discreet, and willing to put your interests ahead of their own.
• Available — reachable, geographically practical, and not so over-committed that your affairs become an afterthought.
• Competent — comfortable with bank paperwork, capable of dealing with professionals, and organised enough to keep proper records.
• Stable — financially solvent, not under significant personal pressure, and not exposed to bankruptcy or insolvency risk.
• Willing — genuinely prepared to act, having had a frank conversation about what the role involves.

For couples, the obvious first choice is often each other — but it is essential to name at least one alternative or successor, particularly where the spouses are of similar age. For sole appointments, joint appointments of two adult children, or an independent professional, can each be appropriate depending on the family. There is no single right answer; there is only the right answer for the particular family.

Responsibilities of an Attorney

An attorney under a Victorian enduring power of attorney must:

• Act honestly, with reasonable diligence and in the principal's best interests;
• Act in accordance with any conditions or limitations in the appointment;
• Give all practicable and appropriate effect to the principal's wishes;
• Avoid conflicts of interest, unless expressly authorised in the document;
• Keep the principal's property and money separate from their own;
• Keep accurate records and accounts of all transactions entered into as attorney;
• Not enter into transactions that benefit the attorney personally, except as authorised; and
• Consult with any other attorneys appointed under the instrument before making significant decisions.

An attorney who breaches these duties can be ordered by VCAT to compensate the principal (or the principal's estate) for any loss. In serious cases of misuse, the conduct can amount to a criminal offence.

Safeguards Against Abuse

Financial abuse of older Victorians by trusted family members is, unfortunately, one of the most common problems in this area. The 2014 Act introduced specific safeguards designed to reduce that risk:

• Witnessing requirements: at least one witness must be a medical practitioner or a person authorised to witness affidavits, and one must certify that the principal appeared to have decision-making capacity and freely signed.
• Separate acceptance: attorneys must sign a written acceptance acknowledging their duties before they can act.
• Supervision: the principal can appoint a separate "supportive attorney" or, in some cases, name a second person whose role is to monitor the attorney's conduct.
• VCAT oversight: any interested person — including a friend, a doctor, a bank manager or Senior's Rights Victoria — can apply to VCAT for orders examining the attorney's conduct, requiring accounts, or removing the attorney.
• Conditions in the document: the principal can include conditions or instructions in the appointment itself — for example, that the family home must not be sold without the agreement of all adult children, or that the attorney must provide annual accounts to a named family member.

Thoughtful drafting at the outset is the single most effective safeguard. Most cases of abuse we see arise from documents prepared without legal advice, where no checks at all were built in.

Revoking a Power of Attorney

A principal with decision-making capacity can revoke an enduring power of attorney at any time. Revocation is a formal process — saying the words is not enough. The steps are:

1. Sign a written notice of revocation in the prescribed form, witnessed in the same way as the original appointment;
2. Give the notice to the attorney and to any other person or institution that has been relying on the appointment (banks, share registries, accountants, aged-care providers);
3. Retrieve and destroy, where possible, any original or certified copies still in circulation;
4. Sign a new appointment, if one is needed in substitution.

An appointment is also revoked automatically by the principal's death, by the principal's marriage (unless the appointee is the new spouse), and by certain orders of VCAT or the Supreme Court. An attorney can resign by written notice while the principal still has capacity; after loss of capacity, resignation requires VCAT approval.

Common Mistakes

The most frequent problems we see with Victorian powers of attorney are also the most avoidable:

• Leaving it too late. A power of attorney can only be signed while the principal has decision-making capacity. The early symptoms of dementia and the aftermath of a stroke are common triggers for the conversation — and frequently come just on the wrong side of the line.
• Using a generic form found online. Forms downloaded from non-Victorian or international websites will not comply with the 2014 Act and may be refused by banks and registries.
• Appointing too many attorneys jointly. Requiring three or four siblings to agree on every decision sounds fair, but in practice paralyses the administration when one is unreachable or disagrees.
• No alternative or successor. Appointing only a spouse of similar age, with no successor, leaves a gap when the spouse predeceases or also loses capacity.
• Failing to discuss the appointment. The first time many attorneys learn of their appointment is at the hospital bedside. Have the conversation early.
• Forgetting the medical appointment. Many people sign an enduring power of attorney for financial matters and never sign an appointment of medical treatment decision maker. They are different documents under different Acts and both are needed.
• Not reviewing the document. An appointment that made sense at age 55 may not make sense at 75. Powers of attorney should be reviewed whenever the Will is reviewed — typically every three to five years and after any major life event.

Frequently Asked Questions