Should I have a power of attorney? March 17, 2022

You may have an up-to-date Will, but have you considered who will manage your affairs if you become incapacitated?

When you’re planning for the future, making a Will is often at the top of the to-do list. But there are also other things to consider. For example, a power of attorney can be a critical tool if someone else needs to take over making personal, medical or financial decisions on your behalf. 

What is a power of attorney?

A power of attorney is a document that legally authorises another trusted person (the attorney) to act on your (the principal’s) behalf if you can’t make decisions for yourself.  Circumstances in which you may not be able to make your own decisions include:

• If you can’t understand the decisions that need to be made, for example, you suffer from dementia or Alzheimer’s Disease
• If you’re unconscious or seriously ill, for example you’re in hospital in a coma or intensive care

There are different types of powers of attorney that can be used for different reasons, including:

• Enduring powers of attorney 
• General non-enduring powers of attorney 

Depending on the type of document, your attorney or decision-maker can make financial, personal or medical treatment decisions on your behalf when you lose the capacity to make those decisions yourself.

What are enduring powers of attorney?

Under an enduring power of attorney, you can grant your attorney powers to make decisions regarding your general financial matters, personal matters or both.

Decisions regarding financial matters include:

• Managing your money and bank accounts
• Paying bills
• Selling your home
• Managing your assets

Decisions regarding personal matters include decisions about your lifestyle and where you will live.

You can include instructions or conditions on the powers granted to your attorney. You can specify they must make a certain decision in a particular situation, or you can prohibit them from doing something.

You can also specify that the enduring power of attorney comes into effect:

• Immediately; or
• When you lose capacity to make decisions; or
• Any other time

What are general non-enduring powers of attorney?

You can make a general non-enduring power of attorney to authorise an attorney to do a specific act or for a specific time. For example, you can authorise your attorney to only:

• Sell your house for a specific figure
• Operate your bank account
• Give someone control of your business affairs
• Act on your behalf while you’re overseas

A general non-enduring power of attorney expires when either: 

• The task or time is complete; or
• You withdraw the power; or 
• You lose the capacity to manage your affairs

When can I make a power of attorney?

You can make a power of attorney at any time, provided you have decision-making capacity. This means you must be able to:

• Understand information relevant to the decision;
• Retain the information to the extent required to make the decision;
• Use and weigh the information as part of the process of making the decision; and
• Communicate the decision or your views and needs about the decision

Capacity is decision-specific: you can have capacity for some decisions but not others.

Importantly, you must have capacity to understand:

1. The nature of the document you’re signing; and 
2. The powers you are granting to your attorney

If you do not understand the nature of the enduring power of attorney you are about to sign, you cannot make a valid power of attorney. In that case, your spouse or close family member must apply to the Victorian Civil and Administrative Tribunal (VCAT) to be appointed as your attorney.

Who should I choose as my attorney?

It is important that your attorney is someone you trust to make decisions for you and who understands what is important to you. You will be granting them the power to make decisions at a time when you are very vulnerable.

You can appoint anyone who is over 18 years of age and has decision-making capacity. You should appoint someone who is unlikely to die before you and they must agree to be your attorney. You can appoint more than one attorney.

If you appoint more than one attorney, you can appoint them:

• Jointly – they must make decisions together and no single attorney can make decisions;
• Jointly and severally – the attorneys can act and make decisions together or independently; or
• Severally – the attorneys can act and make decisions alone and without consulting the other attorneys.

There are also other things to consider:

• You can also grant certain powers and instructions to individual attorneys
• If you appoint more than one attorney, you should consider whether those attorneys can work together
• If you appoint only one attorney, you can also appoint an alternative attorney, in the event your chosen attorney is unwilling or unable to make the required decisions

How do I appoint someone to make medical decisions on my behalf?

You can appoint someone to be your medical treatment decision-maker, to make decisions regarding your medical treatment if you lose capacity to make those decisions yourself.

You can appoint more than one decision-maker, but only one person can make a medical treatment decision.

As with a power of attorney, you should choose someone you trust to be your medical treatment decision-maker; someone who understands your wishes and values.

You can impose limitations or conditions on your decision-maker, but this is not usually necessary. If you do wish to impose limitations or conditions, you can make an advance care directive.

What is an advance care directive?

An advance care directive expresses your preferences and values which are to be followed or considered when medical treatment decisions are made on your behalf. Any medical treatment decision-maker must take your directive into account.

You can make an instructional or values directive:

• An instructional directive is legally binding and must be followed by a health practitioner, with limited exceptions
• A values directive must be considered by a health practitioner but is not binding on them

You can also refuse treatment for a current or future medical condition through an instructional directive. 

Alternatively, you can write down your preferences and values in some other way or discuss them with your family and health care practitioners.

Unlike an appointment of medical treatment decision-maker, you can make a valid advance care directive if you are under 18 years of age, provided you understand the potential consequences of the directive.

What is a supportive attorney?

You can appoint a person to support you in making, communicating and giving effect to your decisions. You can appoint a supportive attorney to:

• Access information about you from organisations
• Communicate your decisions to organisations
• Take reasonable steps to enact your decisions

A support person cannot make decisions on your behalf, and the appointment expires when you lose capacity.

How do I revoke a power of attorney, an appointment of medical treatment decision-maker or an advance care directive?

You can revoke any of the above documents by creating a new one that expressly revokes the earlier one. You can also execute an appropriate revocation in the required format.

You can only revoke your appointment if you have decision-making capacity.

If anyone believes your attorney or medical treatment decision-maker is not acting in your best interests, they can apply to VCAT to revoke the appointment.

What happens if I don’t have a power of attorney and I don’t have capacity?

If you do not have the capacity to make a power of attorney, your spouse or a family member will need to apply to VCAT to make an appointment. VCAT will appoint your spouse, family member or possibly another person to be your attorney. Such an application can cost considerable time and money.

The final word

An enduring power of attorney is an important part of planning for your future, and it’s critical to put one in place well before you need it. It’s a reminder that we shouldn’t take for granted our ability to make decisions.  

If you’re considering making an enduring power of attorney, appointing a medical treatment decision-maker or making an advance care directive, please contact us. We can advise if such arrangements can assist in your circumstances and which powers are appropriate. We can draft a document that meets your needs and legal requirements, or review any existing document to ensure the appointments still meet your wishes.

Call us to discuss whether you should have a power of attorney. 

This article was written by Tanya Lynch & Joseph Anker.

DISCLAIMER: We accept no responsibility for any action taken after reading this article. It is intended as a guide only and is not a substitute for the expert legal advice you can receive from marshalls+dent+wilmoth and other relevant experts.