A Power of Attorney is a legally binding document which gives another person(s) or trustee organisation the power to act and make decisions on your behalf on matters ranging from financial matters, personal matters or medical treatment.
In the unfortunate event that you become incapacitated due to illness or injury and cannot make those decisions on your own, having a Power of Attorney in place gives your loved ones comfort of knowing that whomever you have appointed has the authority to look after your affairs. If you do not have a Power of Attorney in place, the Victorian Civil and Administrative Tribunal (VCAT) will appoint someone to act on your behalf. This person may not necessarily be someone you would have appointed yourself. The laws, terminology and processes around making a Power of Attorney vary across the States and Territories in Australia. In Victoria, the Powers of Attorney available are:
- General Non-Enduring Power – this is usually made when a person is unavailable for a period of time, for example, while they are overseas and wants someone to make financial decisions during that limited time such as signing a Contract of Sale or dealing with their shares.
- Enduring Power of Attorney – this gives the appointed attorney the authority to act when a person no longer has the capacity to make decisions on their own behalf. The attorney can make decisions relating to financial matters and or personal matters, such as living arrangements.
- Appointment of Medical Treatment Decision Maker – this allows a person to appoint a person who will have legal authority to make medical treatment decisions on their behalf should they lose the capacity to make the decision themselves.
- Supportive Attorney – this allows a person to appoint a supportive attorney to collect or obtain information, communicate or assist a person with non-significant financial or personal decisions. It is especially helpful in promoting the rights of people with disabilities.
- Company Powers of Attorney – this allows a company to appoint a person to act on behalf of the company, for example, to sign a document. This is subject to the company’s constitution.
While a Power of Attorney is intended to benefit and protect an individual, there is potential for an attorney to misuse this power and for there to be financial abuse. Financial abuse may involve an attorney using the power given under an Enduring Power of Attorney to withdraw money from a bank account for their own benefit. Older people are more vulnerable to financial abuse because of their diminished decision making capacity and dependence on someone for care. Analysis of data from the Elder Abuse Helpline in Victoria and Queensland indicates that financial abuse is the most common form of elder abuse and is most likely to be committed by a family member.
Under the Powers of Attorney Act 2014, an attorney has certain duties and responsibilities including a duty to act honestly, diligently and in good faith and to act with reasonable skill and care.
A supportive attorney can also be charged with a criminal offence under the Powers of Attorney Act 2014 if they are found to misuse the appointment to obtain financial advantage for themselves or for another person, or to cause loss to the principal. If found guilty, the attorney can be sentenced up to 5 years imprisonment and/or fined up to $88,000.
However, if you are concerned that your attorney is misusing a Power of Attorney, you can revoke your Power of Attorney while you still have decision making capacity. Otherwise, an application can be made to VCAT (or a similar tribunal in another State or Territory) to have the appointment reviewed or revoked. In Victoria, that tribunal is VCAT.
If you have concerns about potential or actual elder abuse, call the national 1800 ELDER Helpline on 1800 353 374. This service provides information on how you can access help, support and referrals in your area.
If you have any queries in relation to Powers of Attorney or would like to discuss your options, please do not hesitate to contact Nevett Ford at melbourne@nevettford.com.au or call us on 03 9614 7111.