Page Contents
1. What is an enduring power of attorney (financial)?
2. What power does
it give?
3. What are the legal formalities?
4. What are the financial attorney’s
additional legal obligations?
5. Who can I appoint?
6. Can I change my financial attorney?
7. When does it cease?
8. What if I become mentally incapacitated
and I don’t have a financial
attorney?
9. From whom can we obtain advice?
10. From where can I obtain a form?
1. What is an enduring power of attorney (financial)?
An enduring power of attorney (financial) is a legal document that authorises another person to make financial and legal decisions on your behalf.
The person making the enduring power of attorney (financial) is called the donor, and the appointed person is called the attorney.
The enduring power of attorney (financial) can take effect immediately, on a specified day or occasion, or if and when you become mentally incapacitated.
2. What power does it give?
The powers given to your attorney can be as extensive or as restrictive as you choose. For example, they may be responsible for all your financial and legal transactions, or they may be responsible for only some, such as writing cheques and paying bills.
Your attorney is obliged to treat you with dignity and respect, and to consider your needs, wishes and rights at all times.
The enduring power of attorney (financial) can be used for temporary circumstances, such as a stay in hospital or a trip overseas. However, because it is enduring, it will also automatically take effect if and when you become permanently incapacitated.
You can specify different powers for different circumstances. For example, you may specify only restricted powers for temporary circumstances, such as a trip overseas. However, you may also want to specify more extensive powers that would take effect if and when you become permanently incapacitated.
You can specify the principles and philosophy that should underpin the way your financial affairs are managed. However, remember that the more specific and detailed your instructions, the harder the document is to prepare effectively. If your instructions are complex, consider seeking help from a lawyer.
There may be occasions when your financial attorney and your guardian (appointed under an enduring power of guardianship) need to work together. In these circumstances, your financial attorney is responsible only for carrying out the financial transactions associated with implementing your guardian’s decisions.
3. What are the legal formalities?
For an enduring power of attorney (financial) to be valid, both the donor and the attorney must
- be at least 18 years of age
- have sufficient mental capacity to fully understand the nature and meaning of the enduring power of attorney (financial) documents.
The enduring power of attorney (financial) form has three parts: one authorising the appointment of an attorney, one accepting the appointment, and one signed by two witnesses.
Neither witness can be the attorney, but one can be related to the donor. One witness must be authorised by law to witness the signing of statutory declarations (see glossary). The enduring power of attorney (financial) does not take effect until all three forms have been signed and witnessed.
4. What are the financial attorney’s additional legal obligations?
Financial attorneys are legally obliged
- to act in your best interests at all times
- to keep their property separate from yours, except when the property is jointly owned
- to keep accurate records of all dealings and transactions
- to follow any specific instructions set out in the power of attorney document
- to maintain confidentiality.
Records obtained and created by the attorney must be available for inspection by the Victorian Civil and Administration Tribunal (VCAT) when required. VCAT can make orders to protect your property if there are any concerns about misuse.
When signing documents on your behalf, the attorney must state that they are signing under the authority of an enduring power of attorney and give the date on which the power of attorney was created.
If the power of attorney operates only in specific circumstances, your attorney may need proof that the circumstances have occurred. For example, your attorney may need to provide your bank with a letter from your doctor stating that you are no longer capable of managing your affairs. However, privacy laws mean that you must have given your doctor permission to write such a letter beforehand. Clearly, this may not be possible if you are incapacitated. Therefore, be prepared for such eventualities by obtaining any authorisations that may be needed at the same time as you prepare the power of attorney.
Make it easier for your attorney to take over your financial affairs by preparing a file that includes details of your bank accounts, investments, tax file, accountant, lawyer and any other information that may be needed.
5. Who can I appoint?
You can appoint one or more people to be your attorney. If there are two or more attorneys, you can appoint them jointly or jointly and severally.
If you appoint your attorneys jointly, they must all sign any cheques and documents. Make sure this is a practical arrangement and that they live or work close to each other and can co-operate with each other on your behalf.
If you appoint your attorneys jointly and severally, any one of them can sign any cheques and documents, or they can all do so jointly.
You can appoint an alternative attorney to be a back-up person should one of your attorneys die, become incapacitated or be incompetent.
6. Can I change my financial attorney?
You can revoke (cancel) your financial attorney by completing a new enduring power of attorney (financial) form, and stating that you are revoking (cancelling) all previous powers of financial attorney. The form must be signed and witnessed in the same way as the original document. You do not need the same witnesses.
Destroy the revoked document, along with any copies, and inform the previous attorney and anyone who holds copies of the document of your decision. Ask them to return their copy, and destroy that too.
If you want to formalise the revocation, complete a revocation of enduring power of attorney form. Give your previous attorney a copy of the form. Also, give a copy of the form to any other people or organisations, such as your accountant and bank, who may have seen and be relying on the previous form.
Make sure you tell your financial attorney that their powers have been withdrawn, because their actions continue to be binding if they have not been informed of the change.
The same process and requirements apply if you want to change your financial attorney’s instructions contained in the document.
You can revoke an enduring power of attorney (financial) appointment only if you are mentally capable. If you are not mentally capable, only the Victorian Civil and Administrative Tribunal can revoke your attorney’s powers.
7. When does it cease?
An enduring power of attorney (financial) is revoked (cancelled) when
- you die
- your attorney dies, resigns, is declared bankrupt or becomes legally incapacitated and there is no alternative attorney
- you have appointed two attorneys to act jointly only and one dies, becomes bankrupt or resigns. The other attorney cannot act alone
- the specified time for which the enduring power of attorney (financial) takes effect, expires.
8. What if I become mentally incapacitated and I don’t have a financial attorney?
The Victorian Civil and Administrative Tribunal (VCAT) can appoint an appropriately qualified administrator from the Guardianship List to manage your financial affairs on your behalf only if there are good reasons to do so.
When choosing an administrator, VCAT will make a decision based on their assessment of the situation. However, your views about your preferred person will be taken into consideration if you are able to express them.
9. From whom can we obtain advice?
The Victorian Civil and Administrative Tribunal is responsible for advising guardians, attorneys and agents, and providing direction and opinion about their role and the scope and powers of their appointment.
The Office of the Public Advocate provides information and advice about all guardianship and power of attorney matters.
10. From where can I obtain a form?
You can obtain paper copies of the enduring power of attorney (financial) form and the revocation form from larger newsagencies, law stationers, lawyers and the Office of the Public Advocate. Alternatively, you can download a form using this link. www.publicadvocate.vic.gov.au
Next Section: Enduring Power of Attorney (Medical Treatment)
