Aug 17

Powers of Attorney – New legislation

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The Powers of Attorney Act 2014 (the Act) will commence on 1 September 2015. The purposes of the Act are to:

  1. clarify and consolidate Victoria’s enduring powers of attorney laws
  2. create the role of supportive attorney
  3. improve the protections against abuse of enduring powers of attorney.

Powers of Attorney made under existing legislation will remain valid under the new Act. The Act does not affect enduring powers of attorney (medical treatment), which will continue to be regulated separately under the Medical Treatment Act 1988.

The Act includes only minor amendments to general powers of attorney, which will be called general non-enduring powers of attorney.

The Act consolidates the current enduring power of attorney (financial) and power of guardianship into one enduring power of attorney. The enduring power of attorney will allow people to arrange management of financial and personal matters.

Improved protection

The Act improves protections against abuse of enduring powers of attorney, as follows:

  • Decision-making capacity: The Act introduces a new definition of decision-making capacity and provides guidance about how it should be assessed to protect a person’s right to make their own decisions where possible.  The Act makes a clear statement that a person is presumed to have decision-making capacity unless there is evidence to the contrary.
  • Principles to guide decision-making: Decision-makers acting for a person who lacks decision-making capacity must do so in a way that is least restrictive of that person’s ability to decide. They must ensure the person is given practicable and appropriate support to enable them to participate in decisions affecting them as far as possible. The Act requires an attorney to: give effect to the principal’s wishes; encourage the principal to participate in decision-making; and promote the principal’s social and personal wellbeing.
  • More stringent execution requirements: The Act introduces more stringent requirements for the making and revoking of enduring powers of attorney.
  • Duties of enduring attorneys: The Act clearly sets out duties of enduring attorneys, including to act honestly, diligently and in good faith, and to exercise reasonable skill and care.
  • Prohibition on conflict transactions: The Act introduces new provisions prohibiting conflict of interest transactions, unless authorised or ratified by the principal or VCAT.
  • Gifts: The Act regulates an enduring attorney’s ability to give gifts from the principal’s property.
  • VCAT powers: The Act provides VCAT with additional powers, including the power to order compensation for any loss caused by the enduring attorney in contravening the Act and to provide advice to multiple attorneys on resolution of disputes.
  • Creating new indictable offences: The Act creates new offences for dishonestly obtaining or using an enduring power of attorney, which are punishable by up to five years’ imprisonment.

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