Life can be unpredictable, and there may come a time you are unable to manage your affairs alone. A Power of Attorney provides a legal solution, allowing someone you trust to make financial and/or personal decisions on your behalf.
Choosing the right person or persons to act as your attorney is an important decision. Your attorney may have significant authority over your affairs, so it is important to understand the different types of Powers of Attorney and consider which arrangement is right for you.
What is a Power of Attorney
A Power of Attorney is a legal document that allows you to appoint a trusted person to make financial and/or personal decisions on your behalf.
Putting a Power of Attorney in place means that, if circumstances arise where you cannot attend to your affairs yourself, the person you have chosen will step in and act on your behalf. This may include managing your finances, dealing with your property or arranging personal services and support.
What are the types of Power of Attorney
There are two main types of powers of attorney to consider in Victoria;
- General non-enduring Powers of Attorney
A General non-enduring Power of Attorney allows you to appoint an attorney to make financial and/or personal decisions on your behalf for a specified period or purpose. Importantly, it does not continue if you lose decision-making capacity.
This can be useful where you need someone to act on your behalf temporarily or in particular circumstances. For example:
- Extended overseas travel: If you intend to travel overseas for several months, you may wish to appoint an attorney to manage payment of your bills, banking or matters relating to your property while you are away.
- Temporary illness or hospitalisation: If you are buying or selling property but are unable to attend settlement or sign documents yourself, you may appoint an attorney to act on your behalf for that transaction.
- Business or financial matters: If you are unable to attend to a particular business or financial matter yourself, you may appoint an attorney to deal with that matter on your behalf.
A General non-enduring Power of Attorney can be tailored to specify when it begins, the decisions your attorney can make and when the appointment ends. If you wish for your attorney’s authority to continue if you lose capacity, an Enduring Power of Attorney may be more appropriate.
- General Enduring Powers of Attorney
An Enduring Power of Attorney allows you to appoint someone to make financial and/or personal decisions on your behalf, including if you lose decision-making capacity. This can be particularly important when planning for the possibility of illness or injury that may affect your ability to make decisions in the future.
Depending on the authority given to your attorney, they may be able to:
- manage your bank accounts and pay your expenses;
- deal with your property and other financial assets; and,
- make decisions about your personal services, support and living arrangements.
The key feature of an Enduring Power of Attorney is that it will continue to operate if you lose decision-making capacity. This allows you to make an important decision while you have capacity: choosing who you trust to make financial and/or personal decisions for you, should you no longer be able to make those decisions for yourself.
One aspect to note is that a Power of Attorney for financial and personal matters is also distinct in Victoria from an Appointment of Medical Treatment Decision Maker, which covers medical decisions.
Who can be an Attorney
Choosing who to appoint as your attorney is an important decision. Your attorney should be someone you trust to act honestly, responsibly and in accordance with your wishes and best interests.
You may wish to consider;
- whether the person understands your wishes and values;
- whether you trust them to manage your financial affairs responsibly;
- whether they are likely to be available to assist you; and
- whether they have the time, ability and willingness to take on the responsibility.
In Victoria, you can appoint up to four people to act as your attorneys. If you appoint multiple attorneys, you can specify how they are to exercise their authority. For example, you can require your attorneys to:
- act jointly: all attorneys must agree and act together;
- act severally: each attorney can make decisions independently;
- act jointly and severally: attorneys can act together or independently; or
- act by majority: a majority of all the attorneys must agree before a decision can be made.
It is therefore important to consider not only who you appoint, but also how you want them to exercise their authority.
Planning ahead
Making a Power of Attorney is an important part of planning for your future. A carefully considered Power of Attorney can provide greater certainty for you and your family and help ensure your affairs are managed in accordance with your wishes if your circumstances change.
If you are considering making or updating a Power of Attorney, obtaining legal advice can help ensure the arrangement is appropriate for your individual circumstances. Contact us today to discuss making or updating your Power of Attorney.
