Advice for attorneys appointed before 1 September 2015 under an enduring power of attorney (financial)
The law sets out the role and responsibilities of people appointed under an enduring power of attorney (financial).
Anyone appointed as an attorney or alternative attorney under an enduring power of attorney (financial) signs a statement of acceptance of the role when they are appointed.
In signing the acceptance the attorney(s) has undertaken to:
- exercise the powers with reasonable diligence to protect the interests of the person who appointed them
- avoid acting where there is a conflict of interest and
- exercise the powers in accordance with the Instruments Act 1958.
The attorney’s powers
The enduring power of attorney (financial) only allows the attorney to make financial decisions. The attorney cannot make lifestyle decisions, such as where someone lives, or health and medical decisions. The attorney’s powers or authority are set out in the ‘Enduring power of attorney (financial)’ form. The form of appointment may include conditions, limitations and instructions.
The ‘Enduring power of attorney (financial)’ form will state if more than one attorney has been appointed.
Attorneys can be appointed:
- jointly — the attorneys must make decisions together) or
- jointly and severally — the attorneys can make decisions together or independently
- as an alternative attorney — the alternative attorney can only make decisions if the first attorney dies, is absent or has lost capacity.
If more than one person has been appointed as attorney, but the form does not state if they are to act jointly or severally, the attorneys must make decisions jointly.
An attorney cannot delegate their power
An attorney cannot delegate their power. If an attorney is no longer able to carry out the role only an alternate attorney already appointed is able to step in.
When the power starts
Depending on the legal document appointing the attorney, the attorney’s powers can begin either:
- immediately, when the attorney accepts the appointment
- on a specified date, or
- on a certain occasion (such as when the person who made the appointment loses capacity).
If the attorney’s powers begin immediately, the principal oversees the use of the power while they still have capacity to manage their financial affairs. Capacity is understood as ‘decision making capacity’ as defined by the Powers of Attorney Act 2014.
If, and when, the person who made the appointment loses decision making capacity for financial matters, the attorney’s responsibility is to continue to manage the financial affairs of the person who appointed them in their best interests.
‘Financial affairs’ includes dealing with legal issues that relate to the person’s financial or property affairs. If the attorney’s powers begin when the person who made the appointment loses capacity the attorney may be asked to prove that they have lost capacity. The attorney can do this by providing a medical certificate. This may not always be possible. Contact OPA’s Advice Service for assistance if this situation arises.
When an attorney for personal matters and an attorney for financial matters disagree
Where an attorney appointed under an enduring power of attorney (financial), and an enduring guardian (or attorney for personal matters appointed under the new Powers of Attorney Act 2014) disagree about a matter where each has authority to act the decision of the enduring guardian/attorney for personal matters prevails to the extent of any inconsistency (unless otherwise ordered by VCAT). This means the attorney appointed under the enduring power of attorney (financial) must implement the decision.
However, where there is a disagreement either attorney may also apply to VCAT to resolve the matter. And i0f the implementation of the decision would result in a serious depletion of the principal's financial resources, the attorney for financial matters must apply to VCAT to resolve the matter.
The attorney’s responsibilities
The attorney is entrusted to act in the best interests of the person who appointed them. When a person accepts the role of attorney, they take on serious responsibilities. If they fail to observe these responsibilities they can be removed as attorney, and there can be civil and criminal consequences.
The attorney must:
- keep accurate records of dealings and transactions made under the power
- avoid situations where there is a conflict of interest (if a conflict of interest arises the attorney should seek legal advice or apply to the Guardianship List of the Victorian Civil and Administrative Tribunal (VCAT) for advice)
- keep the property and money of the person who made the appointment separate from their own.
- not exercise powers beyond those set out in the form of appointment
- when signing a document as an attorney, make a note that they are doing so under the enduring power of attorney.
Payment and costs
The person making the appointment does not need to pay the attorney, unless they have appointed a professional person or organisation as their attorney. Any payment must be authorised in the appointment form. The attorney is entitled to be reimbursed from the finances of the person who appointed them for expenses they have paid on the person’s behalf.
An attorney can be ordered to pay compensation
If the attorney contravenes (fails to properly undertake) their duties or obligations and this results in a loss to the principal, the attorney may be ordered by VCAT or the Supreme Court to compensate the principal for the loss.
However, if VCAT or the Supreme Court considers that the attorney acted honestly and reasonably and ought fairly to be excused for the contravention they can relieve the attorney from all or part of the attorney's personal liability for the contravention. Also, if the attorney acted in compliance with any advice, direction or order of VCAT or the Supreme Court (and the attorney did not knowingly give false or misleading information to VCAT or the Supreme Court) the attorney will not be liable.