Insights and Publications
  • mdp
  • What You Need to Know about the Recent Changes to the Powers of Attorney Rules

What You Need to Know about the Recent Changes to the Powers of Attorney Rules

Sara-Jane Mok | May 19th, 2017

On 1st May 2017, new changes to enduring powers of attorney (financial and guardianship) came into effect under the Powers of Attorney Amendment Act 2016 (Vic).

There are more changes in the pipeline for medical powers of attorney in 2018 when the Medical Treatment Planning and Decisions Act 2016 will commence.

What is an enduring power of attorney?

Everybody knows they should make a will so that their family knows what their wishes are once they pass on. However, not many people make an enduring power of attorney part of their estate planning process.

A power of attorney is a legal document that allows you to appoint a person to manage your affairs and make decisions on your behalf when you are unable to do so, such as falling ill or being overseas.

An ordinary power of attorney normally operates for a specific purpose or for a fixed period. For example, if you are going overseas for a month and wish to appoint a family member to manage your conveyance whilst you are away. An enduring power of attorney, on the other hand, continues to operate indefinitely until it is revoked, or until the person making the enduring power of attorney loses full legal capacity.

Here are the three types of enduring powers of attorney:

1. Guardianship

An enduring guardianship allows a person to appoint another person to make lifestyle decisions on their behalf if they lose capacity. This can include deciding where the person lives, their health care plan, what the visiting hours are, and more.

2. Financial

An enduring power of attorney (financial) allows a person to appoint another person to make financial, legal or property decisions on that person’s behalf. The enduring power of attorney (financial) can operate even if a person has capacity (and can be a useful document if you go overseas regularly and need someone to sign documents on your behalf).

3. Medical

An enduring medical power of attorney allows an individual to appoint another person (the ‘medical agent’) to make decisions about medical treatment on their behalf.

The enduring powers of guardianship and enduring powers of attorney (financial) were combined as one document under the banner of “enduring power of attorney” in 2015.

What You Need to Know about the Recent Changes to the Powers of Attorney Rules

What were the key changes to the enduring power of attorney that came to effect on 1 May 2017?

#1: Any earlier enduring power of attorney is automatically cancelled, unless specified otherwise.

Any earlier enduring power of attorney (financial or guardianship) is automatically cancelled by a new enduring power of attorney, unless the document specifies otherwise.

#2: You can appoint more than one alternative attorney as a back-up for any primary attorney that you appoint.

Before the changes took place, you could choose up to two people to be your joint attorneys and only nominate one alternative attorney. It was also possible to specify one person to be your guardianship attorney and another to be your financial attorney.

Now, you can appoint more than one alternative attorney. For example, a person is able to appoint their spouse as their primary attorney and their two adult children as back-ups.

How about the changes to the enduring medical power of attorney in 2018?

Currently, you can appoint one enduring medical power of attorney to make medical treatment decisions on your behalf and one alternative agent as back-up.

The key changes from 12 March 2018 will include:

#1: The ability to appoint more than one person to make medical treatment decisions on your behalf.

#2: The introduction of a legally binding Advanced Care Directive (Directive) for instructional and value based directives, such as treatments to consent to and refuse treatment, and preferences and values for future medical treatment.

#3: The Enduing Medical Power of Attorney must be witnessed by two persons, including one who is either a registered medical practitioner or a person authorised to take affidavits. Currently, one of the witnesses must be authorised to witness statutory declarations.

#4: Requiring the person you appoint as your medical agent to formally accept their appointment by confirming the obligations and the importance of the role. Currently, this is not a requirement for enduring medical powers of attorney.

#5: The introduction of a new support attorney whose role will be to assist with representing and communicating a person’s medical treatment decisions and to represent their decisions. However, the support person cannot make medical treatment decisions.

#6: The introduction of new protection mechanisms which make it a criminal offence for a person to “impersonate” an appointed medical treatment decision-maker or “induce” their appointment as a medical treatment decision maker.

Existing Enduring Powers of Attorney (Medical Treatment) that were signed before 12 March 2018 will remain valid despite the change, and updating to the 12 March 2018 changes is optional.

What should you do?

If you do not have a will or enduring power of attorney documents in place, you should have them prepared as soon as possible.

If you have an existing will and enduring power of attorney documents in place, now is a good time to revisit those documents in light of the recent changes to see if the documents still reflect your current wishes.

Remember that it is important to regularly review and update your will and enduring power of attorney documents. This is especially vital when important life events change your situation, such as getting married or having a child.

Need help with preparing or updating your estate planning documents? Get in touch with us.

Sara-Jane Mok

Sara-Jane's experience encompasses a range of services such as property, commercial and intellectual property. Prior to joining mdp, Sara-Jane worked in Research & Development Tax at one of the ‘Big Four’ professional services firms assisting companies with preparing their Research & Development Tax Incentive claims.