Power of attorney: Appointing someone to make decisions for you

Overview of powers of attorney

What is a power of attorney?

A power of attorney is an authority that a person (the donor) gives to another person or company to act on their behalf.

There are two types of power of attorney:

  • ordinary power of attorney
  • enduring power of attorney.

Ordinary power of attorney

An ordinary power of attorney is the authority given by one person (the donor) to one or more others to act on the donor’s behalf, either in all matters or only on specific issues stated in the power of attorney (for example, to manage a bank account while the donor is overseas).

An ordinary power of attorney is valid until it expires (if it is for a fixed term) or is cancelled (revoked). In addition, an ordinary power of attorney is only valid while the donor has the mental capacity to make decisions. If the donor loses this capacity (for example, through illness or accident), the ordinary power of attorney is cancelled. This is because under an ordinary power of attorney, the attorney cannot have more power than the donor.

Enduring power of attorney

Protection of Personal and Property Rights Act 1988, s 96

Unlike an ordinary power of attorney, an enduring power of attorney can have effect if the donor is not able to make decisions for themselves, or to communicate those decisions. An enduring power of attorney (sometimes referred to as an EPA) usually comes into force only when a donor has become mentally incapable of managing their own affairs.

Giving someone an enduring power of attorney is a way of making sure that someone trusted will make decisions if the donor becomes unable to make those decisions alone – for example, if they suffer a serious head injury, disease or mental illness.

There are two types of enduring power of attorney:

  • Enduring power of attorney for personal care and welfare (see below in this section, “Enduring power of attorney covering personal care and welfare”). This kind of EPA can only come into effect when the donor loses mental capacity.
  • Enduring power of attorney for property (see below in this section, “Enduring power of attorney covering property”). In this kind of EPA, the donor can specify whether the power comes into effect immediately, or only when the donor loses mental capacity.

    Note: If someone becomes incapable of managing their own affairs, but has not completed an enduring power of attorney, the Family Court has the power to make orders for that person (see “Court orders when you can’t make decisions for yourself” in this chapter). The court will not make an order unless it is absolutely necessary, and will intervene as little as possible into a person’s affairs.

Appointing (choosing) an enduring attorney

Who should be appointed as an enduring attorney?

Protection of Personal and Property Rights Act 1988, s 95(3)

A great deal of care should be taken when choosing an attorney under an EPA. It is crucial that the attorney is trustworthy and the donor is confident that the attorney will always act in the donor’s best interests. The donor should feel sure that the attorney would make decisions reflecting the donor’s own views.

The attorney should also have the skills to manage the donor’s affairs and, if they’re dealing with property, to keep proper records and accounts.

Restrictions on who can be appointed

There are some legal restrictions on who can be appointed as an attorney under an EPA.

Attorneys for personal care and welfare

Protection of Personal and Property Rights Act 1988, s 98

  • The attorney must be at least 20 years old, must not be bankrupt, and must have mental capacity.
  • Only one person can be given an enduring power of attorney for personal care and welfare.
  • A trustee corporation can’t be an attorney for personal care and welfare.

    Note: In many cases a family member or close friend is appointed as attorney. While it is natural to choose such a person, care should be taken to ensure that the attorney will act in the donor’s best interest.

Attorneys for property

Protection of Personal and Property Rights Act 1988, ss 95, 97

  • The attorney must be at least 20 years old, must not be bankrupt, and must have mental capacity.
  • The donor can choose an individual, such as a family member, friend or business partner, or the donor can choose a trustee corporation.
  • It is possible to appoint more than one property attorney. A donor can either appoint attorneys jointly, which means they have to decide and act together, or severally, which means they can each act individually.

Should different people be appointed attorneys for personal care and welfare and for property?

Protection of Personal and Property Rights Act 1988, ss 99, 99A

The law allows the same person to be appointed as attorney for property and for personal care and welfare. However, a donor may choose to appoint different people for each of these roles. The personal skills needed to look after someone’s personal care and welfare are different from those needed to look after someone’s financial affairs, which usually require some business knowledge.

If a person has different attorneys for personal care and welfare and for property, both attorneys are required to consult each other regularly, to ensure that the donor’s interests are not harmed by any breakdown in communication between them.

What if there is a conflict between a personal care and welfare attorney and a property attorney?

Protection of Personal and Property Rights Act 1988, ss 99, 101

If a donor has more than one attorney and there is a conflict between them, the personal care and welfare attorney prevails, but either attorney can apply to the Family Court asking for directions.

The property attorney must give the personal care and welfare attorney any financial support that attorney needs to carry out their duties, unless giving that financial support is contrary to the powers the attorney has been given, or if the court has directed otherwise.

Note: The donor cannot give authority to a trustee company to be an enduring attorney for personal care and welfare. If a trustee company (for example, the Public Trust) is the attorney for property, the donor would need to appoint someone else for personal care and welfare.

Making an enduring power of attorney

Legal requirements for making a valid enduring power of attorney

Note: If an enduring power of attorney was created before 25 September 2008, not all of the following requirements apply. For appointments made before this date, the donor’s signature only has to be witnessed by an independent person and there is no requirement for the donor’s witness to complete and attach a certificate. The new requirements place more responsibility on the donor’s witness.

Protection of Personal and Property Rights Act 1988, ss 94A, 95, 112; Protection of Personal and Property Rights (Enduring Powers of Attorney Forms) Regulations 2008

An enduring power of attorney must be created using a particular form. These forms are set out in regulations under the 3PR Act and are available from lawyers, the Public Trust and other trustee companies and online at Office of Senior Citizens.

In order for an enduring power of attorney to be valid:

  • the donor and the attorney (or attorneys) must sign the EPA
  • the attorney’s signature must be witnessed by anyone other than the donor or the donor’s witness
  • the donor’s signature must be witnessed by either:
    • a lawyer, or
    • a qualified legal executive with at least one year’s experience who is employed by and under the direct supervision of a lawyer, or
    • an authorised representative of a trustee corporation
  • the witness to the donor’s signature must be independent of the attorney, except that:
    • if the attorney is a trustee corporation, a representative of that corporation can witness the donor’s signature
    • if the attorney is appointed in their capacity as a lawyer, another lawyer or legal executive from the attorney’s firm can witness the donor’s signature
  • before the donor signs the document, the donor’s witness must explain the effects and implications of the EPA to the donor, and the donor’s legal rights, which include the donor’s right to suspend or cancel the power of attorney. The witness must certify (in a certificate attached to the EPA form) that they have no reason to suspect that the donor may be mentally incapable when they are signing the document. The witness must also certify that they are independent of the attorney (unless one of the exceptions for trustee corporations or lawyers applies).

    Note: Despite the requirement for independent witnesses, if two people appoint each other as attorneys, they can use witnesses who work in the same firm as each other.

Does a donor need a lawyer to make an enduring power of attorney?

Protection of Personal and Property Rights Act 1988, s 94A

A donor is not legally required to have a lawyer: their signature to the EPA can be witnessed by either a lawyer, a qualified legal executive, or a representative from a trustee corporation.

However, there are a number of advantages to being fully and independently advised by a lawyer with experience in this area. A lawyer can advise a donor about what terms they might want to include in the EPA, can ensure that the EPA properly expresses a donor’s wishes, and can explain to a donor the legal effect and consequences of the EPA.

Optional provisions that can be included in an EPA

Protection of Personal and Property Rights Act 1988, ss 97, 99A, 99B

Certain issues must be dealt with in an EPA, such as whether a property attorney can act only if the donor becomes mentally incapable or whether they can start acting for the donor immediately, while they still have mental capacity.

An EPA can also include a number of optional provisions:

  • Consultation – An EPA can specify the names of people an attorney must consult with whenever making decisions or particular kinds of decisions.
  • People to be kept informed – An EPA can specify the names of people a donor wants their attorney to inform about decisions made under the EPA, if those people ask for this information. A donor can specify the kinds of information they want the attorney to provide.
  • Who will assess the donor‘s mental capacity – An EPA can specify the doctor or health practitioner who will assess whether the donor has lost mental capacity. Alternatively, the EPA can specify the type of practitioner who must carry out the assessment, such as a doctor specialising in the care of older people. Note that regardless of who is specified, the assessment must be carried out by a practitioner whose scope of practice includes assessing mental capacity.
  • Benefits for the attorney – An EPA can set out whether or not a property attorney, or some other person, should benefit financially. If the EPA does not specifically allow for it, the attorney is not allowed to benefit themselves or any other person, with some exceptions.
  • Successor attorneys – An EPA can specify another person who will take over as attorney if the first attorney becomes unable to act – for example, if they die or lose mental capacity.
  • Wills – An EPA can specify that a property attorney can make a will for the donor, if the Family Court has authorised the attorney to do this.

    Note: You could also consider making an “advance directive” about future medical treatment. This means instructions about the kinds of treatment you do or don’t want to receive if you lose the ability to give informed consent (for example, if you’re in a coma after a car accident). For information about advance directives (sometimes also called “living wills”), see the chapter “Health and disability”, under “The Code of Health and Disability Services Consumers’ Rights” (Right 7).

Enduring power of attorney for personal care and welfare

When does an EPA for personal care and welfare come into effect?

Protection of Personal and Property Rights Act 1988, s 98

An enduring power of attorney for personal care and welfare comes into effect only after the donor becomes mentally incapable (see below in this section, “Mental incapacity”).

An attorney must not act in respect of a significant matter relating to the donor’s personal care and welfare unless:

  • a relevant health practitioner has certified, or the court has determined, that the donor is mentally incapable, or
  • a relevant health practitioner has previously certified that the donor is mentally incapable because of a health condition that is:
    • likely to continue indefinitely, or
    • likely to continue for a specified time, and the decision about the matter is being made within the specified time.

In respect of any other matter relating to the donor’s personal care and welfare, the attorney must not act unless they believe on reasonable grounds that the donor is mentally incapable.

Note: A significant matter relating to the donor’s personal care and welfare is a matter that has, or is likely to have, a significant effect on the donor’s health, well-being, or enjoyment of life (for example, entering residential care, or undergoing a major medical procedure).

What limits are there on the power of a personal care and welfare attorney?

Protection of Personal and Property Rights Act 1988, s 98

The enduring power of attorney can be general, or can relate to only certain matters. If the donor wants it to relate only to certain areas, these must be specified in the EPA.

Even if a personal care and welfare EPA gives an attorney general authority to decide all issues, the 3PR Act sets out some types of decisions that the attorney cannot legally make for the donor.

An attorney for personal care and welfare cannot:

Protection of Personal and Property Rights Act 1988, ss 18, 98

  • make decisions about the donor entering into or dissolving a marriage or civil union
  • make decisions about the adoption of the donor’s children
  • consent to the donor receiving electro-convulsive treatment
  • consent to brain surgery or brain treatment for the purposes of changing the donor’s behaviour
  • refuse consent to standard or life-saving medical treatment for the donor
  • consent to the donor taking part in any medical experiment, other than one for the purpose of saving the donor’s life or preventing serious damage to their health.

What responsibilities does a personal care and welfare attorney have?

Protection of Personal and Property Rights Act 1988, ss 98A, 99A, 99B

  • Donor‘s welfare and best interests – The attorney must always promote and protect the donor’s welfare and best interests. At the same time, the attorney must always seek to encourage the donor to exercise their own capacity. The attorney must encourage the donor to be self-reliant (to act on their own behalf). The attorney must also assist a donor to be a part of their community as much as possible. The personal care and welfare attorney must consider the financial implications on the donor’s property of any decision they make.
  • Duty to consult – The attorney must, as far as is practicable, consult the donor and any person specified in the enduring power of attorney. If a donor has appointed different attorneys for personal care and welfare and for property, both attorneys must consult each other regularly to ensure that the donor’s interests are not harmed through any breakdown in communication between them.
  • Giving information to others – An attorney must promptly comply with any request for information relating to the exercise of the attorney’s powers if the person requesting the information is specified in the EPA as someone to be provided with such information.

Enduring power of attorney for property

What should be in an enduring power of attorney covering property?

Protection of Personal and Property Rights Act 1988, s 97

The person or trustee company appointed as a property attorney should be told by the donor: what the donor owns, where a donor’s possessions and documents are kept, and what the donor’s exact wishes are.

The donor should:

  • list their main assets: these include the donor’s house, car, bank accounts, stocks, shares or other investments, life insurance policies, furniture and jewellery. The donor should also list any money owed to them or other assets which have been lent out.
  • list their debts and other liabilities
  • advise the attorney where their important documents are kept, such as title deeds, birth or marriage certificates, share certificates and insurance policies.
  • decide what the attorney should do on their behalf. These things can be as limited or as wide as the donor chooses.
  • specify when the enduring power of attorney comes into effect: this may be immediately, or only if and when the donor loses mental capacity and becomes unable to manage their property.

    Note: If the donor specifies that the enduring power of attorney will only take effect when they become mentally incapable, the attorney must not act in relation to the donor’s property unless a relevant health practitioner has certified, or the court has determined, that the donor is mentally incapable.

What powers does a property attorney have?

Protection of Personal and Property Rights Act 1988, s 97

It is up to the donor to decide how much power the property attorney will have. The attorney can have a general power (for example, to act generally in all matters relating to the donor’s property), or a specific power (for example, over a car).

The donor can also impose specific conditions and restrictions on the power of attorney (for example, limiting a power to borrow only up to a certain limit).

What responsibilities does a property attorney have?

Protection of Personal and Property Rights Act 1988, ss 97A, 99A-99C, s 107

  • Donor’s best interests – The attorney must always promote and protect the donor’s best interests. At the same time, the attorney must always seek to encourage the donor to develop their capacity to manage their own property affairs. Acting in a donor’s best interests means the attorney must not invest money unwisely, or act in a way not authorised by the enduring power of attorney.
  • Duty to consult – The attorney must, as far as is practicable, consult the donor and any person specified in the enduring power of attorney. If a donor has appointed different attorneys for personal care and welfare and for property, both attorneys must consult each other regularly to ensure that the donor’s interests are not harmed through any breakdown in communication between them.
  • Giving information to others – An attorney must promptly comply with any request for information relating to the exercise of the attorney’s powers if the person requesting the information is specified in the EPA as someone to be provided with such information.
  • Attorney to keep records – A property attorney must keep records of each financial transaction entered into under the enduring power of attorney while the donor is mentally incapable. An attorney who fails without reasonable excuse to do this commits an offence and is liable to a fine of up to $1,000.
  • Attorney not to benefit themselves – An attorney should not benefit themselves or a person other than the donor or recover expenses from the donor’s property. Exceptions to this include:
    • if the donor has specified that the attorney can in the enduring power of attorney
    • the court authorises the attorney to do so.

    If the donor doesn’t expressly provide otherwise:

    • the attorney can make decisions about property owned jointly if the attorney and donor are in a relationship and are living together and sharing their incomes
    • the attorney can recover out-of-pocket expenses (not including lost wages or remuneration) that they reasonably incurred
    • the attorney can recover professional fees and expenses if they accepted the appointment in a professional capacity or have worked in a professional capacity to give effect to the decisions made under the enduring power of attorney.

Ways in which an attorney can be supervised

Can the Family Court intervene in an attorney’s decisions and review their performance?

Protection of Personal and Property Rights Act 1988, ss 102, 103

Yes. The Family Court has wide powers of jurisdiction, including the power to monitor an attorney’s performance, and, if necessary, to vary the terms of the enduring power of attorney.

The Family Court can be asked to decide any disputed issues about an enduring power of attorney and its effect, or about how an attorney has been carrying out their role. Among other things, a person can ask the court specifically to:

  • decide whether a donor has lost mental capacity
  • decide whether an EPA is legally valid and what its specific effect is
  • review any decision that an attorney has made
  • give directions to an attorney to do certain things
  • cancel an attorney’s appointment. This may involve deciding whether a donor was unfairly induced or pressured to sign the EPA, or whether an attorney is suitable for the role.

Who can apply to the Family Court to ask it to intervene?

Any of the following people can apply to the Family Court to review any decision made by an attorney acting while the donor is, or was, mentally incapable:

  • the donor
  • a relative of the donor: this means a spouse, civil union partner or de facto partner, parents and grandparents, children and grandchildren, brothers and sisters, aunts and uncles, nieces and nephews
  • an attorney of the donor (not being the attorney whose decision is sought to be reviewed)
  • a medical practitioner
  • a trustee corporation
  • if the donor is a patient or a resident in any place that provides hospital care, rest home care, or residential disability care within the meaning of the Health and Disability Services (Safety) Act 2001, the principal manager of that place
  • any welfare guardian who has been appointed for the donor (see “Court orders when you can’t make decisions for yourself / Welfare guardians” in this chapter)
  • an authorised person from an elder abuse and neglect prevention service (such as Age Concern)
  • a social worker
  • any other person who gets the permission of the court to apply.

Can an attorney ask for directions from the court?

Protection of Personal and Property Rights Act 1988, ss 101, 102

Yes. An attorney can apply to the Family Court for directions about how to exercise their powers. The attorney might do this if they are facing some difficulty carrying out some of the donor’s instructions.

Mental incapacity

Protection of Personal and Property Rights Act 1988, s 96

Unlike an ordinary power of attorney, an enduring power of attorney can have effect when the donor becomes mentally incapable – that is, they become unable to make decisions or communicate those decisions.

An enduring power of attorney for property can begin before or after the donor becomes incapable, according to the terms of the EPA. In contrast, an enduring power of attorney for personal care and welfare only comes into effect when the donor loses mental capacity.

Protection of Personal and Property Rights Act 1988, ss 97, 98

What does “mentally incapable” mean?

Protection of Personal and Property Rights Act 1988, s 94

The meaning of “mentally incapable” depends on whether the context is personal care and welfare or property.

  • For a personal care and welfare EPA, a donor is mentally incapable:
    • if they are unable to make a decision about their personal care and welfare, or
    • if they are unable to understand decisions about their personal care and welfare, or
    • if they are unable to foresee the consequences of decisions about their personal care and welfare, or the consequences of failing to make such decisions, or
    • if they are unable to communicate decisions about their personal care and welfare.
  • For a property EPA, a donor is mentally incapable if they are not completely competent to manage their own property affairs.

Who decides if a donor is mentally incapable?

Protection of Personal and Property Rights Act 1988, ss 97, 99D, 102

The decision about whether a donor is mentally incapable is made by a relevant health practitioner, who is qualified to assess mental capacity, or by the court.

The donor may specify in the enduring power of attorney that the health practitioner should have a specific field of practice (such as a doctor specialising in elderly care), but only if that field of practice includes assessing a person’s mental capacity.

An assessment of mental capacity will include looking at:

  • medical evidence concerning memory, comprehension, the ability to focus on issues and to exercise and express judgment and opinions
  • the statements of family, friends and health professionals who have been in a position to observe the donor.

Presumption of competence

Protection of Personal and Property Rights Act 1988, s 93B

The law assumes that someone is competent to manage their own property and to make and understand decisions about their personal care and welfare, until it is proven otherwise.

A person is not presumed to be mentally incapable simply because someone has arranged for their mental capacity to be assessed. A person must not be presumed to lack mental capacity just because they:

  • do or intend to do things that an average person the same circumstances might not do, or
  • are subject to compulsory treatment under the Mental Health (Compulsory Assessment and Treatment) Act 1992.

What happens if a donor regains their mental capacity?

Protection of Personal and Property Rights Act 1988, s 100A

A donor who has been, but is no longer, mentally incapable may suspend the attorney’s authority to act under the enduring power of attorney by giving him or her written notice. However, the suspension does not revoke (cancel) the enduring power of attorney.

The attorney whose authority is suspended may only act under the enduring power of attorney if a relevant health practitioner has certified, or the court has determined, that the donor has again become mentally incapable.

The donor also has the right to revoke the enduring power of attorney at any time while the donor is mentally capable (see below, “Can a donor change their mind about giving someone power of attorney?”).

Ending an enduring power of attorney

Can a donor change their mind about giving someone power of attorney?

Protection of Personal and Property Rights Act 1988, ss 100A, 106

Yes. An enduring power of attorney can be changed, varied or revoked (cancelled) at any time while the donor is still mentally capable. Changes to an enduring power of attorney should be done in writing, in a document that is signed and witnessed in the same way that the original power of attorney was witnessed (see in this section, “Making an enduring power of attorney / Legal requirements for making a valid enduring power of attorney”). However, it does not need to be witnessed by the same person as on the first occasion.

Different procedures apply for changing, cancelling and replacing an enduring power of attorney, and the donor should get legal advice as to which of these procedures best suits their situation.

Note: Any bank or other agency likely to be affected should be notified that the power of attorney has been revoked.

How can an enduring power of attorney cease to have effect?

Protection of Personal and Property Rights Act 1988, ss 104-106

An enduring power of attorney ceases to have effect when:

  • the donor revokes (cancels) the EPA, by written notice to the attorney, while they have mental capacity
  • the donor dies
  • the attorney gives notice of disclaimer (that is, they state in writing that they no longer want to act as attorney)
  • the attorney goes bankrupt
  • the attorney dies
  • the attorney loses mental capacity
  • one of two joint attorneys dies, goes bankrupt or loses mental capacity and the court revokes the appointment under section 105 of the Act (attorneys appointed to act jointly must always decide and act together, whereas attorneys appointed severally can decide and act separately)
  • the Family Court revokes the EPA.

When will the Family Court cancel the appointment of an attorney?

Protection of Personal and Property Rights Act 1988, s 105

The court must cancel the attorney’s appointment if it is satisfied that:

  • the donor appointed the attorney because of undue influence or fraud, or
  • the attorney is not suitable to be the donor’s attorney, taking into account their relationship with the donor.

The Family Court may, but does not have to, cancel the attorney’s appointment if it is satisfied that:

  • the attorney is not acting in the donor’s best interests, or is likely not to act in the donor’s best interests, or
  • the attorney is failing or has failed to meet their obligations to consult and to provide information to people named by the donor for this purpose.

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