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Attorney duties

Principles to be applied by the attorney

An attorney who is exercising their powers in acting on behalf of a principal under an enduring power of attorney must act in a way that is least restrictive of the principal’s ability to make decisions as is possible under the circumstances.

When making a decision for a principal who has lost their decision-making capacity the attorney must:

  • give effect to the principal’s wishes to the extent that it is appropriate and practical to do so
  • take reasonable steps to encourage the principal to take part in the decision-making, and
  • act in any way that promotes the social and personal wellbeing of the principal by:
    • recognising their dignity
    • considering their existing supportive relationships, religion, vales and cultural and linguistic environment, and
    • respecting the confidentiality of their information.

See s. 21—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Duties

Under an enduring power of attorney an attorney has a duty to:

  • act honestly, diligently and in good faith
  • exercise reasonable care and skill
  • not use the position for a profit unless specifically authorised in the document
  • avoid acting where there is or could be a conflict of interest (unless authorised in the document)
  • never put their interests ahead of the principal’s interests
  • not disclose confidential information gained as an attorney unless authorised by law or by the POA document
  • provide maintenance for the principal’s dependants if specified in the attorney document
  • keep accurate records and accounts as required for personal and financial matters
  • keep their own money and property separate from the principal’s, and
  • only make gifts on behalf of the principal that are permitted.

See ss. 21, 63, 68, 69—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Powers of attorney made before 1 September 2015

These duties do not apply to attorneys who were appointed under powers made before 1 September 2015.

See Part 10—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Conflict situations

An attorney acting for financial matters under an enduring power of attorney must not enter into transactions in that capacity if the transaction is one in which there is (or may be) a conflict between their duty to the principal and the interests of the attorney or a relative, associate or close friend of the attorney.

There are exemptions to this if the attorney is:

  • making a permitted gift, or
  • providing for the maintenance of a dependant of the principal.

See s. 64—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Where the attorney and principal own property together

There will be no conflict in situations where the attorney and the principal own property together and the attorney is making a decision that affects both of them in relation to that property. This allows the attorney to deal with an interest in property that is jointly owned, borrow money, or give a guarantee using that property—provided that the property was acquired together while the attorney had capacity.

See s. 64(2)—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Permitted conflict situations

The attorney may enter into a conflict situation that relates to financial matters if, before the time of the transaction, the principal had authorised the transaction, the type of transaction or conflict transactions generally.

The attorney can also complete transactions that had been entered into by the principal before they lost capacity.

VCAT can also validate a conflict transaction that the attorney had entered into that has been completed. Also, attorneys can ask VCAT to approve a transaction before they act.

See s.65—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Gifts

Unless there is a restriction in the power of attorney document, the attorney can make a gift of the principal’s property, but only if the gift is:

  • reasonable in the circumstances, particularly considering the financial circumstances of the attorney, and:
  • to a relative or close friend of the principal that is seasonal (such as for a birthday, Christmas, Mother’s Day) or for a special event (such as for a birth or a marriage), or
  • the kind of gift that the principal made when they had capacity, or
  • the kind the principal would be reasonably expected to make.

If the above circumstances are fulfilled the gift may be made even if the gift is to the attorney, a relative or close friend of the attorney or to an organisation that the attorney has a connection, such as to a political party or charity.

The attorney must keep written records of any gift made if the total value of the gift is over $100 or another amount if this is prescribed in legislation or in the power of attorney document.

See s. 67—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Maintenance of principal’s dependents

The attorney can maintain the principal’s dependents if the power of attorney document allows for this. The amount has to be reasonable taking into account all of the circumstances, particularly the financial circumstances of the principal.

‘Reasonableness’ is not required if this is clearly stated in the power of attorney document.

See s. 68—Powers of Attorney Act 2014 (Vic)(opens in a new window).

Separation of attorney and principal’s property

Attorneys dealing with financial matters must keep the principal’s property quite separate from their own property unless that property is jointly owned.

See s. 69—Powers of Attorney Act 2014 (Vic)(opens in a new window).

More information

Legislation

Powers of Attorney Act 2014 (Vic)

  • s. 21—Principles to be applied by persons acting under the Act or an enduring power of attorney
  • s. 63—duties of attorney
  • s. 64—conflict transactions
  • s. 65—permitted conflict transactions
  • s. 67—gifts
  • s. 66—keeping records
  • s. 68—maintenance of dependents
  • s. 69—separation of attorney's and principal's property
  • s. 70—remuneration of the attorney
  • Part 10—Transitional and consequential provisions

See Powers of Attorney Act 2014 (Vic)(opens in a new window).

Reference

Office of the Public Advocate

See Office of the Public Advocate (OPA)—Plan for the future(opens in a new window).

Updated