A comprehensive guide to power of attorney in Australia

Nobody really wants to think about a time when they can't manage their own money or legal documents. But an accident, a sudden illness, or even a long trip overseas can happen to anyone. Planning for these moments isn't about being negative; it’s about being prepared. A Power of Attorney is one of the most important legal tools you can set up to make sure your wishes are followed and your affairs are handled by someone you trust if you can't do it yourself.

This guide will walk you through everything you need to know about setting up a power of attorney in Australia. We'll cover what it is, the different kinds you can get, the legal steps you need to follow, and what's expected of the person you choose.

What is a power of attorney in Australia?

A Power of Attorney (POA) is a legal document that lets you choose a person or organisation to make decisions and manage your affairs for you. The person creating the POA is called the principal, and the person you appoint to act for you is called the attorney.

It's a common mix-up, but a POA is not the same as a Will. A Will only kicks in after you die, but a Power of Attorney works while you're alive and is cancelled automatically when you pass away. Think of it as a tool for managing your life, not your estate.

A POA is also different from documents that handle your health and lifestyle choices. While a POA usually covers your finances and property, other documents like an Enduring Guardianship (in NSW) or appointing a Medical Treatment Decision Maker (in Victoria) let someone make personal and medical decisions for you if you lose the capacity to do it yourself. The two types of documents work together and are both part of a solid plan.

The main types of power of attorney in Australia

The specific laws and forms for a Power of Attorney change depending on the state or territory, but they generally fit into a few main categories. Knowing the difference is key to making sure you have the right document for what you need.

General non-enduring power of attorney in Australia

A General Power of Attorney is usually for a specific purpose or a limited time. You might set one up if you're travelling and need someone to pay your bills or sign papers while you're gone.

The main thing to know about a General POA is that it becomes invalid the moment you lose the mental capacity to make your own decisions. As noted in Victoria’s Powers of Attorney Act 2014, its authority stops automatically if the principal loses capacity. It's really just a temporary fix for when you're mentally fine but need a hand with things.

The enduring power of attorney in Australia (EPA)

This is the most common type of POA for long-term planning. The standout feature of an Enduring Power of Attorney is that it "endures," meaning it stays legally valid even if you lose the ability to make decisions for yourself.

An EPA can cover financial things (like paying bills or selling a house) and personal matters (like where you live and what support services you use). You get to decide when it starts:

• Immediately: Your attorney can start making decisions for you straight away.
• On a specific date: You can pick a future date for the power to begin.
• Upon loss of capacity: The power only kicks in once a professional assesses that you no longer have decision-making capacity.

Appointing a medical decision maker vs. a power of attorney in Australia

Separate from a financial POA, this document lets you appoint someone to make choices about your health and lifestyle. This covers where you live, what support you get, and giving consent for (or refusing) medical treatment.

The name for this document is different depending on where you live.

• In New South Wales, it's an 'Appointment of Enduring Guardian'.
• In Victoria, you 'Appoint a medical treatment decision maker'. If you don't choose someone, Victorian law has a default list of people who can make decisions for you, starting with your spouse, then your primary carer, and then an adult child.

Supportive attorneys and the power of attorney in Australia

Victoria’s 2014 law also introduced the role of a supportive attorney. This is for someone who has decision-making capacity but just needs some support to use it.

A supportive attorney doesn't make decisions for the principal. Instead, they are legally recognised to help the principal make their own decisions, maybe by gathering information or helping to communicate what they want. It's a way to help someone stay independent while getting the support they need.

How to create a power of attorney in Australia

Making a legally valid Power of Attorney is more than just signing a form. You have to follow specific legal steps, which are different in each state and territory.

Who can make a power of attorney in Australia? (the principal)

To create a valid POA, you must be:

• 18 years of age or older.
• Have decision-making capacity. Under Victorian law, this means you can understand relevant information, remember it, use it to make a decision, and then communicate that decision. If there's any question about your capacity, it's a good idea to get a letter from a doctor.

Choosing your attorney

This is one of the biggest decisions you'll make. The person you choose as your attorney needs to be trustworthy, reliable, and able to manage your affairs with your best interests at heart.

Who can be an attorney:

• They must be over 18 and have capacity themselves.
• They can't be bankrupt if they're handling financial matters.
• In Victoria, you cannot appoint your care worker, health provider, or accommodation provider as your attorney.

You can also appoint more than one attorney, and have them act in different ways:

• Jointly: All attorneys have to agree on every single decision.
• Severally: Each attorney can make decisions on their own.
• Successively: You can appoint a main attorney and a backup.

Another option is to appoint a professional, like a Public Trustee or a trustee company. Just be aware that these services charge fees, which are often based on a percentage of the estate's value and can be between 2.5% and 4.5%.

The formal process for a power of attorney in Australia

Every state and territory has official forms to use. The rules for signing and witnessing are very strict and can be quite different from place to place.

Witnessing requirements in Victoria: The rules for witnessing an Enduring Power of Attorney in Victoria are particularly specific. You have to sign the document with two adult witnesses present.

1. The first witness can be anyone over 18 who isn't being appointed as an attorney.
2. The second witness must be a qualified person, like a doctor, lawyer, or a police officer with a rank of sergeant or higher.

Victoria also allows for remote witnessing via audio-visual link, but this means one of the witnesses has to be a "special witness" like a lawyer or a Justice of the Peace.

Your attorney also has to sign the document to formally accept the role before they can start acting on your behalf.

What to do with your completed power of attorney in Australia

There isn't a single national registry for Powers of Attorney. Once it's all signed and witnessed, you should:

1. Keep the original document somewhere safe. Some services, like NSW Trustee & Guardian's WillSafe, offer secure storage for a small fee.
2. Give certified copies to your attorney(s), your bank, and your doctor.
3. If the POA gives power to deal with real estate, you have to register it with your state's land titles office.

Costs and responsibilities for a power of attorney in Australia

Before you sign on the dotted line, it's good to know about the potential costs of setting up your Power of Attorney and the serious legal duties your attorney will be taking on.

What does it cost to make a power of attorney in Australia?

The cost can be anything from free to several hundred dollars.

• Do-It-Yourself: Most state governments have free POA forms online that you can fill out yourself.
• Public Trustee Services: In some states, the Public Trustee can prepare your documents for you. For example, NSW Trustee & Guardian fees start at $231 for a Power of Attorney. They also offer an "Essentials package" with a Will, POA, and Enduring Guardian document for $693.
• Pensioner Discounts: Some services are free if you're an eligible pensioner. For instance, NSW Trustee & Guardian provides documents for free for those on a full Centrelink Age Pension.
• Legal Advice: A solicitor can make sure the document is perfectly suited to your needs. Their fees will vary.

An attorney's duties

Being an attorney is a position of huge trust. The law says they have to act honestly, with reasonable care, and always in your best interests. They must keep their own money completely separate from yours and keep detailed records of every transaction they make.

An attorney's power isn't unlimited. They cannot:

• Change your Will.
• Vote in an election for you.
• Pass their authority on to someone else (unless you've allowed it).
• Give away your money as gifts, unless you've specifically said they can.

Risks and safeguards

The biggest worry is that an attorney might misuse their power. To protect yourself, you can build in some safeguards, like appointing two attorneys who have to act together or requiring them to provide financial reports to an accountant.

If you think an attorney isn't acting properly, you can do something about it. In Victoria, you can apply to the Victorian Civil and Administrative Tribunal (VCAT), which can suspend or cancel the appointment, order them to pay back any losses, and settle disputes.

To better understand the real-world importance of these documents, especially the Enduring Power of Attorney, the following video offers valuable insights from legal experts.

Securing your future with a power of attorney

A Power of Attorney is much more than just a legal form; it's a key part of planning for your future. It makes sure that if you ever can't manage your own affairs, your decisions will be made by someone you trust, based on what you would have wanted.

By understanding the difference between a General, Enduring, and Medical Power of Attorney, along with unique options like Victoria's supportive attorney, you can pick the right documents to protect both your money and your wellbeing. The process takes some careful thought, especially when choosing your attorney, and you have to follow the legal rules, like witnessing, to the letter.

Don't wait for a crisis to force your hand. Taking the time now to create a Power of Attorney gives you control, makes things clearer for your loved ones, and offers some serious peace of mind. Your next step could be talking about your wishes with family, downloading the forms from your state government's website, or chatting with a legal professional to help you through it.

Frequently Asked Questions

What is the main difference between a general and an enduring power of attorney in Australia?

A general power of attorney is temporary and stops if you lose mental capacity. An enduring power of attorney continues to be valid even after you lose the ability to make decisions for yourself, making it suitable for long-term planning.

Who can witness a power of attorney in Australia?

Witnessing rules vary by state. In Victoria, for example, you need two adult witnesses, and one must be a "qualified person" like a doctor or lawyer. Always check the specific requirements for your state or territory.

How much does it cost to set up a power of attorney in Australia?

Costs vary. You can download forms for free from government websites. Using a service like a Public Trustee might cost a few hundred dollars, while a solicitor's fees will depend on their rates. Some pensioners may be eligible for free services.

Can I appoint more than one person in my power of attorney in Australia?

Yes, you can appoint more than one attorney. You can require them to make decisions together ("jointly") or allow them to act independently ("severally"). You can also name a substitute in case your primary choice can't act.

Does a power of attorney in Australia remain valid after I die?

No, a power of attorney automatically ends when the principal passes away. After death, the instructions in your Will take over to manage your estate.

What happens if I don't have a power of attorney in Australia and lose capacity?

If you lose capacity without a POA, a court or tribunal may need to appoint a guardian or financial manager to make decisions for you. This process can be slow, costly, and may result in someone being appointed that you wouldn't have chosen yourself.