Understanding Enduring and Non-Enduring Powers of Attorney in Victoria

Eales & Mackenzie Lawyers Melbourne

Powers of attorney are important legal tools that allow one person to make decisions on behalf of another. In Victoria, there are two main types of powers of attorney: enduring and non-enduring. Each serves a different purpose and has specific legal implications, particularly concerning decision-making capacity and long-term planning.

This article provides a clear overview of the differences between enduring and non-enduring powers of attorney, their uses and why it is crucial to seek legal guidance when creating one.

What is a Power of Attorney?

A power of attorney is a legal document that gives another person—known as the attorney—the authority to make decisions on your behalf. These decisions can relate to financial, legal or personal matters. The person granting the power is called the principal.

In Victoria, powers of attorney are governed by the Powers of Attorney Act 2014 (Vic). This legislation outlines the requirements for valid powers of attorney and sets out the duties and responsibilities of the appointed attorney.

Enduring Power of Attorney

An enduring power of attorney continues to be effective even if the principal loses decision-making capacity in the future. This is a key distinction that makes enduring powers of attorney an essential part of estate planning and future-proofing one’s legal and financial affairs.

Under an enduring power of attorney, the principal can authorise their attorney to make decisions about:

  • Financial matters – such as managing bank accounts, paying bills, buying or selling property and handling investments.
  • Personal matters – including lifestyle decisions such as where the principal lives and with whom they have contact.

It is important to note that enduring powers of attorney do not extend to medical treatment decisions. For those, a separate document—an Appointment of Medical Treatment Decision Maker—must be completed under the Medical Treatment Planning and Decisions Act 2016 (Vic).

An enduring power of attorney can commence:

  • Immediately upon signing, or
  • At a specified date or upon the occurrence of a particular event, such as the loss of decision-making capacity.

This flexibility allows individuals to maintain control over their affairs while planning for a time when they may no longer be able to make decisions independently.

To create a valid enduring power of attorney in Victoria:

  • The principal must have decision-making capacity.
  • The document must be signed by the principal and witnessed by an authorised person (such as a registered medical practitioner or a lawyer).
  • The attorney must also accept the appointment in writing.

Non-Enduring Power of Attorney

A non-enduring power of attorney is typically used for short-term or specific purposes and ceases to have effect if the principal loses decision-making capacity.

Non-enduring powers of attorney are generally used for:

  • Managing affairs while the principal is temporarily overseas or hospitalised.
  • Handling a specific financial transaction (e.g. selling a property while the principal is away).

This type of power of attorney is time-limited and does not provide ongoing authority once the principal is unable to make decisions due to illness, injury or cognitive decline.

A non-enduring power of attorney ends:

  • On a specified date,
  • When the specified task is completed, or
  • If the principal loses decision-making capacity.

Because of these limitations, non-enduring powers of attorney are not suitable for long-term planning or safeguarding the principal’s interests in the event of incapacity.

Choosing the Right Type of Power of Attorney

Selecting the appropriate type of power of attorney depends on your needs and circumstances. Enduring powers of attorney are recommended for anyone who wishes to plan ahead for a time when they may not be able to make important decisions themselves. Non-enduring powers of attorney are useful for managing specific or short-term issues while retaining full control over longer-term affairs.

Legal Advice is Essential

Because powers of attorney grant significant authority and can have lasting implications, it is vital to seek legal advice when preparing one. A lawyer can:

  • Ensure the document is legally valid.
  • Help you understand the risks and responsibilities involved.
  • Advise on choosing a trustworthy attorney.
  • Assist in drafting tailored clauses that reflect your wishes and protect your interests.

This information is general in nature and not a substitute for legal advice based on your individual circumstances. If you are considering creating a power of attorney, or if you are acting as an attorney and need legal advice, speak with our senior estates lawyer Pinar Acay on (03) 8621 1000 or (03) 9331 1144.

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