Power of Attorney - What It Is, Why You Need It and How to Set It Up

Life is full of surprises. One day you’re in full control of your finances, health and personal decisions and the next, an illness or accident could leave you unable to manage them yourself. That’s where a Power of Attorney (POA) becomes important, it’s a legal document that ensures your wishes are respected and your affairs are handled by someone you trust in the event that you no longer can.

At Brendan Rothschild Legal Group, we specialise in guiding Victorians through the process of setting up legally sound, practical and protective POAs.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document that allows you to appoint someone you trust, called your ‘attorney’ to make decisions and act on your behalf. In Victoria, this can cover financial matters, legal decisions, or personal and lifestyle choices depending on the type of POA you set up.

It’s important to remember that your attorney doesn’t become the owner of your assets. Instead, they act as your legal representative and are required to act in your best interests.

In Victoria, the law recognises different forms depending on the decisions that need to be made and understanding the difference ensures you choose the right one for your situation.

Financial Power of Attorney

This type authorises your attorney to make financial and property decisions on your behalf. It can cover things like paying bills, managing bank accounts, selling property or overseeing investments.

Personal Power of Attorney

A Personal POA gives your attorney the authority to make decisions about your personal matters, such as where you live, who you live with and what services you might need. It does not extend to financial or medical treatment decisions but focuses on lifestyle and wellbeing.

Medical Treatment Decision Maker (Medical POA)

In Victoria, medical decisions are covered separately under the Medical Treatment Planning and Decisions Act 2016. By appointing a Medical Treatment Decision Maker, you give someone the authority to make medical decisions (such as consent for treatment, refusal of treatment or decisions about end-of-life care) on your behalf if you are unable to do so yourself.

Why Having a POA is Important

A Power of Attorney can benefit anyone. Life can take unexpected turns and if you suddenly become unwell, incapacitated or unable to make decisions for yourself, having a trusted person legally authorised to act on your behalf can make all the difference. For example, if you’re travelling overseas and need someone to manage your financial matters back home, a POA ensures that bills are paid and responsibilities are met without disruption. It’s also invaluable for families dealing with elder care, where important decisions about health and lifestyle may need to be made swiftly.

Without a POA, your loved ones may need to apply to VCAT (Victorian Civil and Administrative Tribunal) to be appointed as your decision-maker, a time-consuming and stressful process.

Imagine a scenario where an elderly parent is diagnosed with a progressive illness that affects their ability to make decisions about their healthcare and finances. In such challenging times, having a POA in place can bring immense relief and clarity. For instance, consider Sarah, who lives several states away from her mother, June. When June's health begins to decline, Sarah is understandably overwhelmed with worry and uncertainty about how to best support her mother.

With a POA established, Sarah can step in as her mother's agent to manage medical decisions and financial matters on her behalf. This legal document empowers Sarah to communicate with healthcare providers about treatment options that align with June’s wishes and values, ensuring she receives care that respects her preferences. Additionally, it allows Sarah to access bank accounts or pay bills without added stress.

Setting up a POA in Victoria requires meeting a few important conditions:

You must be over 18 and have the mental capacity to understand what you are signing.

Your attorney must also be over 18, trustworthy and capable of making responsible decisions. They cannot be insolvent under administration or a paid carer.

The POA form must be signed by you and witnessed by two people, one of whom must be authorised (such as a lawyer, doctor or justice of the peace).

Unlike some other legal documents, POAs in Victoria generally don’t need to be registered, unless they involve property dealings that require lodging with the Titles Office.

While a POA offers strong protections, mistakes can limit its effectiveness:

Choosing the wrong person. Appointing someone with conflicts of interest, or who doesn’t fully understand your wishes, can lead to misuse.

Failing to plan ahead. Waiting until you’ve lost capacity means it’s too late to set up a POA.

Not seeking advice. DIY POA kits exist, but without proper legal guidance, they may leave gaps that cause problems later.

How to Set Up a POA in Victoria

Decide what type of POA you need - Financial, personal, or medical.

Choose your attorney - Pick someone responsible, trustworthy and ideally with good organisational skills.

Complete the correct forms - BRLG can prepare these to ensure accuracy.

Sign and witness - The document must be signed correctly and in the presence of authorised witnesses.

How BRLG Can Help

At Brendan Rothschild Legal Group, we make the process of setting up a Power of Attorney clear and stress-free. If you’re planning ahead for retirement, preparing for travel, or looking after an ageing loved one, we’ll guide you every step of the way.

Contact us today for a free consultation or a review of your current estate planning documents. Protect your future and give your family peace of mind with the right Power of Attorney in place. Call 03 9005 8284 or book your free consultation online now.