The loss of a person’s capacity is not necessarily the end in relation to the decision on who manages their affairs. In many cases, a person will make an enduring power of attorney (which used to be called an enduring power of attorney (financial) and an appointment of an enduring guardian). However, the decision over who may manage that person’s affairs can be varied once the person has lost their capacity: an application can be made to the Victorian Civil and Administrative Tribunal for a guardianship or administration order.
The Victorian Civil and Administrative Tribunal’s guardianship board has the power to:
- Appoint an administrator;
- Appoint a guardian;
- Revoke or alter an enduring power of attorney
- Order accounts be filed by the attorney with the tribunal; and
- Approve decisions that are to be made about a person’s power of attorney.
The law relating to each application is slightly different. However, all applications have one thing in common, the application must be in line with whatever is in the person’s best interests.
Ideally, the order made by the tribunal will not vary the enduring power of attorney. The tribunal aims to act in line with what the protected person’s wishes are, so far as they can be ascertained.
The tribunal also strives to act in a way that is least restrictive to the person. However, the tribunal must act in accordance with what is in the protected person’s best interests.
In many cases, the enduring power of attorney is revoked and replaced by a new guardian or administrator. This is not a decision the tribunal will take lightly. However, there are many cases where it is inappropriate for an attorney to remain appointed.
Cases where the attorney is in a conflict of interest or cases where the family is in disagreement can result in an independent guardian or administrator being appointed.
At the extreme, cases where the attorney has not separated their own funds from the protected person’s funds result in further investigations taking place. It is now possible that the mixing of funds can result in charges being laid under the Powers of Attorney Act 2014. In many cases, the order will simply be to appoint an independent administrator or guardian.
An independent administrator is a person outside of the immediate family. They can be a trustee company, independent professional or acquaintance of the family. In cases where a trustee company or independent professional is appointed, the charge for payment of the administrator will be paid from the protected person’s estate. However, for attorneys appointed under enduring power of attorney and for family acquaintances, there is usually no remuneration. Remuneration is usually not ordered because it is not in the protected person’s best interests.
An independent guardian is usually a person outside of the immediate family. They may be an acquaintance of the family or the office of the public advocate. In most cases a guardian is unpaid.
The tribunal may also order that accounts be filed with the tribunal of the protected person’s affairs. This can be done as a condition to encourage transparency or to seek further information to ascertain whether the person should be removed as attorney. In addition, all administrators must file accounts with the tribunal in the prescribed form. In many circumstances, the tribunal will require that accounts be filed for the protected person’s estate.
The tribunal can also make an administration or guardianship order if there is no conflict. Sometimes a person may not leave an attorney or the attorney can no longer act. The tribunal is able to appoint a person to act in cases where there is no enduring power of attorney.
The tribunal can also appoint an attorney or guardian where the current enduring power of attorney is no longer practical. This can either be an administrator or a guardian. However, attorneys in these circumstances need not be an independent person.
The tribunal may also approve the decisions of an attorney. The tribunal’s approval should be sought for any transaction that is not purely in the interests of the protected person, such as gifts, business transactions, loans to the protected person or reimbursement of expenses (such as legal fees). In addition, an application may be made to the tribunal if a transaction, such as the sale of land, is not permitted in the enduring power of attorney. In those cases, it is often prudent for the attorney to apply for an order from the administrator.
A number of people may institute an application at the tribunal for an order. Usually, the application is made by a relative of the protected person. However, friends, professionals and many other persons can apply to the tribunal if it is so required.
The applicant’s legal expenses are rarely awarded by the tribunal. The tribunal must act in accordance with whatever is in the protected person’s best interests. Often, it is not in the person’s best interests for legal fees to be paid from their estate. For this reason, any applicant who files proceedings is at risk they may pay for their own legal fees.