Changes to guardianship & administration laws in Victoria

Wills and Estates: 27 July 2020

The Guardianship and Administration Act 2019 (Vic) (the Act) came into effect on 1 March 2020. The Act repeals the former Guardianship and Administration Act 1986 (Vic).

Summary of key changes

This short article, which is intended to provide a summary of the key changes in relation to guardianship and administration matters, looks at the following six topics:

1. Definitions of 'promote the personal and social wellbeing of a person' and 'decision making capacity'
2. Matters to be considered by the Victorian Civil and Administrative Tribunal (VCAT) when appointing a guardian and/or administrator and when making an order
3. Powers and duties of guardians
4. Powers and duties of administrators
5. Compensation provisions
6. Criminal offences

Definitions of 'promote the personal and social wellbeing of a person' and 'decision making capacity'

Before making a guardianship, administration, or supportive order, and in some situations for special medical procedures, VCAT must now be satisfied that the order will promote the personal and social wellbeing of the proposed represented person. So how is this achieved? This can be achieved by an order being made that:

• Recognises the inherent dignity of the person
• Respects the person's individuality
• Has regard to the person's existing supportive relationships, religion,values and cultural and linguistic environment
• Respects the confidentiality of confidential information relating to the person
• Recognises the importance to the person of any companion animal the person has and having regard to the benefits that may be obtained from the person having a companion animal.

Similar to the Powers of Attorney Act 2014 (Vic), it is presumed a person has decision making capacity unless there is evidence to the contrary. Decision making capacity is a temporal concept and a person will not lack decision making capacity simply because of their appearance or because they make a decision, which in the opinion of others, is unwise. A person will have decision making capacity if they are able to:

• Understand the information relevant to the decision and the effect of the decision; and
• Retain that information to the extent necessary to make the decision; and
• Use or weigh that information as part of the process of making the decision; and
• Communicate the decision and the person's views and needs as to the decision in some way, including by speech, gestures or other means.

When assessing decision making capacity, reasonable steps must be taken to assess capacity at a time and in an environment where decision making capacity can most accurately be assessed.

Matters to be considered by the Victorian Civil and Administrative Tribunal (VCAT) when appointing a guardian and/or administrator and when making an order

If VCAT is satisfied that a proposed represented person does not have decision making capacity due to a disability, and is in need of a guardian or administrator, and an order will promote their personal and social wellbeing, then VCAT will consider the following matters:

• The will and preferences of the proposed represented person (so far as they can be ascertained)
• Whether decisions can be made in an informal matter, without the need for an order
• The wishes of any primary carer or relative, or other person with a direct interest
• The desirability of preserving existing relationships that are important to the proposed represented person
• The availability the proposed guardian / administrator to meet and communicate with the proposed represented person

Powers and duties of guardians

Once appointed, a guardian will have the following powers and duties with respect to the represented person:

• Power to make decisions for personal matters (including living arrangements, work, education or training, diet and dress, medical treatment decisions, and who they associate with)
• Power to conduct legal proceedings where necessary to promote the represented persons personal and social wellbeing
• Duty to act as advocate for the represented person and encourage them to develop their decision making capacity
• Duty to protect the represented person from neglect, abuse and exploitation
• Duty to act honestly, diligently and in good faith
• Duty to not use their position to profit, and to avoid acting if there is or may be a conflict of interest

Note that a guardian cannot make or revoke a represented persons will or enduring power of attorney, nor can they on behalf of the represented person vote, consent to their marriage or divorce, make decisions in relation to their children under the age of 18 years or their parenting orders.

Powers and duties of administrators

Once appointed, an administrator will have the following powers and duties with respect to the represented person:

• Power to make decisions for financial matters (including making money available, paying expenses, paying debts, performing contracts, financial or property affairs, insuring property, making or continuing investments)
• Power to make reasonable gifts
• Power to open the represented person's will, purported will, or revoked will deposited with the administrator
• Power to give consent in a representative capacity (as trustee or guardian of a trust)
• Power to bring or defend legal proceedings on behalf of the represented person
• Duty to act as advocate for the represented person and encourage them to develop their decision making capacity
• Duty to protect the represented person from neglect, abuse and exploitation
• Duty to act honestly, diligently and in good faith
• Duty to not use their position to profit, and to avoid acting if there is or may be a conflict of interest (however, there are some exceptions relating to gifts, jointly owned property, and the maintenance of dependants)

Note that an administrator cannot make or revoke a represented persons will or enduring power of attorney, nor can they on behalf of the represented person vote, consent to their marriage or divorce, make decisions in relation to their children under the age of 18 years or their parenting orders.

Compensation provisions

If a guardian or administrator breaches their duties or obligations and causes loss to the represented person they can be ordered to compensate the represented person, or if they have died, their estate. An application for compensation can be made by a represented person, a personal representative of a represented person, the executor or administrator of a represented person, the nearest relative, the office of the public advocate, or a person held to have a special interest.

An application for compensation must be made within six months of the death of the represented person, or, if the guardian or administrator has died, within six months of their death. VCAT or the Supreme Court may extend the six month time period in certain circumstances.

Criminal provisions

A guardian or administrator who dishonestly uses an order to obtain financial advantage for themselves or others, or to cause loss to the represented person or others, faces penalties of up to five years imprisonment or 600 penalty units or both. A body corporate faces a fine of up to 2300 penalty units.

Where can I get advice?

The lawyers in the Wills & Estates team at Aitken Partners are available to answer any queries you may have about the Act, or your appointment as a guardian and/or administrator.