Wills and Estate Planning
Elder Abuse – Exploitation of Enduring Powers of Attorney
With an ever increasing aging population, elder abuse is unfortunately becoming more common throughout the Australian community. Thankfully however, people are becoming increasingly aware of the warning signs of elder abuse, and the damage that such abuse can cause families. A common story that we hear concerns the misuse of an Enduring Power of Attorney (EPA). Often, this can result in the gross financial exploitation of the elder, which can often go unnoticed for years.
Enduring Power of Attorney (EPA)
What is an EPA? It is a legal agreement that enables a person to appoint a trusted person – or people – to make financial and/or property decisions on their behalf, where that person is unable to make such decisions for themselves. An EPA can be operational while the person still has capacity, but may be physically unable to attend to financial matters. Unlike a general power of attorney, an enduring power of attorney will “endure” or continue to operate even if the donor loses mental capacity. A common misconception is that an EPA authorises an attorney to act in all circumstances, including health, personal and lifestyle decisions. This is not the case. These sorts of decisions are encompassed by an Enduring Power of Guardianship document. The EPA is limited to finance and property only. Whilst there are many benefits to having an EPA, unfortunately the private and unregulated nature of an EPA is what makes it susceptible to misuse.
Brennan v State of Western Australia  WASCA 19
Although a majority of cases around misuse of an EPA deal with family members, an example of such exploitation was highlighted in the case of Brennan v State of Western Australia  WASCA 19, which involved a professional. In this matter an elderly gentleman, facing deteriorating mental and physical health, appointed Mr Brennan (his solicitor) as his power of attorney. The elderly gentleman, constrained by his deteriorating health and isolation, was reliant on Mr Brennan for assistance with his financial affairs. Over the next eight years, Mr Brennan grossly misused his power of attorney, resulting in the misapplication of around $900,000.00 of the elderly gentleman’s money. Shockingly, Mr Brennan continued to misuse the power of attorney even after the death of the elderly gentleman. In April 2009 Mr Brennan was convicted on his plea of guilty of 70 counts of stealing from the elderly gentleman’s estate. Mr Brennan was also convicted of fraudulently attempting to gain a benefit. The difficulty with cases such as this, is that often the financial exploitation is not immediately obvious, especially when the victim is already vulnerable and isolated.
What are the available remedies?
The range of remedies available can be broadly classified into three categories:
- Statutory remedies;
- Common law; and
- Criminal remedies.
These remedies can include revoking the EPA through to prosecution for misappropriation, theft or fraud.
What can you do?
There are a number of things that you can do to protect yourself, but still enjoy the benefits of having an EPA:
- You can choose when the power of financial attorney begins. If you are confident that you will not need assistance until you have lost capacity, you may want to nominate that the power does not commence until you lose the ability to make decisions for yourself.
- You have the ability to limit the power of the attorney that you appoint. For example, you can ensure that your attorney does not enter into transactions where the attorney has a conflict of interest.
- You can appoint more than one attorney, so there are checks and balances in place.
- Consider appointing someone you implicitly trust- family may not always be the best option. Similarly, a professional may not necessarily be as reliable as family.
- You can regularly review your documents. This will help ensure that your EPA stays relevant.
- If you suspect that your attorney, or the attorney of someone in your family, is not acting in good faith, immediately seek legal advice.
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Date: February 2019