I am receiving increasing interest and enquiry from clients about abuse, or perceived abuse, of an Enduring Power of Attorney. Often I am approached by one family member who is concerned about the conduct of another family member who has been appointed as an Attorney for their parents who have lost capacity.
The Attorney’s Control
It is very important to understand the extent of control that an Attorney can have over a person’s assets. These powers include:
- Dealing with monies in bank accounts;
- Dealing with property;
- Applying to the Court for a statutory Will to be made;
- Severing joint tenancies for the ownership of property;
- Taking out mortgages on behalf of the attorney;
- Installing themselves as “Carers”;
- Changing death benefit nominations for insurance and superannuation;
- Taking control of family trusts;
- Amending trust deeds;
- Withdrawing superannuation.
A “creative” attorney can deal with the assets of the person who appointed them in a number of ways to deplete those assets.
Control the Controller
It is very important that the actual document appointing a person as an Enduring Power of Attorney is thoroughly considered to protect your assets. Matters that need to be taken into account include:
- Who to appoint – it is imperative that a person you appoint is someone that you absolutely trust and that some protection mechanisms are put into place. For example you can have more than one attorney who must jointly make decisions;
- Controls – You can insert some protective controls to restrict the attorney’s power to deal with some of following:
- Business affairs – Dealing with the incapacity of directors and shareholders, carrying on your business, providing guarantees for any borrowings;
- Family Trust – You should review your trust deed to consider what happens on the incapacity of a trust and consider who has the power to control the trust and appoint a new trustee;
- Conflict transactions – where the attorney may transfer assets to him or herself. You can prevent the attorney from engaging in a conflict transaction unless specific transactions are allowed and recorded;
- Your Will – You should make sure that the attorney is aware of the contents of your Will and the effect that their decisions may have on bequests you have made;
- Have more than one attorney appointed;
- Superannuation – You should ensure that proper advice is obtained before superannuation is dealt with and consider whether or not an attorney can make or renew any superannuation death benefit nomination;
- Your accommodation in to the future – If a nursing home is not preferred you may stipulate what type of care you would like;
- Obtaining financial and legal advice;
- Caring for pets and children;
- Life and lifestyle generally.
It is very important to invest your time to properly consider all of the implications in appointing a person as an Enduring Power of Attorney. Detailed consideration of these matters could avoid considerable for you and your family. Please do not hesitate to contact me if you have any queries or concerns in relation to an Enduring Power of Attorney.