Elder abuse is becoming an increasingly troubling issue in Australia and especially South Australia given our aging population and the fact that, sadly, we sometimes see the affairs of our elderly being poorly managed or mistreated by people entrusted to care for them.
When we see a family member being accused of abuse of an older relative it really emphasises the problem: if you cannot trust family who can you trust?
Enduring powers of attorney
A common situation where we see the allegation of elder abuse being levelled against family members is in the case of the exercise of enduring powers of attorney.
A power of attorney is a legal document by which a person (called “the grantor” or “the donor”) grants someone (“the grantee” or “the donor” or commonly “the attorney”) to act for them in relation to financial or legal matters in circumstances where that family member is perhaps unable to act for themselves.
An enduring power of attorney is a power of attorney that operates from the date of execution and continues to operate despite the donor later becoming mentally and/or physically (“legally”) incapacitated or it can operate only if the donor becomes legally incapacitated.
Enduring Powers of Attorney are a very inexpensive and effective estate planning tool and the best way in which you can have your affairs managed by trusted individuals ahead of time. The older and more prone to illness or incapacity you become, the more likely the need to have an Enduring Power of Attorney.
Extra care should be exercised to ensure that your attorney is trustworthy and honourable. Consideration may well be given to the appointment of more than one attorney so that you have a de facto “committee” of people you can trust working in your best interests.
However, deciding on people you can trust can sometimes be difficult. What if your donor goes rogue or their power is abused or misused in some way that is not necessarily in your interests?
Ending a Power of Attorney
If the Enduring Power of Attorney is not being exercised properly or the donor no longer wants to have their attorney managing their affairs, consideration needs to be given to immediately ending the Enduring Power of Attorney.
An Enduring Power of Attorney ceases to operate if the donor notifies the attorney that it is revoked, or terminated. This should be done formally in writing by using an instrument called a Revocation of Power Attorney and the attorney must be given notice of the Revocation.
Once served with or notified of the Revocation, any actions by the attorney will be treated as invalid and beyond power.
If the donor owns real estate, then the Revocation of Power of Attorney should be deposited in the Lands Titles Office. Equally, copies of the Revocation should be provided to the donor’s banks and other authorities.
But what if the donor is legally incapacitated and can no longer make decisions for themselves such as signing a Revocation of Power of Attorney?
Sanctions under the Powers of Attorney and Agency Act 1984 (“the Act”)
The Act provides that an attorney in the case of Enduring Powers of Attorney must, during any period of legal incapacity of the donor, exercise their powers as attorney with reasonable diligence to protect the interests of the donor and, if they fail to do so, the attorney shall be liable to compensate the donor for loss occasioned by the failure.
The Act also provides an attorney will be guilty of an offence and liable to a penalty if the attorney fails to keep and maintain accurate records and accounts of all dealings and transactions made on behalf of the donor.
But what else can be done to address allegations (financial) elder abuse undertaken under a power of attorney?
If the donor is legally incapacitated, an interested party, perhaps another family member, may apply to the Supreme Court:
- requiring the donee to file copies of all records and accounts kept by the donee of dealings and transactions made by the attorney; or
- requiring that the attorney’s records and accounts be audited by an independent auditor;
- revoking or varying the terms of an Enduring Power of Attorney or appointing a substitute attorney.
South Australian Civil and Administrative Tribunal (“SACAT”)
Instead of an application to the Supreme Court, which can be expensive, the interested person may well be advised to apply to SACAT for an administration order.
An administrator can be a family member, another interested person, or more likely Public Trustee.
An administrator has the power to vary or revoke any enduring power of attorney that has been made, in the same way as the donor could if they were of sound mind.
SACAT also has the power to authorise an administrator to:
- gain access to the donor’s will or other records; and,
- continue to manage a donor’s estate after death for a short time (up to two months) and then hand over the affairs to an executor of the donor’s will.
Liability of attorneys after death of donor
If a donor subsequently dies, it is possible for the executor of the donor’s estate to still pursue the attorney failure to protect the interests of the donor during the exercise of the power of attorney and the attorney can still be liable to compensate the donor’s estate.
Similarly, the beneficiaries of the donor’s estate may apply to the Supreme Court to ensure that no beneficiary is disadvantaged by the effect of the attorney’s actions during the legal incapacity of the donor.
If you believe that a family member or friend has been the subject of elder abuse, whether or not in the purported exercise of a power of attorney, please contact us on 8276 7955 or email us your enquiry at email@example.com.