A misuse of a power of attorney arises where an enduring attorney uses the powers given to them by the the person who made the enduring power of attorney to benefit themselves (or someone close to them) at the expense of the person they are supposed to be protecting.
An example of how a Power of Attorney can be misused is as follows:
June is 87 years of age, hard of hearing and frail. June is still mentally very capable but finds it difficult to get out to the bank to pay her bills and to withdraw money.
June consults her solicitor and decides to appoint her daughter, Melanie, as her enduring attorney for financial matters with the powers to start immediately.
She does this so that Melanie can go to the bank on her behalf and withdraw the money she needs.
Melanie takes the power of attorney to Betty’s bank. The bank accepts that Melanie is able to act as June’s attorney for financial matters immediately and notes this in the bank records. Melanie becomes a signatory to June’s account.
June didn’t know that Melanie is having financial troubles when she appointed her daughter as her power of attorney. Each week Melanie shops for June buying groceries with June’s debit card, but she also makes cash withdrawals and rather than give this money to June, she keeps it for herself.
June trusts her daughter, and therefore does not look at her bank account statements or has any idea that money is being used by Melanie in this way.
Another way in which Melanie could misuse the power of attorney could be for Melanie to sign off on June’s credit card transactions. Melanie could use the credit card to buy things for her own benefit, including through the internet.
Melanie could also use the power of attorney to transfer June’s house to herself or someone close to her.
If you suspect that a power of attorney is being misused, it is vital to seek legal advice immediately.
The misuse of an EPA can be very serious. Sometimes the damage is done before anyone realises what has been going on and by that time, the assets and property have been irretrievably lost. Sometimes those affected by the misuse can apply for compensation.
What to do if you suspect the misuse of a power of attorney where there is impaired capacity?
If you are concerned that a power of attorney is being misused, and the person is incapable of doing anything about the situation due to impaired capacity, you need to take immediate action.
The first step is to seek legal advice from a specialist in estate planning.
The Office of the Public Guardian of Queensland is responsible for investigating, and taking action where an adult with impaired capacity is being neglected, exploited or abused.
The Office has the power to require documents and records to be produced by a power of attorney and to look at bank records and other documents as part of its investigations.
If necessary, the Office can take action to suspend the attorney’s powers for a period of three months.
An Attorney is personally accountable for their actions. If an Attorney mismanages a person’s affairs whether deliberately or by negligence; they can be held liable for their actions. This can include facing court proceedings to recover money and even criminal charges.
Application to the Queensland Civil Administrative Tribunal (QCAT)
In some situations, although the attorney may not be neglecting, exploiting or abusing the donor, they may not be carrying out their duties in accordance with the General Principles which are the principles set out in the Guardianship and Administration Act 2000 under which attorneys are to operate. For example, they may not be consulting people close to the donor or may be excluding people of significance from the donor’s life.
Sometimes, an application to the Queensland Civil Administrative Tribunal (QCAT) is necessary.
QCAT has the power to remove enduring attorneys who are not carrying out their duties and appoint other people or entitles, such as the Public Trustee of Queensland, to make decisions for the person with impaired capacity.
While it is possible to download a document from the Internet to sign, we always recommend that you seek legal advice. A one size fits all document can’t cater to all circumstances.
We offer a free, 10-minute phone consultation. Contact us today if you need a power of attorney or are concerned about the misuse of one.