I read an article recently about the Human Rights Commission issuing a new guide on how retirees can protect themselves against fraud. According to the Human Rights Commission, the creation of the guide was prompted by complaints from retirees that their savings and homes were being taken from them by relatives taking advantage of their deteriorating mental faculties.

One way in which a retiree (or anyone, for that matter) can find themselves the victim of fraud at the hands of family members is through signing an Enduring Power of Attorney giving a relative financial or personal and health powers which are then abused by the Attorney.

This three part series will address:

1. What an Enduring Power of Attorney is and how to make one;
2. Duties of an Attorney; and
3. How an Attorney can abuse their powers and what to do if you think you or someone you know may be a victim of an unscrupulous Attorney.

What is an Enduring Power of Attorney (EPA)?

• An Enduring Power of Attorney is a document signed by you which gives someone else the power to make decisions about your finances, personal/health matters or finances and personal/health matters.
• Personal/health matters include choosing your health care, personal care (such as nursing homes, in-home care etc) and living arrangements.

When can the Attorney start making decisions for me?

The power to make decisions about your personal/health matters only begins once you lose the capacity to make these decisions yourself, but the financial power can begin at any time you state in your Enduring Power of Attorney. It is therefore important that you consult a solicitor skilled in the areas of Wills and estates to advise you on when your Attorney’s power should commence. For example, you can state that the Attorney’s powers begin immediately – which is sometimes used by spouses who are each other’s Attorneys and share all their finances – or only when you lose capacity to make financial decisions for yourself.

When should I make an Enduring Power of Attorney?

It is very important that you make your EPA before you lose capacity. If you think someone you know has signed an Enduring Power of Attorney without having the capacity to do so, consider the following:

1. Did the person making the Enduring Power of Attorney understand that they could specify or limit the power to be given to the Attorney and instruct the Attorney about how to exercise their power?
2. Did they understand when the power for their Attorney begins?
3. Did they know that once the power begins, the Attorney can make and will have full control over their financial and or personal/health matters, subject to any terms stated in the Enduring Power of Attorney?
4. Did they understand that they can revoke the Enduring Power of Attorney at any time they are capable or making an Enduring Power of Attorney giving the same power?
5. Did they know that the power they have given continues even if their capacity becomes impaired?

If you answered “No” to any of these questions, it may be the case that the person did not have capacity to sign the Enduring Power of Attorney.

How do I make an Enduring Power of Attorney?

The Enduring Power of Attorney forms are available on the website of the Department of Justice and Attorney General, but as it is such formal document that can have serious implications for your personal and financial matters, you should obtain legal advice before signing one.

In the next blog instalment in this series I will address the duties of an Attorney. If you would like to make an Enduring Power of Attorney, or revoke an existing one, you should obtain the advice of an experienced estate planning lawyer. Please do not hesitate to contact me should you require assistance.