My Power of Attorney is being abused by my children: What should I do?

Powers of Attorney, in particular, enduring powers of attorney, are incredible powerful documents and id entrusted to the wrong persons, can in effect be a licence to steal.

How does financial abuse happen?

Powers of Attorney are a cheap, effective and private way of making sure that somebody has been appointed to making financial decisions on your behalf should you lose capacity to make your own decisions. However, it is that very same private and unregulated nature of the document that makes it susceptible to abuse.  New South Wales does not have a public register for Powers of Attorney, nor does any organisation need to be informed of the creation of a power of attorney.

Further, there is no requirement that the person appointed meet any criteria, for example financial literacy, or a history free from criminal o fraudulent behaviour. Who is appointed is entirely up to the unfettered discretion of the person making their Power of Attorney, and unfortunately the unspoken pressure to appoint family members or children can trump the niggling sense that perhaps the child being appointed is not suitable for the job.

Some famous cases

Perhaps one of the most shocking cases was that of Brennan v State of Western Australia [2010] WASCA 19. This case involved an elderly man of polish background, and limited family in Australia, making a power of attorney in favour of his solicitor.  His mental and physical health and worsened slowly over the years, and inevitable he passed away. His attorney has used the Power of Attorney document to take nearly $900,000 over an eight year period. The culprit contained to steal the money even after the victim has passed away.

Another similar case is that of Atherley -v- The State of Western Australia [2017] WASCA 53. In this case, Mr Atherley was the accountant of Ms Eva, her enduing power of attorney, her legal h=guardian and executor of her will. In 2010, Mr Atherley was removed from that position by the Supreme Court following a probate hearing. The trial judge found that Mr Atherley stole in excess of $1.62 million from Ms Eva both before and after her death by transferring funds from her account into his business account, his personal accounts and his wife’s account. Mr Atherley was sentenced to a total effective sentence of 7 years and 6 months imprisonment with eligibility for parole.

What can be done after the dishonesty is detected?

Depending on the nature and severity of the breach of trust, there are many different remedies available. They can be broadly classified into three categories:

  1. statutory remedies (depending upon whish state you live in, and the Power of Attorney was made in and was used);
  2. common law remedies; and
  3. criminal remedies.

If the appointer (the person who made the Power of Attorney) is still alive and is of sound mind, the they can contact us and we can assist them by revoking the existing Power of Attorney and appointing a new one (if required). However, if the appointor has lost mental capacity, the matter may need to be referred to the Guardianship Division of NSW Civil and Administrative Tribunal.

NCAT can review an enduring power of attorney and make orders under the Powers of Attorney Act 2003. It can declare that a person who made an enduring power of attorney (‘the principal’) did not have the mental capacity to do so and that the enduring power of attorney was invalid.

NCAT can vary or revoke an enduring power of attorney. It can appoint a substitute attorney and it can declare the principal is not competent to manage their affairs.

In order to attempt to recover the funds, as much more complex path need to be taken, and we encourage you to obtain legal assistance.

Leave a Reply