What is an Enduring Power of Attorney?
An Enduring Power of Attorney (EPOA) appoints a person, or persons, to make legal and financial decisions on your behalf once you have lost the mental capacity to make these decisions on your own due to a serious illness or injury.
If your EPOA is not explicit in its instructions, it is possible for your attorney to authorise transactions which will result in a substantial reduction in your estate’s value. This may be demonstrated through an excessive withdrawal of funds or the closing of bank accounts. In other circumstances, an attorney may sell assets or transfer real estate to their own name.
How to protect your assets in your Enduring Power of Attorney
Misuse of an EPOA can be prevented by ensuring that you have written clear and comprehensive instructions on every legal, financial and personal matter that is significant to you.
Choosing a trustworthy attorney/s is paramount to protecting your interests. It is best to appoint someone who knows you well and can anticipate your needs. Your attorney/s should respect your decisions and be objective when needed. For more information on selecting the ideal attorney and the circumstances in which a Power of Attorney is important, please refer to our blog or the NSW Trustee & Guardian website.
In your EPOA, you may also elect to have regular third-party checks conducted through audits or annual reviews to ensure that your attorney is appropriately managing your assets.
What should you do if an attorney is misusing their position?
If you do not specify any conditions that your attorney must abide by before you have lost mental capacity, it is possible for your attorney to misuse their authority. Consequently, it is best to enlist a legal professional when preparing your EPOA so you may safeguard the management of your assets and personal wishes.
If you are concerned that an attorney is not acting in the best interests of the person who has lost their mental capacity, you may apply to the NSW Civil and Administrative Tribunal (NCAT) for a review. NCAT will review the operation and effect of an EPOA and can order that an attorney is removed, revoke all or part of the EPOA or appoint a substitute attorney. NCAT can also order an audit on financial records, transactions and accounts made under the EPOA as well as issue an inquiry and report on the conduct of the attorney.
A solicitor at Etheringtons Solicitors can assist you in the creation, amendment or revocation of a Power of Attorney. If you have any concerns regarding an existing EPOA, please contact one of our experienced solicitors on (02) 9963 9800 or via our online contact form.