Sadly it is not infrequent that we are asked to help recover funds belonging to an elderly and vulnerable person taken by a close relative, usually misusing an Enduring Power of Attorney document to do so.
An Enduring Power of Attorney document appoints someone (called the Attorney) to make decisions for another (called the Principal) about personal decisions such as about their medical treatment and about their finances, if a Principal, while still alive, becomes incapable of making those decisions for themself.
An Enduring Power of Attorney document is a useful, practical, and cost-efficient document when used properly reduces the stress placed on families caused by the loss of capacity. However, not enough thought goes into properly preparing these documents to include simple practical safeguards such as:-
- Do not appoint a single Attorney. Appoint two or more Attorneys and instruct them to exercise their powers jointly. That way two sets of eyes are over each transaction. Be careful if appointing Attorneys who are spouses because that erodes independence.
- Appoint a commencement date for the financial aspect of the Power of Attorney as late as you possibly can, that is when a Doctor certifies that you have lost the capacity to make these decisions for yourself.
- Quarantine assets by specifically excluding them from the operation of the Enduring Power of Attorney document.
- Stipulate who your Attorney should report to every 6 to 12 months about each transaction over a predetermined monetary limit.
- Do not give unlimited access to all your bank accounts, particularly through internet banking facilities. Think about quarantining bank accounts.
- Remember that he who is faithful with little, will be faithful with much. Your Attorney will be someone you have observed over many years to deal with in an honest and faithful manner.
If this article has provoked you to think perhaps your existing Power of Attorney document could be better written, or you don’t have one and need one, then call us today.