Getting It Right, The First Time
The level of trust you should have in an attorney, prior to their appointment.
In the news recently was an article concerning the criminal charges of a lady who has allegedly misappropriated almost $3 million from an elderly lady, under an Enduring Power of Attorney. In this instance, the alleged perpetrator has been charged with a criminal offence, but this reinforces the need for critical consideration as to who you may want to appoint as your attorney.
An Enduring Power of Attorney (“EPA”) is one of the most powerful documents that you can sign – arguably even more so than a will. By the EPA, you (the Principal) can appoint an attorney to act on your behalf for your financial, and personal/health matters – and depending on the terms of the document, you enable that attorney to do anything on your behalf that you could lawfully do for yourself. When advising clients, I like to put it as simple as possible – you need to pick your attorney carefully, because you may be giving your attorney the power to potentially rob you blind.
Under the law, an attorney can be made to account for any improper misappropriation of property of their principal. However, to use a clichéd analogy, recovering property from an attorney after they’ve misappropriated it, is a little like closing the door after the horse has bolted from the barn. By that time, they’ve taken the property, and it can be difficult – or sometimes impossible – to recover. For example, if your attorney has taken all of your money, then you may be hamstrung in your ability to obtain legal advice as to your options to recover your money – assuming the attorney still has it. Or perhaps worse, if your attorney were to spend all of your money on gambling, and has no assets of their own, then it may be effectively impossible to recover any of your money. Although criminal charges are an option (and appropriate) – it won’t return your misappropriated money to you, and can cripple your future.
To further complicate all of these issues, another aspect of the Power of Attorney is that it authorises your attorney to act for you if you have lost capacity. So, if you were to have a stroke, suffer from dementia or Alzheimer’s, or otherwise be incapacitated and unable to communicate your decisions, then your attorney can step in and look after your affairs whilst you lack capacity. This is perhaps the most critical time, because you (the Principal) have effectively lost oversight of your attorney. If your attorney uses that opportunity to misappropriate or take your property, then it may not be discovered until someone else becomes aware of the issue and alerts either the police, a lawyer, the Public Guardian or Public Trustee.
So how much trust do you need in your attorney? In short, the answer should be absolute and implicit. If you have any doubts, then in all likelihood, that person should not be appointed as your attorney. Although it may be only a slight hesitation, at the end of the day, your entire livelihood and estate is at risk, and it can be difficult to recover – and so any apprehension should be enough to look elsewhere for an attorney.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.
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