Financial abuse by an Enduring Power of Attorney
With the life expectancy and age of the Australian population increasing over recent years, financial exploitation of older Australians by Enduring Power of Attorneys is becoming a serious problem in Australia.
In 2007 approximately 12.2% of Queensland’s population and 13% of the entire Australian population were aged 65% years or older. The Australian Bureau of Statistics predicts that by 2056 there will be over 6 million people in Australia over the age of 65 years of age.
As part of the aging process, the likelihood of chronic illness, dementia, Alzheimer’s and intellectual impairments increases.
According to Alzheimer’s Australia:
- Over 321,600 Australians live with dementia
- This number is expected to increase by one third to 400,000 in less than ten years
- Without a medical breakthrough, the number of people with dementia is expected to be almost 900,000 by 2050
- Each week, there are 1,700 new cases of dementia in Australia; approx. one person every 6 minutes. This is expected to grow to 7,400 new cases each week by 2050;
- One in four people over the age of 85 have dementia
- An estimated 1.2 million Australians are caring for someone with dementia
These statistics clearly indicate that Australia’s population is ageing and a significant proportion of older Australians will lose their decision making capacity. Therefore the reliance on Enduring Powers of Attorney will increase.
Importance of Enduring Power of Attorney
An Enduring Power of Attorney, in the writer’s opinion, is one of the most important documents you will ever sign. An Enduring Power of Attorney is a legal document in which you authorise another person to act on your behalf in the management of your health/person matter and/or financial matters.
By appointing someone as your Attorney for financial matters you are authorising that person to do anything you can do with your finances. The Attorneys power usually doesn’t begin until you have lost your capacity and therefore you are at your most vulnerable.
An Attorney must always do what is in the best interest of the Principal. A financial attorney will have control of your finances, will collect your income, organise your banking, pay your bill, sell or rent your property if the proceeds are needed to pay for your care, invest your money and use your money for your everyday needs.
Duties of a Financial Attorney
A Financial Attorney must:
- Keep records and accounts of dealings and transactions;
- Keep your property separate from their own (unless owned jointly);
- Not give away your property and only make reasonable gifts or donations that you would normally make.
A Financial Attorney must NOT:
- Use your money for their own benefit;
- Must not give away or sell your possessions inappropriately;
- Must not sell your property below market value and not to a relative without your consent.