A ‘misuse of enduring power of attorney’ arises where an enduring attorney uses the powers given to them by the donor (the person who made the enduring power of attorney) to benefit themselves (or someone close to them) at the expense of the donor.
The misuse of an Enduring Power of Attorney can be a form of financial abuse. See our Information Sheet on ‘What is Financial Abuse?’
An example of how an Enduring Power of Attorney (“EPA) can be misused is as follows:
- Betty is 82 years of age, hard of hearing and frail. Betty is ‘still on the ball’ but can’t get out to the bank to pay her bills and to withdraw money.
- Betty sees her solicitor and signs an EPA in which she appoints her daughter, Cheryl, as her enduring attorney for financial matters with the powers to start immediately.
- Cheryl takes the original document to Betty’s bank. The Bank officer looks at the document and accepts that Cheryl is able to act as Betty’s attorney for financial matters immediately and notes this in the bank records and records Cheryl as a signatory to Betty’s accounts.
- Cheryl is having financial troubles. Each week she shops for Betty buying groceries with Betty’s debit card, but she also makes cash withdrawals and rather than give this money to Betty, she keeps it for herself.
- Betty does not look at her bank account statements and has no idea that money is being used by Cheryl in this way.
This is one example of the way in which an EPA can be misused.
There are many other examples.
For instance, Cheryl could use the EPA and the recognitition given to it by the Bank, to sign off on Betty’s credit card transactions. Cheryl could use the credit card to buy things for her own benefit, including through the internet.
Another serious misuse would arise if Cheryl used the EPA to transfer Betty’s house to herself or someone close to her. Cheryl would need to have the Enduring Power of Attorney registered with the Registrar of Titles to do this
What to do if you suspect your EPA is being Misused?
If you suspect that someone is misusing your EPA, you should obtain legal advice.
You may need to take action such as:
- revoking the EPA;
- lodging a caveat with the Registrar of Titles to stop any further transfers of the property;
- revoking any bank signatory arrangements or other means by which the abuse is occurring ( see Information Sheet- Misuse of Enduring Powers of Attorney LINK);
- starting Court proceedings for remedies to reverse a transfer of the property;
- starting Court proceedings to obtain compensation for what has occurred;
- obtaining legal advice and being aware of time limits that apply in relation to applications for compensation involving the misuse of an Enduring Power of Attorney;
- consider obtaining orders under the Domestic and Family Violence Protection Act 2012 for economic abuse and or orders to oust / remove an offender from a property;
- revoking any Social Security Nominee appointments.
What to do if you suspect an attorney is misusing the Donor’s EPA and the Donor has Impaired Capacity?
If you are concerned that an EPA is being misused by an enduring attorney for a donor who is incapable of doing anything about the situation, you may need to take action to assist the donor.
If the reason that the donor can’t do anything about the situation is because they suffer from impaired cognitive capacity, for example, because of dementia, you could consider making a complaint to the Office of the Public Guardian.
The Office of the Public Guardian of Queensland is responsible for investigating, and taking action where an adult with impaired capacity is being neglected, exploited or abused.
- The Office has the power to require documents and records to be produced by an EPA and to look at bank records and other documents as part of its investigations.
- If necessary, the Office can take action to suspend the enduring attorney’s powers for a period of three months.
In addition to the above and due to the delay that can arise while an investigation is undertaken, you should obtain urgent legal advice in case other actions, such as that referred to above, needs to be considered.
Application to the Queensland Civil Administrative Tribunal (QCAT)
If the donor is a person who has impaired capacity or is likely to have impaired capacity, it may be necessary for you to consider taking other action to protect their interests.
In some situations, although the attorney may not be neglecting, exploiting or abusing the donor, they may not be carrying out their duties in accordance with the General Principles which are the principles set out in the Guardianship and Administration Act 2000 under which enduring attorneys are to operate. For example, they may not be consulting people close to the donor or may be excluding people of significance from the donor’s life.
Sometimes, an application to the Queensland Civil Administrative Tribunal (QCAT) is necessary.
QCAT has the power to remove enduring attorneys who are not carrying out their duties and appoint other people or entitles, such as the Public Trustee of Queensland, to make decisions for the person with impaired capacity.
Misuse Can have Very Serious Consequences
The misuse of an EPA can be very serious. Sometimes the damage is done before anyone realises what has been going on and by that time, the assets and property have been irretrievably lost.
Sometimes those affected by the misuse, can apply for compensation. This includes people who may have lost a benefit under the donor’s Will because of the enduring attorney’s actions.
If you suspect that your enduring attorney or the enduring attorney of someone close to you is not acting properly, do not delay. Obtain legal advice as soon as possible. It may be the only way to stop what may otherwise be a very destructive misuse of wide powers.
Refer to our Information Sheet on Financial Abuse