Financial elder abuse can devastate entire families
A recent story online discusses an inquiry into elder abuse in Australia by the Australian Law Reform Commission. As a result of the inquiry, it was proposed that a national register of powers of attorney be established. Part of the reason for the proposed register is that currently there is no way to check the validity of these documents when someone claiming to have been appointed an attorney attempts to withdraw money from a bank on the grantor’s behalf. This can obviously lead to fraud and abuse. Additionally, there is no way to know if there are multiple powers of attorney. This can lead to confusion and delay.
The creation of an online database of powers of attorney has also been discussed. This would permit the quick verification of the document being presented. However, this may result in difficulties if a valid power of attorney has not been registered in the database.
The Australian Law Reform Commission is also proposing to make it a requirement to have at least two people witness the power of attorney being signed. At least one of the witnesses would have to be a lawyer, doctor, or police officer. Another proposal is to have a strategy to deal with financial elder abuse at the level of the banks. Under this proposal, transactions dealing with an elderly individual’s account would have to be approved by at least two people that know them. Although this seems like a reasonable safeguard, it is likely to make the handling of the elderly person’s financial affairs difficult and time-consuming for the appointed attorney.
Financial elder abuse is likely to become ubiquitous with time
As our population ages, the frequency of elder abuse is likely to increase. Parents are living longer, and children may be tempted to use a power of attorney to obtain an “early inheritance”. They may believe that since they are going to eventually “receive it anyway”, there is nothing wrong with using a power of attorney to obtain funds in advance. Unfortunately, his kind of misuse is becoming more and more common.
Although the above proposals are not perfect, it is important that the Australian Law Reform Commission has taken steps to investigate the issue of financial elder abuse.
Power of attorney abuse is a very serious matter. It is important for the grantor of a power of attorney to seek advice about the practical consequences. Not all people understand what a power of attorney is. Many people draft generic powers of attorney by looking at precedents on the internet. Some powers of attorney take effect immediately after signing. Depending on the mental capacity of the grantor, revocation may be difficult after they are signed. If there are issues with capacity when the document is signed, it may be invalid.
If an attorney acts based on an invalid power of attorney, other family members may sue him. The use of a power of attorney may have legal consequences for well-meaning attorneys who do not understand their duties and obligations. Whenever granting a power of attorney or agreeing to act as an attorney, it is important to seek legal advice.