What Happens if My Power of Attorney Abuses that Power?

By 14 December 2018Wills & Estates

There’s no escaping it. As an adult, you have certain responsibilities, some of which are by their nature tedious, burdensome, or simply unpleasant. One of these is “putting your affairs in order”. As onerous as this task is, by doing so you will ensure that your wishes are known and carried out if you are unable to take care of yourself for any reason.

Giving someone legal permission to handle your finances when you can no longer do so is known as designating a power of attorney or an enduring power of attorney (EPA). But what happens if the person entrusted with this task abuses that power?

Examples of abuse of power of attorney or EPA

Abuse of this authority occurs anytime that the person given legal control of your finances accesses or uses your money for personal gain without your knowledge or consent.

Take one documented case in New South Wales, for example. In this particular situation, a man acting as his father’s power of attorney accessed his dad’s savings and nearly cleaned it out. By the time anyone caught on, he had spent more than $150,000 on himself. Needless to say, he did not go unpunished – the Court sentenced him to two years imprisonment, of which he had to spend at least a year in jail.

Now let’s consider a hypothetical situation in which you’ve appointed a relative as enduring power of attorney, thereby giving them the ability to make decisions about your finances. Unbeknown to you, however, they’ve been dipping into your bank accounts to pay their own bills. This is also an abuse of authority, and must be dealt with as soon as possible.

Someone appointed as power of attorney or enduring power of attorney could also violate your trust – and the law – by using your credit cards to buy things for themselves, or in a worst-case scenario, even taking or transferring ownership of your house.

Pursuing legal recourse

If you already have a power of attorney or enduring power of attorney and you suspect that they are not acting in your best interest or abusing their authority, do not hesitate to contact a lawyer. You need someone who can quickly and thoroughly evaluate your situation and provide legal advice accordingly. Depending on what’s been happening, you may also need a lawyer to help you:

  • withdraw the EPA;
  • file official paperwork with the Registrar of Titles to stop any further transfers of the property;
  • withdraw any bank signatory arrangements or other means by which theĀ  abuse is occurring;
  • initiate court proceedings for remedies to reverse a transfer of the property;
  • initiate court proceedings to obtain compensation for the transgressions;
  • make you aware of applicable deadlines;
  • obtain orders under the Domestic and Family Violence Protection Act 2012 for economic abuse, and or orders to oust/remove an offender from a property;
  • withdraw any Social Security Nominee appointments.

You should also contact a lawyer if you suspect that someone acting as power of attorney or enduring power of attorney for a friend or relative is abusing their authority. This is especially important if the person who appointed the power of attorney or EPA is no longer capable of acting on their own.

In New South Wales, a lawyer can help you ensure that the issue is referred to the Guardianship Division of the New South Wales Civil and Administrative Tribunal (NCAT). This tribunal will then address the matter, and issue an order for restitution if necessary.

In Victoria, the Victorian Civil and Administrative Tribunal (VCAT) has similar powers in such cases. The VCAT can revoke or suspend an attorney’s power, and order the attorney to compensate the principal for a loss caused by the attorney contravening any provision of the Powers of Attorney 2014 Act.

Even if there is no reason to believe a power of attorney or EPA has abused their authority, there may still be cause for concern. This is because people entrusted with this responsibility must perform their duties in accordance with certain rules.

If you’re close to the donor (the person who appointed the power of attorney or EPA) and you haven’t been consulted about certain decisions, or you’ve been prevented from seeing the donor, the power of attorney or EPA may be violating these rules. Contact us to learn more today.