Wednesday, March 08, 2017 2:22pm
This is a submission to The Advertiser 1 March 2017 by Tony Rossi, President of the Law Society
The legal profession is seeing an increase in cases where it is alleged that a child of an elderly person suffering from dementia, who has been granted a Power of Attorney to act in the best interest of the elderly parent, uses the Power of Attorney for the child's own benefit.
There are different types of Powers of Attorney. They have the potential to allow a person to step into the shoes of the Appointor and do anything that the Appointor could do with respect to his or her assets. The Power of Attorney can only be used for the benefit for the Appointor. Ordinarily, the person appointed is not entitled to charge a fee for the exercise of the Power of Attorney.
Possibly contributing to the abuse noted is a combination of modern advances in medicine allowing people to be kept alive for longer, the increase in value of estates as a result of very substantial increases in property values in recent years, the corresponding adverse impact of house prices on the ability of the children to be able to purchase a home themselves and the corresponding increased age by which children can expect to receive an inheritance from the estate of their parents.
Lawyers have also noted an increase in concerns being raised of undue pressure upon the elderly to grant a Power of Attorney to a particular child where that person has two or more children. There is currently no legal requirement that a lawyer prepare and be involved in the signing of such an important document. But a lawyer engaged to help someone prepare a Power of Attorney has a professional duty to act in the best interest of their client so that the final document best reflects the client’s wishes and protects against abuses of power.
Where a lawyer is not involved, there may be a lack of understanding of the limits associated with the use of a Power of Attorney.
Such circumstances raise important legal and social issues.
What action should be taken when the person appointed has breached the obligation and has used the Power of Attorney for his or her personal benefit? Potentially there could be a prosecution for dishonest exploitation of a position of advantage. However, I am not aware of any prosecution in such circumstances in this State.
It is understandable that there may be some reluctance to prosecute within a family unit in such circumstances, particularly if there is a single child of the Appointor who would otherwise inherit the estate at a later stage. However, the impact, for someone who develops a severe mental incapacity, can be serious. The financial implications could preclude a continuing stay in one's own home or nursing home.
While we as lawyers deal with individual cases, the community must engage with this issue and make clear its expectation with respect to the implementation, education and enforcement of laws which should be there to assist and protect such vulnerable people.
Tony Rossi - PRESIDENT, LSSA