We should all consider making an enduring power of attorney – not only the elderly and infirm. As a power of attorney can only be made while you are of sound mind therefore making an enduring power of attorney is a safeguard against the possibility of not having anyone with authority to manage your property and finances if you suffer loss of mental capacity.
If you don’t have an enduring power of attorney and have an accident that affects your mental capacity the only way to manage your financial affairs will be if a friend or relative makes an application to be appointed as your financial manager through the Civil and Administrative Tribunal or the Supreme Court.
It is much simpler to give someone an enduring power of attorney.
You can elect when the power of attorney comes into effect. You could elect that this will occur when you lack capacity or when your attorney considers that you need assistance managing your financial affairs.
Importantly an enduring power of attorney allows your attorney to stand in your shoes in order to manage your financial affairs – therefore your attorney should be some one you trust.
William was in his early 80s when he met a woman at a casino. The pair quickly became inseparable. William was a lonely man, and notwithstanding an age gap of about 30 years he relied on this woman for company.
William had appointed John as his decision-maker using an enduring power of attorney document. However he added his carer ensuring that she would have joint access to his bank accounts if and when he lost capacity.
William was blind, he later suffered a fall and it was decided he could no longer support himself; he was moved into a nursing home.
John was not worried about William’s carer being named as a joint attorney, however he became concerned when the nursing home informed him that William had not paid his fees for many months. After checking William’s bank accounts it was discovered that more than $1.2 million had been withdrawn over the previous two years.
The carer had Williams cheque book and would regularly ask William for his signature. William trusted the carer so he signed blank cheques and she would fill in an amount. The carer would then visit the bank to make withdrawals, citing William’s power of attorney document.
The disappearing funds left William without enough money to pay for his own room at his nursing home and he was forced to share with another resident.The carer denied any wrongdoing insisting that she was acting on William’s instructions.
William approached a lawyer who believed that he would have a better chance of recovering the stolen money if he pursued the bank, rather than the carer.
The bank had a copy of the power of attorney document, which clearly stated William had two decision-makers; therefore none of the transactions should have been allowed without the permission of both William’s carer and his friend John.
Additionally, the bank had not complied with anti-money laundering legislation, as it had not reported the withdrawals greater than $10,000. The bank’s staff members had put notations on the system that they were concerned about what was going on but nobody called William – it should have been standard practice to query the transactions.
The bank reached a settlement with William; in most cases the details of settlements are confidential, therefore the bank cannot be identified.
The carer was removed from the power of attorney document and John remained the sole decision-maker until William died earlier this year.
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