If you think enduring powers of attorney are simple, you should read this

Article published 10 November 2021

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EVERYBODY would agree that preventing financial abuse of older Australians is important. But one of the things that can play a major role in doing that is in a terrible mess.

We’re talking about enduring powers of attorney.

A power of attorney (without the ‘enduring’) gives an agent the power to act for another person (the principal) to make decisions about the principal’s property, finances, or medical care. A power of attorney is often used when the principal can’t be present to sign necessary legal documents for a financial transaction.

A power of attorney sets limits to what the agent can do on behalf of the principal and often the period in which the agent can act.

An enduring power of attorney, on the other hand, remains in effect if the principal becomes ill or disabled and cannot act personally.

An enduring power of attorney is most often used where people lose mental capacity. People suffering from advanced dementia often have enduring powers of attorney in place.

Enduring powers of attorney are in a terrible mess in Australia on several counts.

First, the eight states and territories that make up the Australian federation all have their own laws governing enduring powers of attorney, and they are all different.

Second, it is not always clear (to banks, for example) if an enduring power of attorney document is real, revoked or a forgery.  The federal Government has undertaken work to put in place a National Register of Enduring Powers of Attorney.

However, we still have eight sets of laws for eight jurisdictions. Obviously, these laws need to be the same wherever you go. This has been done for other things. For example, defamation laws are state and territory laws but they’re the same everywhere. It can be done.

Third, because of all the different laws, it is difficult to educate people about how enduring powers of attorney should be used.

This is a huge problem in itself and allows enduring powers of attorney to be exploited by savvy and unscrupulous people It is common for a person holding a power of attorney to sign over property to themselves, change a will to their advantage and restrict access by friends and family members to the person they are meant to be helping.

It obviously needs quite a bit of thought and consideration before the enduring powers of attorney are assigned to someone. If things go wrong with an enduring power of attorney, they most often go wrong at this point. The consequences can be devastating, emotionally, psychologically and financially.

CPSA and other organisations, including the Human Rights Commission, is seeking a commitment from the federal, state and territory governments to reform this area of law.

For more information please email our media contact at media@cpsa.org.au

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