A power of attorney has the potential to be very dangerous in the wrong hands so clearly the best safeguard is to choose a donee who is very trustworthy. Although it is a criminal offence to misuse a power of attorney, for example to take money or to not use money in the person's best interest, it may be difficult to detect the crime. With an enduring power of attorney, the donor may be incapacitated and may not be capable of discovering the crime. There is no official checking done to ensure that donees are doing their job properly. If a person makes a power of attorney with no conditions, the donee is able to sell, mortgage or give away all that donor owns.
The following suggestions may help a person to safeguard their interests.
- Let at least one other person know who the attorney is;
- Make it a condition of the enduring power of attorney that the donor, or someone other than the attorney, must receive regular copies of account statements from their financial institution;
- Make it a condition of the enduring power of attorney that the attorney consult with certain others before, for example, selling the donor's home. If the donor makes such a condition, it would be advisable to give the other people copies of the enduring power of attorney;
- Make it a condition of the enduring power of attorney that the donor's financial affairs be independently audited every year and that the donor or someone else receive copies of the audited accounts. There would be a cost involved in doing this;
- If the donor decides to have their enduring power of attorney come into force only in the event that they suffer any subsequent legal incapacity, they may wish to make it a condition of the enduring power of attorney that any legal incapacity must be certified by the donor's treating doctor for the time being.
The most important rule in selecting to whom to appoint as an attorney is - choose carefully. It should be someone trustworthy who can act in the donor's best interests at all times (see Safeguard your finances publication from Alliance for Prevention of Elder Abuse website).
A donor can nominate more than one donee if they want to. If the donor chooses to have two or more people listed as donees, they can specify that they act jointly (all donees must sign) or jointly and severally (either of the donees can sign independently of each other).
If the donor decides to have more than one donee, it is important that those people can work together.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.