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Misuse of Enduring Powers of Attorney

13 Jul 2018

As specialists in the aged care industry, we are regularly approached by aged care providers who are concerned about an attorney misusing their powers (granted under an Enduring Power of Attorney/EPoA) and are unsure what to do.

Deciding who to appoint as an attorney is one of the most significant decisions a person can make, as an attorney will be using their powers to make decisions/access funds on a person’s behalf while they are still alive. Although this article relates to EPoAs and the appointment of guardians/administrators in Queensland, we also have experience in other jurisdictions and can assist you with the process in other States and Territories as well.

Attorney misuse of power

Although an attorney is required to act in the best interests of the principal, sometimes an attorney may ignore this obligation and make inappropriate financial, personal or health decisions in breach of their duty to act honestly and with reasonable diligence.

Often in cases of financial abuse, by the time the misuse of power is noticed it is too late to recover the funds that have been spent or misappropriated.

While attorneys can commit other forms of abuse of the principal (other than financial), financial abuse seems to be more commonly noticed in aged care facilities. The following are some examples of financial abuse in an aged care environment:

  • the costs of the resident’s care are not being paid;
  • the attorney appears to be gifting assets of the resident to themselves or others; or
  • the attorney appears to be using the resident’s pension or other payments for themselves.

Is it our responsibility to do something?

Although aged care providers in Queensland are not required under any legislation to report suspected financial abuse, failing to do so may have significant legal consequences because a duty of care is owed to the residents.

While aged care providers are not responsible for investigating or ensuring that attorneys are acting properly, where there is a clear breach of their statutory obligations, the aged care provider may be required to act to comply with their duty of care to the resident. For instance, where an attorney is misappropriating a resident’s assets and the aged care provider is aware, but chooses not to act, it may be breaching its duty of care obligations.

Where an aged care provider does not take any action in these circumstances (such as reporting the conduct to the Public Guardian), it may also be liable for a claim in negligence. However, any risk to the facility will always depend on the circumstances of the matter.

What can we do?

Aside from making a confidential complaint to the Office of the Public Guardian, which we have detailed previously, aged care providers can file an application in the Queensland Civil and Administrative Tribunal guardianship and/or administration division seeking that a guardian (who deals with personal/health decisions) and/or administrator (who deals with financial decisions) be appointed for the resident. In order to do this, it must be established that the adult has an impaired decision-making capacity. Otherwise QCAT will not intervene.

What is impaired decision-making capacity?

The most common and easily identifiable example of an impaired decision-making capacity (IDMC) is where the resident has been diagnosed with advanced levels of dementia or Alzheimers. However, an IDMC does not always stem from a diagnosable illness. QCAT will require evidence from a suitably qualified professional (such as a doctor) to support that the person:

  • cannot understand the nature and effect of decisions about the matter;
  • is unable to freely and voluntarily make a decision; and
  • cannot communicate the decision in some way.

Where a decision needs to be made and the person cannot carry out a part of the above process, it is likely they will be considered to have an IDMC.  

Appointing a guardian and/or administrator

Once QCAT is satisfied the resident has an IDMC, they will consider whether the circumstances establish a need for a guardian or an administrator to be appointed.

As part of the application process, the aged care provider can request that another family member/spouse of the resident be appointed as the guardian and/or administrator. Alternatively, if there is no appropriate family member, the Public Guardian or Public Trustee may be appointed.

How can we help?

We can help if you are concerned about an attorney acting inappropriately. In these circumstances, it is crucial to take the correct steps to protect the interests of your organization. The best strategy is to be prepared and Hynes Legal can assist you in preventing and dealing with these issues.

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