An enduring power of attorney (EPA) can be a protective measure against elder abuse and potentially a tool that can be misused to facilitate financial exploitation. The link between an EPA and elder abuse lies in how the authority granted through an EPA can be wielded by the appointed attorney, who may have access to an older adult's finances and assets.
When properly utilised, an EPA allows an individual (the donor) to appoint a trusted person (the attorney) to make financial and legal decisions on their behalf if they become incapacitated or unable to make decisions independently. This can be a valuable tool for ensuring the donor's affairs are managed according to their wishes.
However, if the attorney appointed under the EPA acts dishonestly, negligently, or with ill intent, it could lead to elder financial abuse. Here are a few ways in which an enduring power of attorney can be linked to elder abuse:
Exploitation by the attorney
The attorney may misuse their authority to siphon off funds, manipulate financial transactions, or transfer assets for personal gain, taking advantage of the donor's vulnerability or lack of capacity to understand their actions.
Coercion or undue influence
In some cases, the attorney may exert undue influence or pressure on the donor to create or modify the EPA in their favour. This can lead to the donor being manipulated into granting significant powers to the attorney, which can then be misused for financial exploitation.
Negligence or mismanagement
Even without malicious intent, an attorney who lacks the necessary skills or fails to act in the donor’s best interests can still cause harm. Poor financial management, neglecting the donor's needs, or making reckless investment decisions can result in financial losses or a diminished quality of life for the older adult.
To minimise the risk of an enduring power of attorney-related elder abuse, it is essential to take certain precautions:
Choose a trusted attorney
Select someone with a strong integrity, responsibility, and competence track record. It is advisable to appoint an attorney who understands and respects the donor's wishes and values.
Appoint joint 2 attorneys
The donor can consider appointing 2 joint attorneys, requiring them to act jointly and make decisions by consensus. This means that both appointed attorneys must agree on financial decisions, reducing the risk of unilateral abuse or exploitation.
Seek legal advice
Consulting with a lawyer experienced in estate planning can help ensure that the EPA document is appropriately drafted, reflecting the donor's intentions while incorporating safeguards against abuse.
Regular monitoring and communication
Maintaining open lines of communication with the attorney and monitoring financial transactions can help detect signs of abuse or misuse. Regularly reviewing financial statements and seeking the advice of a trusted financial advisor can provide additional oversight.
Appoint a professional or institutional attorney
Instead of selecting a family member or friend as the attorney, the donor may choose to appoint a professional attorney, such as a solicitor or accountant, or designate a reputable institution, such as a trust company, to act on their behalf. Professional attorneys are typically bound by ethical and legal obligations, which can provide an additional layer of protection against abuse.
Regularly review and update the EPA
The donor needs to review the power of attorney document periodically, especially if there are changes in their circumstances, relationships, or financial situation. By keeping the document current, the donor can ensure that it accurately reflects their wishes and that the appointed attorney remains appropriate for the role.
By taking these precautions and remaining vigilant, the risk of an enduring power of attorney-related elder abuse can be minimised, allowing the donor to benefit from the intended protection and support while safeguarding their financial well-being.
If you would like to find out more, you can call Crystal Lawyers on 04211 45637.