industry & policy
Policing powers of attorney
It is time for a national
POA register to protect
older Australians from
economic crime.
While providing a disincentive to problematic attorneys who may
consider breaching their duties, such measures are only brought to
bear after the horse has bolted and do not stand as a pre-emptive
strike against improper use by attorneys of their appointed powers.
By David Davis
TYPES OF ECONOMIC CRIME
E
nduring powers of attorney (POA) allow mentally capable
adults (the principals) to authorise one or more persons
(their attorneys) to do anything on their behalf that they can
lawfully authorise attorneys to do. When principals lose capacity,
their appointed attorneys can transfer their funds and property
and make legal and economic decisions on their behalf.
Attorneys are generally agents for the principals, and are also
seen as trustees for their principals’ assets. Attorneys have duties to
act in the best interests of their principals, and breach their duties
when they apply the principals’ assets for their own personal gain.
The effect of enduring powers of attorney ceases when the
principal dies, as the principal’s will (if there is one) or the laws of
intestacy (if there is no will) take effect.
BACKGROUND
We live in an age where trust in our public and private institutions
is being challenged, when institutions fall short of expected
standards of conduct on an almost daily basis.
Unfortunately, individuals appointed as attorneys under POAs
are no less liable to the same shortcomings.
Despite recent POA changes increasing the penalties (financial
as well as criminal) that the Victorian Civil and Administrative
Tribunal (VCAT) can impose on attorneys who breach their
obligations, such matters are still determined after the fact
when the breaches have already occurred, and only then when
the tribunal is satisfied that the breaches have been proved.
16 agedcareinsite.com.au
There are three types of economic crime committed against the
elderly: fraud, financial abuse, and POA and guardianship matters.
Sadly, such considerations are not recent developments. The key
element in all cases is the intentional misuse of funds by attorneys
for their own benefit in conflict with their duties as fiduciaries. 1
An increase in POA-related fraud is likely due to social factors
triggered by delayed inheritances. We live longer than ever before,
and inheritances that children previously could expect to receive in
their 40s, 50s or even 60s are now being delayed for decades.
Financial victimisation can devastate older people: 2
• Comfortable, independent lifestyles can collapse.
• There may be no time to recover financially, resulting in
increased reliance on Centrelink benefits.
• Fear, a sense of betrayal, depression, guilt, shame, denial, anger
and a lack of trust can give rise to acute and chronic anxiety and
physical illness.
These factors can cause permanent and sometimes life-
threatening setbacks. Often victims do not want to “cause a fuss”
to avoid alienating family members, but then they risk becoming
pawns in a family game of emotional blackmail. They may feel
that reporting the crime does no good, or they “don’t want to
bother the police”. Ultimately, it may be that their greatest fea