Say “estate planning” and most people think of a Will. But while a Will is an extremely important document, the value and importance of having an Enduring Power of Attorney as part of an estate plan should not be overlooked, says Anna Hacker, Wills & Estates Accredited Specialist at Australian Unity Trustees.
“An Enduring Power of Attorney is the tool that can help protect people – particularly anyone who is vulnerable because of age or health problems – from those who are unscrupulous, greedy or neglectful,” Ms Hacker says.
She points out that it is vital to choose the right person for the role.
“We always advise people to carefully consider who they can trust, and not just to choose their oldest child, for example.
“It must be someone that you can rely on to do the right thing by you, make decisions that are in your best interests, and properly meet their obligations and responsibilities. There are specific guidelines and regulations for people acting as Enduring Power of Attorney, and if they don’t meet them then they could be acting illegally.”
Ms Hacker said that while no-one would like to believe it could happen to them, there are many examples of adult children, or other family members or neighbours, acting dishonestly and taking advantage of elderly people.
“Elder abuse is becoming recognised as a serious issue in Australia, and having an Enduring Power of Attorney should be on everyone’s radar.
“It can happen to anyone, regardless of how much wealth they have, how strong they believe their family ties are, or how capable they think they or their nominated attorneys are.
“We have seen examples of sons or daughters taking their mother into the bank and getting them to withdraw large sums of money, and then hand it over for their own personal use.
“Having an Enduring Power of Attorney would add an extra layer of protection, as the attorney is then the only person the bank is authorised to deal with. In addition, they would be monitoring bank statements and would be alert to any unauthorised or unusual activity.
“In other cases, we have seen adult children forcing their parents to take a mortgage out on their home and then pocketing the money, and the other siblings only finding out when the house needs to be sold to pay for aged care accommodation, or when their parent passes away.
“To most of us, such stories seem unbelievable, but they are happening and, sadly, they are probably happening more often than we realise. Many elderly parents are either too ashamed to admit what their children are doing, or are cognitively impaired and unable to understand that they are being left financially destitute.
“Again, a properly chosen Attorney is the best way to protect yourself from this kind of situation.”
Ms Hacker says that unfortunately it can be quite a complicated area, as Enduring Powers of Attorney have slight nuanced differences from state to state.
Generally speaking, there are three different types of power of attorney:
Ms Hacker says an Enduring Power of Attorney is an important consideration for everyone, not just people who are older or with a known illness that may affect mental capacity.
“For example, if you have an accident or a sudden illness that causes you to lose capacity to manage your financial affairs, no one will be able to access your assets on your behalf, such as your bank account or superannuation, unless you have an Enduring Power of Attorney in place and have appointed someone who will consider that your needs and wishes are taken into consideration as financial decisions are made.
“Your investments may require an important action to be taken, but you might not be in a position to do so.
“As long as the right person is chosen, having an Enduring Power of Attorney can make a huge difference to your security, quality of life and care,” Ms Hacker says.
Australian Unity Trustees was established in 2017 to provide a range of trustee services to all Australians including: estate planning; executor appointments and estate administration; financial attorney; financial and legal administration; and the establishment and management of personal, native title, community and charitable trusts. It is the first traditional trustee financial services licence issued since the establishment of a national licensing framework for traditional trustee activities.