Abuse of Powers of Attorney under the spotlight

In the face of increasing concerns about the abuse of Powers of Attorney, legal experts are asking for submissions as part of their review of existing South Australian law.

Powers of Attorney (POAs) – more formally called Enduring Powers of Attorney – enable an individual (known as a principal) to choose to appoint a trusted person (known as an attorney) who will make financial decisions on their behalf when they lose their ability to make these decisions themselves. They are a very important legal document which allow individuals to plan for their financial future.

To investigate whether the current POA laws are effective and working as intended, the independent South Australian Law Reform Institute (SALRI), based at the Adelaide Law School, is gathering the views of the South Australian community about how the law could be improved.

“Powers of Attorney provide a mechanism by which individuals can control their future and have been described as ‘an important expression of autonomy’,” says Dr David Plater, Deputy Director of SALRI. 

POAs aim to ensure that vulnerable people – often older people – are protected under law, and prevent financial abuse, an area that SALRI’s review hopes to strengthen, according to lead researcher Dr Sylvia Villios.

“Powers of Attorney are excellent tools for planning ahead for later life and their benefits outweigh the risks. But while originally designed with good intentions in mind, this law can now have unwelcome results in practice,” says Dr Villios.

“Instances arise where the principal lacks decision-making capacity, and the attorney abuses their role to receive an ‘early inheritance’ or otherwise misuses the principal’s funds. Examples include draining bank accounts or transferring the family home into the attorney’s own name.”

In most cases, the principal will lack the ability to monitor their attorney’s actions and even if they are able to, it is unlikely that they will report the abuse given their position of vulnerability. The principal will often be socially isolated and highly dependent on those around them. 

“The effect of financial impropriety on a principal’s financial security can be a permanent and life-threatening setback,” says Dr Villios.

Lead researchers will examine whether attorneys who abuse and misuse their powers in this manner face appropriate civil or criminal punishment that is sufficient to deter potential offenders.

By the end of 2020, SALRI will provide a report to the South Australian Government with recommendations about how law and practice surrounding EPAs can be improved. Any future changes then become decisions for the Government and Parliament to make.

People interested in making a submission for this report have until 4 September 2020 to give their feedback via the yourSAy website which also includes further background and fact sheets.