A power of attorney has the potential to be very dangerous in the wrong hands so clearly the best safeguard is to choose a donee who is very trustworthy. Although it is a criminal offence to misuse a power of attorney, for example to take money or to not use money in the person's best interest, it may be difficult to detect the crime. With an enduring power of attorney, the donor may be incapacitated and may not be capable of discovering the crime. There is no official checking done to ensure that donees are doing their job properly. If you give a power of attorney with no conditions, the donee is able to sell, mortgage or give away all that you own.
The following suggestions may help you safeguard your interests.
- Let at least one other person know who your attorney is.
- You may wish to make it a condition of your enduring power of attorney that you, or someone other than your attorney, must receive regular copies of your account statements from your financial institution.
- You may wish to make it a condition of your enduring power of attorney that your attorney consult with certain others before, for example, selling your home. If you do this, it would be advisable to give the other people copies of your enduring power of attorney.
- You may wish to make it a condition of your enduring power of attorney that your affairs be independently audited every year and that you or someone else receive copies of the audited accounts. There would be a cost involved in doing this.
- If you decide to have your enduring power of attorney come into force only in the event that you suffer any subsequent legal incapacity, you may wish to make it a condition of your enduring power of attorney that any legal incapacity must be certified by your treating doctor for the time being.
The most important rule in selecting to whom you wish to donate your power of attorney is - choose carefully. It should be someone you can trust to act in your best interests at all times (see Safeguard your finances publication from Alliance for Prevention of Elder Abuse website).
You can nominate more than one donee if you want to. If you choose to have two or more people, you can specify that they act jointly (all donees must sign) or jointly and severally (either of the donees can sign independently of each other).
If you decide to have more than one donee, make sure you choose people you believe can work together.
The content of the Law Handbook is made available as a public service for information purposes only and should not be relied upon as a substitute for legal advice. See Disclaimer for details. For free and confidential legal advice in South Australia call 1300 366 424.