Enduring powers of attorney (EPOAs) are important tools that allow older people to choose the person (or persons) who will make financial decisions on their behalf should they lose decision-making capacity.
However, the Australian Law Reform Commission (ALRC) in its report titled ‘Elder Abuse – A National Legal Response’ recognised that EPOAs may facilitate abuse by the very person appointed by the older person to protect them.1
Evidence suggests that financial abuse is one of the most common forms of abuse of older Australians and that, in a significant number of cases, financial abuse is facilitated through misuse of a power of attorney.2
Where EPOAs are updated, amended or revoked, there is no legal requirement that these changes be communicated to a financial institution. In the absence of an accessible data source to establish whether an EPOA, as presented, is valid and has not been superseded, transactions which are technically no longer allowable may continue to be made, in the absence of any information indicating that a lodged EPOA ceases to have effect.
The ALRC recommended a number of reforms to address the financial abuse of older persons:
- adopting nationally consistent safeguards that seek to minimise the risk of abuse of an enduring document
- giving tribunals jurisdiction to award compensation when duties under an enduring document have been breached, and
- establishing a national online registration scheme for enduring documents.3
In 2020, Queensland Law Society contributed to a submission to the Department of the Attorney-General on the use of EPOAs, and the proposal to introduce a mandatory registration requirement.
Some benefits that may be associated with mandatory registration are:
- an information platform – allowing estate practitioners to access information which may assist in understanding of particular transactions carried out on behalf of a principal
- providing assistance where there are competing documents – the creation of a register offers an opportunity to clarify document priority in cases where multiple EPOAs exist across different jurisdictions
- identifying possible undue influence and capacity – it would raise suspicion if several EPOAs were registered for the same principal in a relatively short period of time
- ensuring participation and comprehensiveness – unless users can have relative certainty that all relevant EPOAs are contained within the register, its usefulness will be limited, and
- promoting legal assistance – many EPOAs are currently being completed without a solicitor’s help. Mandatory registration by a legal practitioner or other appropriately qualified person would facilitate a degree of oversight, which in turn would ensure that the registration process is undertaken by persons with specialised knowledge.
However, concerns about the usefulness of mandatory registration include:
- negligible impact on elder abuse reduction – much elder abuse arises from attorneys misusing powers properly granted to them, not because the document is fraudulent or improperly made. A register may have some benefit, but cannot eradicate certain abuses.
- cost deterrent – a register which relies upon legally or otherwise properly qualified persons to navigate the registration process and validate an EPOA will have costs associated with securing the necessary professional oversight. This may act as a deterrent to persons in preparing an EPOA, or where one has previously been made, a principal may be hesitant to update the document even when they should due to changed circumstances. And
- practical and legal hurdles – compliance with human rights instruments and legislation relevant to each jurisdiction, as well as overarching privacy concerns, must be addressed to ensure community confidence in the register and to encourage participation.
In April 2021, the Attorney-General’s Department announced that it would pursue a mandatory national registration scheme.4 It remains to be seen whether mandatory registration of EPOAs will reduce the prevalence of financial abuse against older Australians.
Brooke Thompson is a Policy Solicitor on the QLS legal policy team.