Tuesday 17 April 2012

Fraudulent use of Power of attorney

I spent a couple of hours in the Victorian Civil and Administrative Tribunal yesterday. I acted for the Son of an elderly woman with advanced dementia, caused by Alzheimer's disease. Seven years ago, prior to her diagnosis, the clients Mother had given sole and unlimited power of attorney to her Daughter.
Unfortunately, it now comes to light that the Daughter had already developed a serious gambling addiction at the time she was made sole attorney of her Mothers affairs.
The only reason her Brother and Sister became concerned and suspicious was because, having depleted her Mothers accounts to the tune of almost 1 million dollars, the gambling addict, began to borrow money from her siblings and was unable to repay it. Questions got asked, and became progressively more and more pressing until the gambling addict finally broke down and spilled the whole story.
There is little chance of recovering any of the money, so Mother is now completely broke. At least she is blissfully unaware.
Fees owing to the nursing home, where the now protected person is a long term resident, total almost $19,000.00 and it appears that she may have to be moved somewhere cheaper and less suited to her needs.
Orders were made at VCAT revoking the Enduring Power of Attorney and appointing my client as Administrator of the estate. All far too late though, as the horse has bolted and the chances of recovering enough funds to keep Mom comfortable are minimal.
How could all this have been avoided ?
Firstly, Mom should not have appointed a single person as sole attorney. Where two or more people have to sign jointly, fraud is far less likely to occur and is more likely to be discovered early.
Secondly, and in any event, the document should have contained a positive obligation on the person being granted power of attorney to provide a full annual accounting of her mothers affairs to her siblings.
Perhaps my client should have shown more interest earlier. Even if he had, it is quite probable that he would have been unable to obtain any clear and accurate accounting of his Mothers affairs, from his Sister, without provision for it being clearly spelt out and provided for in the Power of Attorney document.
If you have any cause for concern as to the manner in which someones affairs are being conducted, ask the hard questions early. If you don't get satisfactory answers you may wish to explore the possibility of an application to VCAT to cancel the Power of Attorney and have someone else appointed.

1 comment:

  1. Great blog about this topic Hal, not enough families take these sorts of things into account.

    All the best, Helene Malmsio

    ReplyDelete