Enduring powers of attorney (EPOA) are a key estate planning tool, but can be used as a means for elder abuse, so national rules should be put in place regarding their use and who can witness their implementation, according to the Financial Advice Association of Australia (FAAA).
In feedback on a consultation paper about financial EPOAs released by the Attorney-General’s Department, the FAAA stated: “While it is vital to ensure the laws protect the interests of the principal, the requirements should not create an undue burden on Australians that makes it too difficult for the principal and attorney to establish an EPOA.
“Improving the consistency of the laws governing EPOAs across Australia is a vital step in better enabling decision-making for those with reduced capacity and also for strengthening protections in a balanced manner to reduce the risk of elder abuse.”
As such, the advice body called for a national package of laws that include defining who should be permitted to witness or be an attorney under an EPOA, the obligations and training required to act as an authorised witness or attorney and how EPOAs could be verified.
In terms of who can be an attorney or a witness to an EPOA, the FAAA submission suggested both should be required to make a self-declaration to a fit and proper person test, and people who could act as a witness would be prescribed under law to exclude minors, a party to an EPOA or a close relative of a party to the EPOA.
Attorneys should also be required to make a declaration including a requirement to agree to act in the best interests of the principal or to prioritise the interests of the principal over their own or related parties’ interests, and they should report to the principal or relevant authorities if they are no longer able to act as an attorney.
Adding to this, the FAAA also called for witnesses to provide an assessment of those to be appointed as the attorney.
“This should focus on the intent of the attorney(s) to do the right thing by the principal – that is, to act in the principal’s best interest, over their own interests – and the fitness and propriety of the attorney(s),” the submission noted.
The FAAA also pointed out with the absence of a national register of EPOAs, there was a large variation in how financial institutions were verifying and accepting them, leading to attorneys not being able to pay bills under valid EPOAs.
“A national register of EPOAs, backed by nationally consistent laws and guidelines, would overcome this issue. The register should enable all financial institutions to check the validity and currency of the EPOA and the identity, eligibility, fitness and propriety of the attorney,” it said.
