Documentation, Estate Planning

EPOA disputes have common causes

EPOA disputes

Disputes around an enduring power of attorney (EPOA) usually have three causes and advisers can play a role in helping clients resolve them.

Disputes related to an enduring power of attorney (EPOA) usually centre on concerns regarding the validity of the attorney or their actions, according to an estate planning lawyer.

Cooper Grace Ward partner Hayley Mitchell said by identifying what is going on, advisers could also direct their clients in seeking help or redress through the courts or civil and administrative tribunals, and there were three usual reasons for a dispute around an EPOA.

“The first is about the validity of an EPOA and a client might be concerned about whether mum or dad had capacity at the time they made the power of attorney or if they have been unduly influenced to appoint someone as their attorney. Commonly you might see these in a lead-up to a will dispute that’s going to happen after death as well,” Mitchell said at the firm’s recent Annual Adviser Conference.

She added the second cause of a dispute was where there was suspicion or evidence in relation to an attorney misappropriating money, which often stems from a sense of entitlement.

“One child feels the other children in the family have already benefited more from mum and dad so they help themselves and make that adjustment from mum and dad’s assets now, rather than wait until they die,” she said.

“Another reason why issues arise is a sense of lack of control or lack of oversight and they may be due to some jealousy between siblings or a controlling nature within a family so they get suspicious about what the attorney is doing on behalf of mum and dad.

“The attorney might not be doing anything wrong, but just because there is that lack of control with the other siblings, they want to start to make some inquiries.”

She noted these issues often occur in combination and advisers dealing with client concerns need to identify what issue has arisen and what their client hopes can be achieved by making inquiries or a court application.

“Are they looking at getting a declaration about the validity of a document? Are they trying to recover money that’s been gifted?” she said.

“Are they simply seeking an accounting record from the attorney, who has an obligation to keep a record of what they are doing on behalf of mum and dad?

“It might be as simple as providing those records or having an independent person appointed to manage the finances.

“Think about whether it can be resolved within the families, so that might be giving guidance to your client about how to approach it within the family or might be trying to resolve things through correspondence on lawyer’s letterhead.

“If it is quite a serious matter, then it’s likely you’re going to need to look at whether a court or tribunal needs to be engaged.”

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