That’s according to Australian Unity Trustees’ wills and estates accredited specialist Anna Hacker.
“An enduring power of attorney is the tool that can help protect people – particularly anyone who is vulnerable because of age or health problems – from those who are unscrupulous, greedy or neglectful,” Ms Hacker said.
“Elder abuse is becoming recognised as a serious issue in Australia, and having an enduring power of attorney should be on everyone’s radar.
“It [elder abuse] can happen to anyone, regardless of how much wealth they have, how strong they believe their family ties are, or how capable they think they or their nominated attorneys are,” she added, explaining that the choice of who to appoint as enduring power of attorney is a critical decision.
Children can be predators
The estate planner has seen older Australians taken advantage of by their children, who may manipulate their parents into taking a mortgage out on their home or withdraw large sums of money before pocketing it themselves.
She said often it’s only discovered by others when the house needs to be sold to cover aged care fees, or upon the death of a parent.
“To most of us, such stories seem unbelievable, but they are happening and, sadly, they are probably happening more often than we realise. Many elderly parents are either too ashamed to admit what their children are doing, or are cognitively impaired and unable to understand that they are being left financially destitute,” Ms Hacker said.
“Again, a properly chosen attorney is the best way to protect yourself from this kind of situation.”
How does it work?
People acting as enduring power of attorney are required to make decisions in the best interests of the appointer.
However, rules around enduring powers of attorney can differ between states. While a number of groups are currently lobbying for a unified set of rules, Ms Hacker explained that there are generally three different types.
A general power of attorney is someone who is appointed to make legal and financial decisions. This person is often appointed for a defined period of time, like if you’re going overseas for a long period of time and will end as defined, or if the appointer loses capacity.
An enduring power of attorney grants decision-making power to the appointed after loss of capacity.
This means those developing or living with dementia would likely benefit from appointing an enduring power of attorney.
The third type is the granting of power to make medical decisions, however the requirements for this differ between states. This power generally allows someone to make medical decisions should the appointer lose capacity.
It’s not just older Australians who should be thinking about this
To Ms Hacker, all Australians should be thinking about who they would appoint as enduring power of attorney.
She explained, “If you have an accident or a sudden illness that causes you to lose capacity to manage your financial affairs, no one will be able to access your assets on your behalf, such as your bank account or superannuation, unless you have an enduring power of attorney in place and have appointed someone who will consider that your needs and wishes are taken into consideration as financial decisions are made.
“Your investments may require an important action to be taken, but you might not be in a position to do so.”
She concluded, “As long as the right person is chosen, having an enduring power of attorney can make a huge difference to your security, quality of life and care.”