In New Zealand, a power of attorney is a legal document that gives someone the authority to act on behalf of another person, known as the “donor,” in various matters such as financial, legal, and personal decisions. While it is a useful tool for people who may need help managing their affairs, it also comes with the risk of abuse. Abuse of power of attorney is a serious issue, and understanding the potential dangers, as well as how to protect yourself, is crucial. In this article, we’ll explore what the abuse of power of attorney is, how it can happen, and the steps to prevent it.
What is Power of Attorney?
Power of attorney (POA) is a legal document that allows an individual (the donor) to give another person (the attorney) the legal authority to make decisions on their behalf. This can include managing their finances, healthcare, or legal matters. There are two main types of power of attorney in New Zealand:
- Enduring Power of Attorney (EPA): This type of POA is used when a person becomes mentally incapable of making decisions, such as in cases of dementia or other cognitive impairments.
- General Power of Attorney (GPA): This type is often used for a specific purpose, such as managing financial matters when the donor is unavailable.
How Does Abuse of Power of Attorney Happen?
Abuse of power of attorney occurs when the attorney takes advantage of the authority granted to them by the donor in ways that are not in the donor’s best interests. This abuse can take many forms, including:
- Financial Exploitation: The attorney may misuse the donor’s funds for personal gain, such as withdrawing money from the donor’s bank accounts without permission.
- Emotional Manipulation: An attorney might force or pressure the donor into making decisions that they don’t want to make.
- Neglect: The attorney may fail to carry out their responsibilities properly, leading to the donor being neglected or deprived of necessary care.
- Misuse of Health Decisions: An attorney may make healthcare decisions that are not in line with the donor’s wishes or best interests.
Abuse can happen gradually, often when the attorney develops a sense of entitlement or when there is little oversight from others.
Signs of Abuse of Power of Attorney
Recognizing the signs of abuse can help prevent further harm. Some common warning signs include:
- Sudden changes in financial behavior: Unexplained withdrawals or transfers of money from the donor’s accounts.
- Isolation of the donor: If the attorney limits the donor’s contact with family or friends, it may indicate that something is wrong.
- Inconsistent or questionable decision-making: The attorney may make decisions that are not in the donor’s best interests or contradict their known wishes.
- Unexplained changes in the donor’s will or estate plans: If the donor’s will is changed suddenly or under suspicious circumstances, it may be a red flag.
Preventing Abuse of Power of Attorney in New Zealand
To prevent the abuse of power of attorney, it is essential to take proactive steps. Here are some measures you can take to protect yourself:
- Choose a Trusted Attorney: When assigning someone as your attorney, it is vital to choose someone you trust completely. This person should have your best interests at heart and should be responsible and trustworthy.
- Keep Regular Oversight: Make sure that there are checks in place to monitor how your attorney is using their power. For example, you can involve family members or professionals to review your financial records regularly.
- Specify Limits in the Agreement: In the power of attorney document, make sure to specify the exact powers and limits of what your attorney can do. This can help prevent overreach and misuse.
- Appoint Multiple Attorneys: If you are concerned about the potential for abuse, consider appointing more than one attorney, such as a primary attorney and a backup attorney. This ensures that someone else can step in if there is any sign of misuse.
- Regularly Review the Power of Attorney: Review the power of attorney document periodically to ensure it still reflects your wishes and that your attorney is acting in your best interests.
- Seek Legal Advice: Before creating a power of attorney, it is wise to seek legal advice to fully understand the implications of the document and the powers you are granting.
- Report Abuse: If you suspect that the power of attorney is being abused, it is important to report it immediately. In New Zealand, the Office of the Public Trustee can help investigate cases of abuse and ensure that the donor’s rights are protected.
Legal Protections Against Abuse
In New Zealand, there are legal protections in place to prevent the abuse of power of attorney. For example, the Protection of Personal and Property Rights Act 1988 sets out the rules and procedures for creating enduring powers of attorney. This law ensures that attorneys have a legal obligation to act in the best interests of the donor and to avoid conflicts of interest.
If abuse is suspected, the victim can apply to the Family Court to have the attorney removed or to challenge the decisions made by the attorney. The court can appoint a new attorney or take other action to protect the donor’s rights.
Conclusion
While a power of attorney is a useful tool for managing affairs, it can be easily abused if not handled correctly. By understanding the risks, choosing a trusted attorney, and taking preventive measures, you can safeguard yourself against potential abuse. If you are concerned about the misuse of power of attorney, don’t hesitate to seek legal advice and take action. Protecting your interests is crucial to ensuring that your decisions and assets are handled in the way you intend.