Abuse of Power of Attorney in New Zealand: A Growing Concern

Abuse of Power of Attorney in New Zealand: A Growing Concern

As the number of people in New Zealand requiring a Power of Attorney (POA) grows, so does the concern surrounding its potential abuse. A Power of Attorney is a legal document that allows someone to make decisions on behalf of another person, typically when that person is unable to manage their affairs due to illness or incapacity. However, like all powers, it comes with the risk of misuse. In this article, we will explore what constitutes the abuse of Power of Attorney in New Zealand, the signs to look out for, and the legal protections in place to prevent this issue.

What is a Power of Attorney?

A Power of Attorney (POA) is a legal arrangement that gives one person (the attorney) the authority to act on behalf of another (the donor) in making decisions about their property, finances, or personal matters. There are two main types of POA in New Zealand:

1. General Power of Attorney: Allows the attorney to manage the donor’s finances and legal matters.
2. Enduring Power of Attorney (EPA): This becomes effective if the donor becomes mentally incapacitated and is unable to make decisions for themselves.

While these documents are useful tools for managing affairs, they also create the potential for abuse, especially when the attorney acts in bad faith or without the donor’s best interests in mind.

Types of Abuse of Power of Attorney

Abuse of Power of Attorney can take many forms. Some of the most common types include:

1. Financial Exploitation: One of the most common forms of abuse is when the attorney uses the donor’s funds for their personal benefit. This can involve withdrawing money, selling assets, or mismanaging finances without proper authorization.
2. Emotional Manipulation: In some cases, the attorney may manipulate the donor emotionally, pressuring them into making decisions that benefit the attorney, rather than the donor.
3. Neglect: An attorney may fail to properly care for the donor’s needs, ignoring their wellbeing and making decisions that harm the donor’s health, lifestyle, or finances.
4. Misrepresentation: This occurs when the attorney makes false statements or misleads others about the donor’s wishes or condition, usually for their own personal gain.
5. Conflict of Interest: Sometimes, an attorney may act in a way that conflicts with the donor’s best interests, such as making decisions that benefit themselves or others rather than following the donor’s wishes.

Signs of Power of Attorney Abuse

Recognizing the signs of abuse is crucial for protecting the donor. Here are a few warning signs to watch out for:

• Unexplained financial transactions: Regular large withdrawals, transfers, or the sale of assets without proper explanation could be signs of financial exploitation.
• Isolation from family and friends: If the donor is being isolated from loved ones or is no longer communicating with others, this could be an indication that the attorney is exerting control.
• Sudden changes in the donor’s behavior: Unexplained confusion, anxiety, or reluctance to discuss personal matters may suggest that something is wrong.
• Unusual gifts or bequests: If the donor suddenly begins to give large gifts to the attorney or changes their will to benefit the attorney, this could be a red flag.

How to Protect Against Abuse

To prevent the abuse of Power of Attorney, there are several steps that both the donor and their loved ones can take:

1. Choose a trustworthy attorney: The most important step in avoiding POA abuse is selecting someone who is trustworthy, responsible, and understands the seriousness of their role.
2. Regular monitoring: Regularly review the decisions made by the attorney and monitor the financial transactions of the donor to ensure that nothing suspicious is occurring.
3. Legal safeguards: In New Zealand, an EPA is often subject to safeguards such as requiring the attorney to act in accordance with the donor’s wishes and to act in their best interest. If an attorney is found to be abusing their powers, legal action can be taken.
4. Consult a lawyer: If there are any concerns about the actions of an attorney, it is vital to consult a lawyer for advice. They can help navigate the legal processes, challenge the actions of the attorney, or even help revoke the power of attorney if necessary.

Legal Protections Against Abuse in New Zealand

New Zealand’s legal framework offers several protections for individuals who may be at risk of POA abuse:

• The Protection of Personal and Property Rights Act 1988: This act provides the framework for creating an EPA and outlines the responsibilities of attorneys. It also includes provisions for investigating allegations of abuse.
• The Family Court: If there are concerns about an attorney’s actions, the Family Court can intervene to review the situation and make necessary changes, including removing the attorney or appointing a new one.
• Criminal Law: In cases of severe abuse, criminal charges such as theft, fraud, or forgery can be pursued against the attorney.

What to Do if You Suspect Abuse

If you suspect that someone is abusing their Power of Attorney, it is crucial to act quickly. Some steps to take include:

1. Gather evidence: Keep track of any unusual activity or suspicious behavior, including financial transactions, changes in the donor’s health, or alterations to their will.
2. Contact the authorities: Report any concerns to the Office of the Public Guardian, a lawyer, or the Family Court. The authorities can investigate the matter and take appropriate legal action.
3. Seek legal advice: If you are concerned about the legality of the Power of Attorney or the actions of the attorney, it’s essential to seek legal advice to understand your options and how to proceed.

Conclusion

The abuse of Power of Attorney is a serious issue in New Zealand, but with proper safeguards and vigilance, it can be prevented. By understanding the types of abuse, recognizing the warning signs, and knowing the legal protections available, individuals can protect themselves and their loved ones from potential harm. Remember, the power granted through a POA should always be used responsibly, with the donor’s best interests in mind.

As someone with extensive knowledge in the banking and insurance sectors, it is vital to approach the issue of Power of Attorney with caution. If in doubt, always seek legal assistance to ensure that your affairs are managed safely and ethically.