Suspecting that someone is misusing an enduring power of attorney can be very distressing, particularly when it involves a family member. Knowing the warning signs of elder financial abuse and understanding what legal options are available can make all the difference in protecting a vulnerable loved one. This article explains some of the common signs of misuse of an enduring power of attorney and the practical steps you can take.
What is an Enduring Power of Attorney (EPOA)?
An EPOA is a legal document that allows a person (the principal) to appoint someone else (the attorney) to make financial and legal decisions on their behalf. Depending on its terms and the law applying to the relevant State or Territory, an attorney may operate bank accounts, pay expenses, manage investments, sign documents and buy or sell property.
These powers commence when the principal loses capacity. That makes an EPOA an important protective document, but also a powerful one. If the wrong person is appointed, misuse may occur when the principal is no longer able to scrutinise transactions or revoke the appointment.
Life can be unpredictable, appointing someone you trust to manage your financial and legal affairs in the event of incapacity can provide peace of mind no matter your circumstances, age, or health. We can help you put a comprehensive EPOA in place, call us on 1300 654 590 or email us.
What obligations does an attorney have?
An attorney must act in accordance with the power of attorney and for the benefit of the principal. They should:
- keep the principal’s money separate from their own;
- maintain proper accounts and records;
- avoid conflicts of interest;
- not use the principal’s assets for their own purposes; and
- not make gifts or confer benefits unless properly authorised.
Importantly, even if the document gives the attorney broad powers, the attorney may still breach their fiduciary duties by exercising those powers for an improper purpose.
What does misuse look like?
Misuse is not always obvious. Financial abuse can occur gradually, and some transactions can initially appear legitimate. However, the Law Society of New South Wales has identified common situations that raise red flags, including, the attorney:
- Making unexplained withdrawals or transfers from bank accounts;
- Making large or unusual payments to the attorney or their family members;
- Giving interest free loans or gifts to the attorney or their family members;
- Selling or transferring property for little or no consideration;
- Changing bank accounts or financial arrangements that the principal did not request;
- Using the principal’s money to fund their own expenses;
- Entering financial transactions that cannot readily be explained; and
- Failing to meet the principal’s expenses despite the principal having sufficient assets.
These scenarios can often be coupled with the attorney:
- Refusing to explain why they need the EPOA document;
- Becoming combative if their intentions are questioned; and
- Refusing to provide reasonable information about financial transactions;
Certain behavioural changes in the elderly person can also be indicative of elder abuse. Family members and friends may notice that a loved one has become increasingly isolated, nervous, anxious, or lacking in confidence.
The decision in Aviva Cohen by her tutor NSW Trustee and Guardian v Shalom Cohen [2016] NSWSC 336 provides rather a sad illustration of abuse.
Mrs Cohen had appointed her son as her attorney. After she moved into residential aged care, he used the power of attorney to transfer her Lane Cove property, her only substantial asset, to himself for $1. He subsequently resigned as her attorney.
Mrs Cohen’s aged-care fees were left unpaid. It was the manager of her nursing home, rather than a family member, who applied to the New South Wales Civil and Administrative Tribunal (NCAT) for a financial management order. NCAT appointed NSW Trustee and Guardian to manage Mrs Cohen’s financial affairs.
When NSW Trustee and Guardian examined her finances, it discovered the property transfer and commenced Supreme Court proceedings. The Court found that the son had abused his authority and breached his fiduciary duties. He was ordered to transfer the property back to his mother.
The case demonstrates the complementary roles of NCAT (or equivalent tribunals in other states and territories) and the Court. NCAT put an independent financial manager in place. That manager was then able to investigate the transactions and bring proceedings to recover the property.
Can an estate recover assets after the principal has died?
Misuse is sometimes not discovered until after the principal’s death.
In Grant v Grant (No 2) [2020] NSWSC 1288, a daughter acting as her father’s attorney transferred $134,700 from his bank account and transferred his property to her own daughter. The transactions left her father unable to meet his nursing-home expenses.
After his death, the executor of his estate brought proceedings to recover the assets. The attorney was ordered to repay the money with interest, and her daughter was ordered to transfer the property back.
The case shows that an attorney may be personally liable to restore money improperly taken; property may be recovered from a third-party recipient involved in the breach; and the principal’s death does not necessarily prevent the executor from pursuing earlier transactions.
What if the attorney tries to change the principal’s intended estate?
In Watson v Watson [2002] NSWSC 919, a father appointed one of his sons as attorney shortly before making a Will that divided his estate among his children. The son used the power to withdraw $55,000 and transfer the family home to himself.
The other children brought proceedings after their father’s death. The Court found that the son had used his position to obtain a personal benefit inconsistent with his fiduciary obligations. The transactions were set aside.
Although an attorney is not generally required to preserve every asset for the beneficiaries of the principal’s Will, they cannot treat an anticipated inheritance as if it already belongs to them. The principal’s assets must continue to be managed for the principal’s benefit during their lifetime.
How can the Administrative Tribunal help?
Please note each State and Territory has an equivalent tribunal to NCAT that can take similar action in relation to a vulnerable persons financial and/or health matters, this article uses NCAT as an example. If you are in any other state or territory we can advise you on the equivalent tribunal’s capabilities.
If the principal still has capacity, they may revoke the power of attorney and make a new appointment. If the principal has lost capacity, a family member, friend or another person with a genuine concern for their welfare may apply to NCAT’s Guardianship Division. The applicant does not have to be a beneficiary of the principal’s estate.
NCAT can review the power of attorney, require accounts and records, vary or revoke the appointment, remove the attorney, appoint a substitute or make a financial management order.
NCAT can therefore be an important first step in stopping further transactions and placing the person’s finances under independent management. Court proceedings may then be required to set aside transactions, recover property or obtain compensation.
NCAT: Review of an Enduring Power of Attorney
NSW Ageing and Disability Abuse Helpline
What should you do if you are concerned?
If you have seen any of the situations mentioned in this article happen to someone you know, or even if you have a feeling something isn’t quite right, here is what you can do:
- Document what you have observed. Recording transactions or conduct that concern you, and where appropriate, retain documents such as correspondence or invoices.
- Obtain legal advice. A lawyers can help assess whether the circumstances are genuinely concerning, identify what information may be relevant and advise on options available to protect the elderly person’s interests.
- Concerns about abuse, neglect or exploitation can also be reported to Ageing and Disability Abuse Helplines, we have left the details for the national helplines below. Suspected theft, fraud or forgery may warrant a report to police.
- National elder abuse helpline (this will redirect you to your state’s dedicated line.)
- National disability abuse and neglect helpline
Protecting a vulnerable loved one
An Enduring Power of Attorney is a very powerful document that is built on trust. When it is being misused, the consequences can affect not only a person’s finances but also their independence and wellbeing.
If you are concerned that an attorney may be misusing their authority, you do not need to navigate this situation alone. We can help you assess the circumstances, understand your options and guide you through the appropriate steps. Call us on 1300 654 590 or email us.
The information contained in this post is current at the date of editing – 26 August 2026.
