Most of us have heard stories about misconduct by attorneys who have taken funds or gained some advantage from an elderly person who gave them their Enduring Power of Attorney (\u201cEPA<\/b>\u201d). The attorney is usually a child or a trusted friend of the elderly person. Elder abuse is receiving a lot of coverage in the media these days.<\/p>\n
Sometimes the transgression seems innocent. Many transgressions occur as a result of the attorneys\u2019 ignorance of their responsibilities. The law in relation to attorneys\u2019 conduct is complex. Let\u2019s take a typical scenario which is loosely based on a real case of misconduct by attorneys.<\/p>\n
The father appointed his son as his attorney. The father was about to move into a nursing home because he had been diagnosed with Alzheimer\u2019s disease and he had become quite forgetful. The son as attorney for his father sold his father\u2019s holiday house at Caloundra to his daughter for $25,000 less than its market value. The house was dilapidated and could not be rented out. The attorney\u2019s sister found out and alerted the Office of the Public Guardian (\u201cthe OPG<\/b>\u201d).<\/p>\n
The OPG has wide investigative powers and often calls attorneys to account for their actions where allegations of misconduct by attorneys are made. Court action was taken against the attorney to recover the $25,000 loss that the father had suffered. The son had not intended to deceive his father; he thought he was doing the right thing. In fact, the son had:<\/p>\n
The case went to trial. After considering the evidence about the value of the house, the judge found that the true value of the house was $100,000. The son argued that the reduced value of $75,000 was because it would have cost about $25,000 to bring the house to a \u2018saleable condition\u2019. He said that he therefore sold the property to his daughter for that value. The son also argued that he had saved his father $2,500 in real estate agent\u2019s commission by selling the house to his daughter.<\/p>\n
The judge ordered the son to pay the $25,000 difference between the realistic valuation of the house at $100,000 and the price the house was sold to his daughter.<\/p>\n
What could the attorney have done to save the discomfort of the OPG investigation and the court case that followed?<\/p>\n
A \u2018conflict transaction\u2019 is any transaction an attorney enters into on behalf of his principal in which the attorney, a relation, a business associate or close friend of the attorney stands to benefit from the transaction.<\/p>\n
Where the principal has the mental capacity to agree to the conflict transaction, it is always a good idea to have a written agreement signed by the principal in the presence of an independent witness. A written agreement that sets out the exact terms of the transaction, and is signed by the principal and witnessed by an independent witness, will protect the attorney. The independent witness will be able to vouch that the principal understood the transaction and that there was no pressure from the attorney to agree to it. The agreement should be made before the transaction is conducted.<\/p>\n
However, there is currently legislation before parliament that will enable a principal to retrospectively agree to a conflict transaction, provided the principal has the mental capacity to do so. Keep an eye out for this change and ask your lawyer if you find yourself in this situation.<\/p>\n
The difficulty arises where there is some doubt about the principal\u2019s mental capacity to agree to the transaction. If the attorney suspects that the principal does not have the mental capacity to agree to a transaction, the attorney can (and should) apply to the Queensland Civil and Administrative Tribunal (\u201cQCAT<\/b>\u201d) for its approval of the transaction. QCAT is a tribunal that deals with issues involving people with impaired mental capacity. It operates on an informal basis, compared to the courts. It will examine the proposed transaction and, if it is in order, give its approval. QCAT may also add some conditions that it will require to be met. In the above case example, if the attorney had obtained the approval of QCAT he would have been saved the uncomfortable investigation and the court case that followed.<\/p>\nHow We Can Help<\/h3>\n
If you have any questions about your obligations as an attorney, or believe there has been a case of misconduct by attorneys, one of our lawyers can assist you.<\/p>\n
Get the best representation. Contact Ryan Murdoch O’Regan Lawyers’ experienced wills and estates lawyers on 1800 999 529<\/a>, email mail@rmold.newwebsite.live<\/a> or submit an enquiry below.<\/p>\n