Inheritance Impatience: Seeking Legal Advice Before Death
What is Inheritance Impatience?
As a by-product of our ageing population and increasing life expectancy rates, children are having to wait longer and longer for their inheritance. In some instances, this may spark “inheritance impatience,” a term referring to the increasingly prevalent issue of elder financial abuse. That is, the illegal or improper use of an older family member’s finances or property without their informed consent or where consent has been gained by fraud, manipulation or duress. Often these situations arise where a child or other family member misuses their position as the person’s power of attorney and commonly involves misappropriating funds, property or valuables or applying undue influence on the person to change their Will.
Power of Attorney in Victoria
At Hentys, we often take calls from family members concerned about the actions of an attorney. Generally, a child of the person will be suspicious of the behaviour of their sibling in their capacity as the parent’s power of attorney and will wish to protect their parent from elder financial abuse and, when the time comes, protect their share of the inheritance.
There are three types of power of attorney in Victoria, operating under the Powers of Attorney Act 2014 (Vic). The person who is appointing a power of attorney is called a principal. A principal may appoint a trusted family member, a lawyer or a third party organisation such as State Trustees.
General Non-Enduring Power of Attorney
This is a legal document where a person may appoint one or more persons to make financial decisions for them in the event they are unable or unavailable to make these decisions for themselves. General non-enduring powers of attorney are limited in their operation in that they are often used for a specific purpose and for a fixed period of time. For example, this type of power of attorney may be used if a person is undergoing surgery and will not be able to financial decisions in their recovery. Once the specified time has lapsed, the power of attorney will cease to operate.
A general non-enduring power of attorney is not suitable for future planning.
Enduring Power of Attorney
This is a legal document where a person may appoint a person to make legal, financial and personal decisions for them in the event they no longer have capacity to make these decisions for themselves. Anyone over the age of 18 years who has decision-making capacity at the time of execution is able to make an enduring power of attorney arrangement. A person may not make an enduring power of attorney on behalf of someone else.
An enduring power of attorney may commence immediately, at a time specified by the principal or at which time that the principal lacks decision-making capacity. As the name suggests, enduring power of attorney continues to be in effect after the principal loses the capacity to make decisions for themselves.
This type of arrangement may be ended through revocation by the principle while they still have decision-making capacity or upon their death, or can be revoked by the appointed attorney with leave from the Victorian Civil and Administrative Tribunal (VCAT) or the Supreme Court.
An enduring power of attorney has a number of important duties, particularly once the principal loses their decision-making capacity. These may include to:
- Act honestly, diligently and in good faith;
- Exercise reasonable skill and care;
- Not use the position for profit;
- Avoid a conflict of interest;
- Not disclose confidential information gained as the attorney unless authorised; and
- Keep accurate records and accounts as required by legislation.
An enduring power of attorney may not make or revoke a Will of a principal, make or revoke an enduring power of attorney for the principal, vote on behalf of the principal, manage the estate of the principal on their death or consent to an unlawful act.
An appointment of a supportive attorney can provide a person support in making and acting on decisions. This is generally used where someone has a disability or has sustained a serious injury which may require them to need extra support while not necessarily diminishing their decision making capacity. An example is where a person has speech difficulties and therefore struggles to communicate effectively and may wish to appoint a supportive attorney to guide and assist them in communicating with organisations such as banks, Centrelink or utility providers.
Are You Concerned About The Behaviour of a Power of Attorney?
VCAT is responsible for hearing disputes about powers of attorneys, particularly concerning enduring powers of attorney. If you believe an attorney is abusing their position, you may be eligible to make an application to have them removed. VCAT will take applications from the following people:
- The principal;
- The Public Advocate;
- The nearest relative of the principal; and
- Any other person whom VCAT is satisfied has a special interest in the affairs of the principal.
There are a number of reasons why someone may question whether an enduring power of attorney is fulfilling their duties. VCAT may make an order on a number of grounds including, but not limited to, the validity, scope and exercise of power of the power of attorney or may order the undertaking an examination and auditing of accounts and/or relevant documents regarding the exercise of the enduring power of attorney to be provided to VCAT and the applicant.
Furthermore, it is an offence for a person to act dishonestly to obtain an enduring power of attorney for their own financial benefit, or to cause loss to the principal.
If you think that a family member is acting outside their capacity as an enduring power of attorney, you may contact Hentys to gain legal advice.
Can I Seek Legal Advice Before Death?
It is not uncommon to want to secure your inheritance before your parent or loved one passes away. Family breakdown, estrangement and questionable power of attorney arrangements may be contributing factors and come with feelings of unease for children and other relatives. A beneficiary may be concerned that they have not been adequately provided for in a Will, that a sibling or family member may contest the Will or may be worried that the assets will be spent prior to the death of the testator. While all valid concerns, it is important to note that the law is ever-changing and as such any advice obtained prior to the death of a testator may be dated by the time they pass. It is therefore recommended that further advice is sought on death.
If you are concerned that you have not been adequately provided for under the Will of a family member, there are a few routes you may take. You may have a discussion with the testator about updating their will to provide you with greater provision. In Hall v Hall (1868) LR 1, the Court found certain types of influence to be lawful. For example, “persuasion, appeals to the affection or ties of kindred, to a sentiment of gratitude for past services, or pity for future destitution, or the like — these are all legitimate, and may be fairly pressed on a testator.” Only where the testator’s will is overpowered by importunity or threats to the extent that the testator lacks free exercise of his or her judgment, will undue influence be found to exist.
Alternatively, you may want to seek legal advice to determine your prospect of being able to make a successful Part IV on the estate once the testator has passed away. Advice you may seek from a lawyer includes whether you are an eligible person, and whether it is likely that the deceased had a moral obligation to provide for your proper maintenance and support and, in their Will, failed to make adequate provision. For more information about Part IV claims and contesting a Will, see our blog on the process of contesting a will.
If you are concerned that a power of attorney is misusing the funds of your family member, you may wish to get legal advice regarding your ability to lodge a VCAT application. An order may be made so you can receive an audit of the principal’s finances to ensure the proper use of the funds. In some extreme cases, VCAT may make an order to remove the power of attorney entirely and appoint State Trustees in their place.
A family member is well within their rights to seek legal advice regarding their inheritance or Inheritance Disputes prior to the death of a testator. Being an emotional and uncomfortable time for most, Hentys handles your enquiry with care and sympathy. For more information, do not hesitate to contact our team.