After his wife’s death Mr Jones appointed his daughter Mary as his attorney for both property and personal care and welfare. Mary was still living in Christchurch whereas his other daughter, Lucy, now lived permanently in London.
He thought this was a good practical choice, but was it really the right decision? The contrasting scenarios below illustrate what can happen when Mary in her role as attorney and her sister Lucy are in conflict and the outcomes that might result:
Mr Jones had always been adamant that if he were unable to care for himself he wanted arrangements made so he would be cared for in his own home. This would not be a problem financially as he had a substantial investment portfolio. Recently Mr Jones had a massive medical event and the doctor certified that he has lost his mental capacity.
After taking advice from an investment advisor Mary has decided to change her father’s investments to favour increasing income growth, rather than capital growth. Lucy is very unhappy with this because Mary’s decision is likely to diminish the value of her future inheritance.
As her father’s attorney, Mary has put her father’s best interests first. The potential effect on his estate was not a relevant consideration. Whilst Lucy might be very unhappy with Mary’s decision, there is no basis on which Lucy can legally challenge this.
By contrast Mary instead decides to put her father into a rest home, rent out his home to help pay for his rest home care fees and change the investments to favour capital growth. A major conflict ensures between Mary and her sister Lucy. What can Lucy do?
A number of options may be available to Lucy:
- Given Mr Jones cannot act for himself, Lucy as his daughter can apply to the Family Court to review Mary’s decision. The court will not always intervene. It will do so where the attorney’s decision undermines the purpose of the Act, where the decision is irrational, fails to take into account relevant matters or takes into account irrelevant matters. Mary’s decision appears to fall well within these criteria so that the court is likely to review it.
Another option would be for Lucy to apply to the Family Court to revoke Mary’s appointment as her father’s property and welfare attorney. Again, Lucy’s right to apply would be based on her father’s incapacity and Lucy’s status as his daughter. Such action can be taken by any relative.
Even if Lucy does not apply to revoke Mary’s appointment but simply to review Mary’s decision, the Family Court can to revoke Mary’s appointment if it is satisfied that Mary is not acting in her father’s best interests or proposes not to act in his best interests.
Interestingly, the Protection of Personal and Property Rights Act now provides that where any application is made to the Family Court regarding attorney decisions the court must revoke the appointment of the attorney if the court regards that attorney as unsuitable. What does this mean? It is not defined in the Act, but one judgment noted that the Court must…
“…..require an unsuitability of a kind which undermines the ability of the attorney to exercise his/her responsibility, or misconduct of such a profound nature that it completely undermines any confidence the court might have that the attorney could responsibly exercise those powers……..”
Examples the court gave in that case were the mental or physical incapacity of the attorney, criminal behaviour by the attorney, or behaviour that demonstrates a clear inability to exercise good judgment or an inability to carry out the fundamental tasks of the attorney.
Mary’s disregard for her father’s wishes and apparent self interest in the investment strategy arguably both point towards an inability to carry out her fundamental duties as her father’s attorney. Such a finding would see the court bound to remove Mary as an attorney.
These scenarios involve a single attorney. Similar issues can arise where a number of attorneys are appointed. The courts role is the same however many attorneys are involved.
Whilst the choice of attorneys is up to you, there are a number of considerations to be taken into account to ensure you make the right choice. Should you wish to discuss your particular circumstances and the choice of attorney please contact one of our team to ensure your enduring powers of attorney are tailored specifically to your needs.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.