Enduring Powers of Attorney: Conflict Clauses
With an ageing population and increasing numbers of ‘blended’ families, we have had numerous opportunities to draft Enduring Powers of Attorney with so-called ‘Conflict’ Clauses.
In the case of blended families, one type of Conflict Clause expressly allows the Attorney who is acting on behalf of the Principal to act in a transaction where there may be a conflict between the best interests of the Attorney and their Principal or other associated parties. When would such a clause be useful?
When an Attorney is acting on behalf of their spouse, sometimes adult step-children can be very critical of choices that are made on behalf of their biological parent. And if one of these children requests an investigation by the Office of the Adult Guardian into the finances of the Principal and their Attorney, or a review of decisions that have been made, it can make life extremely difficult for both the Attorney, and the Principal who they are trying to take care of. Whilst these investigations are an important safeguard for people who have not chosen their Attorney/s wisely, sometimes people reporting a case of abuse or financial impropriety are doing so for their own reasons.
The Office of the Adult Guardian Annual Report of 2011-2012 clearly shows an increasing number of allegations made and resulting investigations undertaken. Notably, in over half of the investigations undertaken, a finding was not made against the Attorney because in 42% of the cases the Principal did not lack capacity, and 21% of the cases were found to be inappropriate referrals.
It is interesting to note that another source of conflict was demonstrated in the ‘Trends’ section of the above Annual Report which stated the following:
Investigations which have as a primary focus the high level of conflict between two or more appointed attorneys, such that the attorneys cannot work together to make future decisions for the adult.
While you can’t stop others from making a claim, a Conflict Clause in an Enduring Power of Attorney provides more of a buffer against some claims of financial impropriety that may be made.
After all, many couples over time put property into one or both names, add a name to an asset, change the ownership of shares held, to decrease taxation liabilities, or to protect their assets. This is often the case because while it might be to the [limited] detriment of the one person, it is advantageous to the couple as a whole.
When you’re thinking about implementing an Enduring Power of Attorney, think realistically about the relationships in your family… and give McLaughlins Lawyers a call.
We’re here to help.