Power of attorney could lead to abuse

Financial abuse of the elderly can start with the emptying of a joint account or undue influence in the course of a one-off property deal but it can extend to all of an incapacitated person's finances.

If someone appoints a person with enduring power of attorney (EPA), they are effectively nominating a substitute decision-maker to look after their financial affairs and personal care.

However, EPAs are currently not monitored, giving rise to concerns that the system leaves elderly people open to an abuse of trust.

"Attorneys have complete power over the funds," says Mr John Costello, a solicitor with expertise handling cases involving elderly clients. "There is no proper controls over enduring power of attorneys, just a requirement to keep adequate accounts, whatever that means."

The Law Reform Commission suggests that an Office of the Public Guardian could monitor the EPAs as part of a radical overhaul of the current system for looking after the affairs of people who are mentally incapacitated.

An enduring power of attorney may be appointed - or executed - by someone when they show early signs of Alzheimer's disease or as a precautionary measure when making a will. For the appointment to be valid, the person must still be judged to have legal capacity.

Appointing an attorney means the elderly person can avoid becoming a ward of court - a costly, bureaucratic and impersonal process, according to Mr Costello.

This outdated wards of court system will be replaced if the Law Reform Commission's proposals come into being.

Under a guardianship order, a "personal guardian" will be appointed to manage the affairs of an elderly person if he or she had not nominated a family member or friend as an attorney. An EPA will only be displaced by a guardianship order if the Office of the Public Guardian deems it absolutely necessary.

Changing the system will be expensive and won't be done in the lifetime of the current Government, says Mr Costello.

"The problem is that anything to do with the elderly is rarely a priority for Government. Unless it's in the programme for Government or an individual politician takes an interest, the concern is that it would be left on the shelf for years."

As time goes by, the need for closer supervision of EPAs is likely to increase as the number of attorneys spirals. EPAs were only legislated for in 1996. Since then, the number of EPAs registered has steadily increased from six in 1997 to 86 in 2002.

But attorneys are only registered at the courts once the person who set it up is officially judged to be mentally incapacitated. As a result, it is impossible to know how many EPAs have been executed.