The case of Smith v. Smith  NSW SC 408 is a good illustration as to what can go wrong.
Ronnie Smith appointed his second wife, Joy, as his attorney. Ronnie also made a Will giving his home and half the residue of his estate to Joy and the other half of the residue was divided equally between his sons from his first marriage. At that time, his estate was worth about $1.5 Million.
Shortly after doing his Power of Attorney and his Will, Ronnie developed dementia. Joy, acting as Ronnie’s attorney, sold shares worth about $800,000.00 and Ronnie’s home and paid the moneys into their joint bank account. She then spent money on holidays for herself and her side of the family, an expensive car, expensive jewellery, gambling and regular entertainment. She also used $347,000.00 of Ronnie’s money to fund the purchase of a residence in the name of her daughter and her son-in-law. She then sold some more assets belonging to Ronnie and used $200,000.00 to construct and fit out a granny flat for herself on her daughter’s and son-in-law’s property.
On Ronnie’s death his estate was valued at only $75,000.00 and his sons brought proceedings on behalf of his estate against Joy, the Executor and the daughter and son-in-law. The Court found that Joy had breached her duty to act in Ronnie’s interest (and in the interest of his estate). Through impecuniosity, Joy was unable to make good the money she had taken from Ronnie and from his estate so the Court ordered that the daughter and son-in-law’s residence be transferred to Ronnie’s two sons from his first marriage and the small amount of money that was left for the estate was also transferred to the sons.
The lesson is: be very, very careful that the people you choose as your attorney have integrity and common sense. It might also be wise to consider appointing two attorneys with authority to only act jointly (together) with another substitute attorney listed as a backup. If you have any queries, please call Paul Pritchard on 9543 1444.