Guardianship and administration matters often involve complex legal issues and require careful consideration of the best interests of the represented person.
One such issue that frequently arises is the potential for conflicts of interest when deciding whether someone should be appointed as an administrator.
In this blog post, I discuss conflicts of interest in guardianship and administration cases and explore how the law addresses this issue when a proposed appointee is otherwise suitable for the role.
Conflicts of Interest in Guardianship and Administration
Conflicts of interest can arise when a proposed administrator has personal or financial interests that may not align with the best interests of the represented person.
This can become a significant concern in cases where the administrator is responsible for making important decisions about the represented person's estate, including potential legal claims or the management of assets.
An example of such a conflict can be found in IC [2023] WASAT 33, a recent Western Australia State Administrative Tribunal (WASAT) case, where the proposed administrator was the sister of the represented person and also a beneficiary of their mother's estate.
The Tribunal had to consider whether the sister's dual roles as administrator and beneficiary would create a conflict of interest that could compromise her ability to act in her brother's best interests.
The sister (VC) was the primary beneficiary of their mother's estate, which included the family home.
This created a conflict of interest because her brother (IC), for whom she was proposed to act as an administrator due to his mental disability, was apparently left out of their mother's will.
In other words, he was not set to inherit anything from the mother's estate.
VC stated that she intended to ensure that IC could continue to live in the family home for the rest of his life, which was also their mother's wish.
However, this intention was not legally secured as part of the mother's will.
The inherent conflict of interest lay in the fact that VC, as the beneficiary of the estate, could not act against her own interests and bring a claim on IC's behalf against the mother's estate, as it would potentially reduce the value of the estate she was set to receive.
While VC had the best intentions of providing for IC and ensuring his well-being, the law, unfortunately, has seen many instances where promises made cannot be kept in the future, regardless of the initial good intentions.
This highlighted a clear need for legal intervention to ensure IC's rights and interests were properly protected.
The conflict of interest was particularly significant because it could potentially affect IC's right to housing, given that the family home was part of the mother's estate.
It underscored the importance of considering potential conflicts of interest when appointing an administrator, particularly when the proposed administrator stands to benefit from the estate of the person they are set to represent.
Dealing with Conflicts of Interest
The Guardianship and Administration Act 1990 (WA) (GA Act) provides guidelines for determining the suitability of a proposed administrator, taking into account factors such as the compatibility of the proposed appointee with the represented person and the wishes of the represented person (s 68(3) GA Act).
In cases where a conflict of interest is identified, the Tribunal has several options to address the issue.
One option is to appoint a different individual or organization, such as the Public Trustee, to act as the administrator. This can help ensure that the represented person's best interests are protected by an independent party.
In IC [2023] WASAT 33, the Tribunal took this approach, appointing the Public Trustee as a limited administrator with specific responsibilities related to potential legal claims against the mother's estate. The sister was appointed as plenary administrator, save for this limited function given to the Public Trustee. This approach mitigates the conflict, by separating the roles and responsibilities that could potentially clash.
Lessons Learned
Cases like the one underscore the complexity of guardianship and administration matters, and the importance of identifying and properly addressing potential conflicts of interest.
They also highlight the need for legal professionals to be vigilant in spotting these issues and advising their clients accordingly.
The legal framework, including the GA Act and the Family Provision Act 1972 (WA), provide mechanisms to safeguard the best interests of the represented person, but they require careful navigation.
In cases where potential conflicts of interest arise, it's essential to consider all possible solutions - be it appointing a different administrator, creating a limited administration, or separating roles and responsibilities between multiple parties.
Key Take-Aways
While conflicts of interest in guardianship and administration matters can be complex, they are not insurmountable.
With careful planning, legal guidance, and the flexibility provided by our legal system, it is possible to ensure that the best interests of represented persons are protected, even in situations where conflicts of interest exist.
It's a reminder of the importance of specialist legal advice in navigating these challenging situations.