Financial Elder Abuse: 3 chilling examples and 6 important tips

Financial elder abuse, unfortunately, is not a new problem. A recent survey conducted by the State Trustees of Victoria has unveiled the drastic scale of the problem.

This survey has uncovered some worrying statistics. For example, 91% of respondents agreed with the proposition that it was: “easy for people to take advantage of older friends or family and exploit them for financial gain”; one in five knew somebody they believed to have been a victim of financial abuse; and one in twenty-five indicated they had experienced such abuse themselves.

Perhaps most shocking, but also unsurprising upon reflection, is the fact that in most cases the perpetrator of elder financial abuse was a family member. Indeed, this has sadly been what our Director of the Wills & Estates team, Tanya Herbertson has been seeing in private legal practice.

Here are three examples of elder financial abuse:

  • A mother of two adult children had appointed her son and daughter as her enduring attorneys under her Enduring Power of Attorney (‘EPA’). Under said EPA, the son and daughter were authorised to act separately. Some years later, the mother began to suffer from dementia and the EPA was invoked. The son took the lead in terms of attending to the financial affairs of his mother but failed to keep his sister properly appraised of financial transactions he was undertaking for their mother. After some time, the sister became suspicious. She investigated and realised large sums of money were being withdrawn from her mother’s bank account by her brother. Resolution of the problem couldn’t be agreed informally between the brother and sister. Ultimately the matter ended up in the Guardianship Tribunal where the brother and the sister were removed as attorneys and in their place the Public Trustee and Guardian was appointed to look after the mother’s affairs moving forward. The matter was not referred to the police for investigation into any criminal activity and potential criminal charges but that is something that could well have happened.
  • Agatha, a widow, is now suffering advanced dementia. Her only child, Sam, is her enduring attorney appointed pursuant to her EPA. Agatha’s health is not good and Sam is spending a lot of time looking after Agatha, attending to her housework and meal preparation and taking Agatha to numerous medical appointments. After a while, it is no longer feasible for Agatha to live at home and she needs to be moved into an aged care facility. Using the EPA, Sam sells Agatha’s house for a great price and arranges for payment of the bond to put Agatha into the aged care facility. There’s quite a bit of money left over from the sale of the house. Sam takes that money. Sam wonders, “What’s the problem? There is no problem is there? I’ll get everything anyway when mum dies – it’s what she would want. Plus, look at all the time and effort I’ve put in looking after mum, I deserve some payment for those services don’t I?” We tell Sam there is a big problem – a clear breach of duty by Sam as enduring attorney for Agatha. Agatha is not dead yet and Sam has no right to take her money! Sam also has no right to payment for his services unless such payment was expressly authorised in the EPA.
  • Elderly person, Bob, attends our office with their adult child/new partner/carer/other hopeful beneficiary in tow, ostensibly to make a new will. We insist, due to our professional obligations, on meeting with Bob in private and invite the attending person to wait in reception if they wish. It quickly becomes clear that Bob does not have the capacity to make a new will. Bob can’t tell us what his current will says, he doesn’t know what assets he owns and in fact Bob doesn’t seem to know why he’s come to see a lawyer. We decline to make a new will for Bob and discuss with him why it would be inappropriate and unethical to do so.

6 key tips to avoid elder financial abuse

So what can you do to ensure that you or your loved ones do not become a victim of elder financial abuse? There is no easy answer because there is no “watchdog” making sure people are doing the right thing and holding them accountable – the system relies on suspected elder abuse being reported.

  1. Do make sure you have both a will and an EPA in place;
  2. Do get legal advice about your will and EPA;
  3. Do consider putting detailed directions into your EPA as to the types of decisions you would like made if you lose the capacity to make your own decisions;
  4. Do make sure you appoint someone whom you absolutely trust;
  5. Do consider appointing two people; and
  6. Do specifically direct them in the EPA to consult each other and keep each other informed whenever acting as your attorney.

How can Snedden Hall & Gallop assist you?

Tanya Herbertson and the Wills & Estate team have expertise in all aspects of estate planning and can help you ensure your final wishes are respected. We can work with you to create an Enduring Power of Attorney and ensure that your wishes are communicated and documented and you can specify what decisions your attorney can make on your behalf. At Snedden Hall & Gallop, we have vast experience in ensuring that our clients are supported in the creation of their important personal documents including wills and EPAs. In addition, we have a strong litigation team who can assist you if an attorney misuses their power.

Please contact us by phone on (02) 6285 8000 or by email.

Tanya Herbertson’s Biography

You can find out more about Tanya in her biography.

Further information

Interested in more information? Raising Awareness of Elder Abuse