Financial elder abuse, also known as inheritance impatience, is a significant concern in Australia as our population ages. It occurs when trusted individuals exploit vulnerable elderly persons to access their financial resources. Let's delve into what constitutes this form of abuse, how to recognise it and what measures can be taken to prevent it.
What exactly is financial elder abuse?
Financial elder abuse takes various forms – fraud, coercion, undue influence – where perpetrators misuse their authority or manipulate the elder into making financial decisions against their best interests. This is a betrayal that threatens not just financial security but also dignity and autonomy in old age.
Who's most at risk?
Elders in poor health, living alone or socially isolated are prime targets. Signs can be subtle: sudden changes in financial behaviour, unexplained withdrawals or disrupted access to financial information. These vulnerabilities make elders easy prey for those looking to exploit trust for personal gain.
Recognising the signs
Caregivers and advisors need to stay alert for red flags.
- Isolation: elders being cut off from family or friends, often under the guise of ‘protecting’ them.
- Unusual financial activity: strange transactions or significant withdrawals that don't align with the elder's usual habits.
- Control dynamics: someone else calling the shots on financial matters, denying the elder a say in their own affairs.
- Document disruption: financial statements mysteriously missing, preventing the elder from monitoring their finances.
How can we prevent financial elder abuse?
Proactive measures are key.
- Choose wisely: ensure an enduring power of attorney is a trusted individual (or individuals) capable of managing financial affairs and maintaining accurate records.
- Clear communication: ensure all financial decisions involve the elder's full understanding and agreement. Open dialogue can deter abuse.
- Independent advice: hold meetings in private to avoid undue influence from others with conflicting interests.
- Capacity assessment: regular checks on mental capacity ensure elders can make informed financial decisions. Seek professional input if capacity is in question.
- Documentation: detailed records of all financial dealings protect against potential abuse and serve as evidence if disputes arise.
- Regular monitoring: continuous oversight of the elder's financial situation can help identify and address any irregularities early on.
Enduring powers of attorney: what they can and can't do
An enduring power of attorney (EPOA) allows an elder to appoint a trusted person to manage their financial affairs if they become unable to do so. It's crucial to clearly define what the appointed attorney can and cannot do. Regular reviews and updates to the EPOA will ensure it accurately reflects the elder's current wishes and circumstances. Misuse of an EPOA can lead to significant financial abuse, so it's important to choose an attorney who is trustworthy and capable.
Incapacity
Incapacity is a critical factor in financial elder abuse cases. When elders lose the mental capacity to make sound financial decisions, they become more vulnerable to exploitation. Regular assessments of the elder's capacity are essential, especially if there are concerns about their ability to understand and manage their financial affairs. Medical and legal professionals should be consulted to ensure the elder's interests are protected.
Upon a loss of capacity, it’s important to notify key organisations such as the elder’s bank. This ensures the bank implements its internal protections, which helps prevent unlawful transactions.
Misappropriation: protecting estates from exploitation
Misappropriation of assets is a common tactic used in financial elder abuse. This can include unauthorised withdrawals, transfers or sales of property. Often, unscrupulous individuals try to get money out of estates before or after the elder's death. To prevent such exploitation, it's important to have clear and comprehensive estate planning documents. Regularly updating Wills and creating testamentary trusts can help protect assets and ensure they are distributed according to the elder's wishes. Executors and trustees should be chosen carefully, with an emphasis on their reliability and integrity.
What to do if you discover financial elder abuse
Obtaining legal advice is the first step if financial elder abuse is discovered. If the relevant transactions cannot be undone or the matter resolved with the involvement of lawyers, an application to the State Administration Tribunal or the Supreme Court of WA may be necessary.
Conclusion
Financial elder abuse threatens the wellbeing of Australia's elderly population, undermining their economic security and personal autonomy. By raising awareness and taking preventive steps, we can create a safer environment where elders retain control over their finances and enjoy their later years in peace.
At Hall & Wilcox, we're committed to safeguarding elders from financial exploitation. Our experienced team understands the complexities of elder abuse cases and advocates for justice and protection.
Have concerns or need advice? Get in touch with McLane.
