By Hugh Docker, Senior Business Development Manager, Trustee Services

Recent studies and reports from various State-based agencies have identified an alarming trend in the increase of 'elder abuse'. This effectively is the collective description for a series of abusive behaviours suffered by victims, with the most prevalent kinds of abuse being psychological (emotional) and financial. Remaining kinds include physical, social, neglect and in some cases – sexual abuse.

The key perpetrators are, too often, immediate family members in a position of trust, who may (or may not) hold an enduring power of attorney (EPoA), which is commonly found to have been (ab)used for personal financial advantage. Even in the absence of an EPoA, elder abuse can be manifested via actions of non-repayment of short-term loans; forging of signatures associated with bank accounts; forging of signatures and selected terms of legal documents; misappropriation of funds; deception and bullying.

Whilst agencies can nominate a statistic on the prevalence of abuse – say, one in 18 elderly Australians will be subject thereto, this proportion is likely to be understated given the tendency for a vast number of cases to remain unreported due to fear of disclosure or potential embarrassment. In around two-thirds of elder abuse cases, the abuser is a family member, who is more than likely to be an adult child.1

The scenarios associated with elder abuse include acquiescing to loan requests from adult children which are not documented or repaid, or as time moves on, even acknowledged as such! A more subtle example is where a 'friend' moves in with the victim who commences the process of 'burning' wealth through a lavish lifestyle. Other examples are seen through coercion and undue pressure in Will provisions to garner favour for a sibling (to the detriment of others), or benefitting a trusted 'friend' in the circumstances of an absence of relatives.

Agencies such as Seniors Rights Victoria; Advocare in Western Australia or the NSW Elder Abuse Helpline and Resource Unit can be contacted for free legal advice and information to assist in detecting elder abuse. Its prevalence is expected to increase with an ageing population and the rise in detection of incidences of dementia cases, in an environment of enhanced wealth accrued by the older generation through the value of the family home. This is a soft target for abusers, to force a sale or arrange paperwork for a property transfer for their financial benefit.

Case studies

Outlined below are some cases of elder abuse we have encountered at AET.

Scenario 1: Financial abuse

An elderly client moved in with 'relations'. Following her death it was revealed that there had been systematic (often daily) withdrawals of funds via the ATM significantly depleting assets for the beneficiaries of her estate. Access to a PIN and the respective debit card was all it took. Recovery action involving Court proceedings is a likely scenario.

Solution: Clients should appoint an independent power of attorney or at least two attorneys who must make joint decisions.

Scenario 2: An elderly client purchased real estate on the basis they had use of a 'granny flat', with no legal title to back it up.

We have seen several instances where an elderly person was induced to sell their residence and to contribute some (if not all) of the proceeds to enable their child to purchase a house (in the child's name) with some form of right to reside provided - commonly known as a 'granny flat'. Too often the process benefited the child and not the parent and the other children were aggrieved when 'their' inheritance was significantly reduced. Legal principles of unjust enrichment, unconscionable conduct, undue influence arise and the executors and Courts are left to deal with the mess.

Solution: Family members need to be very clear as to the process that is taking place and legal advice is required.

Scenario 3: The home of the elderly person was transferred to another person at a reduced value.

Even the long-time gardener has been known to get in on the act!

The elderly person was convinced to transfer their home at a reduced value (often Council value) to free up some quick cash so they could move into a retirement home. They were convinced not to spend money on a real estate agent, as they can't be trusted.

Solution: This situation is difficult to control – as it is often done when there is no family around and only discovered when the person dies. An executor should investigate the circumstances and take action if possible.

The most vulnerable people are those who have a cognitive impairment, are single, isolated and have adult children or grandchildren who collude to remove assets from the older person due to their need or greed, or to safeguard their ‘inheritance’2.

At AET, we can provide valuable assistance with EPoA preparation, incorporating safeguard provisions for two or more attorneys to be appointed, who are potentially bound to act only in accordance with defined terms and arrangements. Current estate planning practice notes the preparation of the EPoA bears equal weighting with the terms and arrangements of a properly drafted Will.

For more information on enduring powers of attorney, please call us on 1800 882 218.

1 Source: 'National Elder Abuse Annual Report 2014 -2015', Advocare Incorporated, WA.
2 Source: 'Government of Western Australia, Department of Justice, Inquiry into elder abuse, 13 November 2017'.