Despite more attention being given to the problem of elder abuse, and some headway being made in terms of preventing it, detecting it and punishing the guilty, it’s likely that rising property prices and associated low housing affordability will provide a powerful incentive for some of the children of property owners to be tempted to abuse their parents. These children often feel that all or part of the value of their parents’ property is rightfully theirs.
In a previous article on elder abuse, we discussed elder abuse and provided some case studies to illustrate how elder abuse manifests itself. In this article, we examine how an enduring power of attorney (EPoA) is not infallible, why detecting elder abuse is difficult and detail two typical examples of elder abuse from submissions to an ongoing Western Australian Parliamentary Legislative Council Select Committee inquiry into elder abuse.
Those guilty of elder abuse can often hold an EPoA because they are trusted by the victims – so simply having one does not guarantee your client won’t become a victim. The main perpetrators of elder abuse are children or step-children1 and interestingly, women, rather than men, are more likely to be guilty. This may be because women often shoulder more of the responsibility of caring for their elderly parents and are more likely to be in a position that enables abuse to occur. Having an independent EPoA goes some way to reducing this risk.
Detecting elder abuse is usually a qualitative process. A situation where an elderly person gifts $300,000 to an unrelated person who has cared for them for ten years is not automatically a clear case of elder abuse. The elderly person may be extremely wealthy and the care that was given may have been considerable and unpaid – in which case it becomes difficult to call this situation elder abuse.
The broader circumstances need to be considered when assessing elder abuse. In the above example, if the care had been minimal and the sum of money was substantial relative to the elderly person’s overall wealth then it could easily be considered elder abuse. Understanding why a gift was made is also important - was it unprompted or was the potential abuser using coercion. The qualitative element is another factor that makes it very difficult for police to bring charges in cases of elder abuse.
In their submission to the WA Select Committee, the WA Public Trustee said that common risk factors2 include:
Outlined below are two examples of relatively common types of elder abuse.
Sons and granddaughters
A granddaughter in Western Australia took her father and uncles to the WA State Administrative Tribunal to have them removed as guardians of their parents’ estate and to have her grandparents’ property returned to them. The father and uncles, who had powers of guardianship over their parents – both of whom suffered from dementia – took ownership of their parents’ property. It was only when the granddaughter discovered this and decided to challenge her father and uncles that this case became known.
This scenario shows how difficult it can be to detect and prove elder abuse because many families will not reveal elder abuse as they fear a breakdown in family relationships or don’t want to expose the misbehaviour of family members.Solution: Clients should appoint at least two EPoAs who must make joint decisions - ensuring decisions will only be made in the client’s interest.
Broke boomerang children
With property prices and rents increasing, children are sometimes forced to move back in with their parents – referred to as boomerang children. In some of these cases, the parents agree to either gift some, or all, of their property in return for care and a right to remain living in the property until they die. These types of arrangements are often called ‘family agreements’. This situation can cause problems when the boomerang child uses the property as security for a loan and are then unable to repay the loan, leading to the sale of the property. Alternatively, a new relationship between the child and a partner can cause the family dynamic to alter, at which point the parents desire a return to how things were before. This is often impossible because the new partner will also have certain rights. This can cause considerable distress and relationship breakdowns and in some cases the elderly parents have felt forced to move out and rent.
Solution: Any family agreements need to be checked by a lawyer to ensure they are properly drafted and that all parties are clear as to their rights and obligations.
At AET, we can provide valuable assistance with EPoA preparation, incorporating safeguard provisions for two or more attorneys to be appointed. Those appointed as EPoAs can be bound to act only in accordance with defined terms and arrangements. This could include conditions that make it impossible to transfer properties. The preparation of an EPoA needs at least equal weighting with a Will to ensure your clients aren’t left vulnerable in their later years. After all, financial victims of elder abuse may not have any assets left for their Will to distribute.
For more information on enduring powers of attorney, please call one of our estate planning lawyers on 1800 882 218.
1 Source: 'National Elder Abuse Annual Report 2015 -2016', Advocare Incorporated, WA.
2 Source: Page 4.