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Most people will have memories of their grandparents sending them to the shop for some milk and telling them to get themselves a treat with the change. For most, this resulted in a bottle of Hall’s Lemonade, a Bubble ‘O Bill or a packet of grape flavoured Hubba Bubba.

An alarming number of adult children are now embracing this tradition in their adult lives and using it as a licence to raid their parents’ bank accounts as they get older. The words “authorised transaction” seem to have become the default response of lawyers acting for said adult children and they seem to think that as soon as this card is pulled, all sins are forgiven.

There are many reasons why someone might do this to their parents. Gambling and drug use are the first cabs off the rank, followed closely by relationship breakdowns and general financial hardship.

In their own minds some probably justify it by convincing themselves that they do jobs for their parents and are therefore entitled. They may work on an assumption their parents won’t even know the extent of it. Even worse than that, they might ask their parents if it is okay to take some money, knowing full well that the parent doesn’t have the capacity to consent. In some cases they will go so far as to threaten access to the grandchildren if they don’t give them access to their accounts.

Many simply don’t care as they know the only people who will ultimately suffer are their siblings.

As the sibling it can come as quite a shock to learn that their parents’ bank accounts have been emptied prior to their death. Or that their main residence has been reverse-mortgaged.

The problem though, is that the money has usually been spent so there is not much chance of recovery, and even if there is, it will be up to the aggrieved sibling to pay the costs to try and recover the funds.

If someone has acted under an Enduring Power of Attorney then they have duties to keep receipts, not enter into conflict transactions and account for all monies spent.

The issue more commonly seen now though is where parents have given adult children access to their accounts and “authorised” them to make certain transactions. The aggrieved sibling can often feel powerless and defeated by this stage.

There are all kinds of arguments you can try and run – breach of fiduciary duties, theft, breach of agency, constructive trust etc. Occasionally as we recently saw in Queensland, they even get the attention of the police.

But the reality in most cases? The money is gone. And appointing a forensic accountant to trace the money is likely to cost tens of thousands of dollars. And to rub salt into the open wounds, it is usually the perpetrator who then controls the estate, so anyone who has lost out as a result will then need to use their own funds to try and find and recover the money.

Once it has happened, there is sadly no magic silver bullet to fix it.

If you suspect something happening, seek immediate advice as there may be steps you can take which can place the control of someone’s finances in the hands of someone more trustworthy.

Steps like an urgent application to the relevant tribunal, for example, may result in at least a temporary order being made. And it may not be as difficult as you anticipate. There may also be other practical steps you can take, so ensure you seek advice…. but do it early is the key message.

If you wait until the funds have been depleted, it may be too late.

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how to protect the assets of elderly parents against exploitation by the kids

27 November 2019
Nicole Treacey

Most people will have memories of their grandparents sending them to the shop for some milk and telling them to get themselves a treat with the change. For most, this resulted in a bottle of Hall’s Lemonade, a Bubble ‘O Bill or a packet of grape flavoured Hubba Bubba.

An alarming number of adult children are now embracing this tradition in their adult lives and using it as a licence to raid their parents’ bank accounts as they get older. The words “authorised transaction” seem to have become the default response of lawyers acting for said adult children and they seem to think that as soon as this card is pulled, all sins are forgiven.

There are many reasons why someone might do this to their parents. Gambling and drug use are the first cabs off the rank, followed closely by relationship breakdowns and general financial hardship.

In their own minds some probably justify it by convincing themselves that they do jobs for their parents and are therefore entitled. They may work on an assumption their parents won’t even know the extent of it. Even worse than that, they might ask their parents if it is okay to take some money, knowing full well that the parent doesn’t have the capacity to consent. In some cases they will go so far as to threaten access to the grandchildren if they don’t give them access to their accounts.

Many simply don’t care as they know the only people who will ultimately suffer are their siblings.

As the sibling it can come as quite a shock to learn that their parents’ bank accounts have been emptied prior to their death. Or that their main residence has been reverse-mortgaged.

The problem though, is that the money has usually been spent so there is not much chance of recovery, and even if there is, it will be up to the aggrieved sibling to pay the costs to try and recover the funds.

If someone has acted under an Enduring Power of Attorney then they have duties to keep receipts, not enter into conflict transactions and account for all monies spent.

The issue more commonly seen now though is where parents have given adult children access to their accounts and “authorised” them to make certain transactions. The aggrieved sibling can often feel powerless and defeated by this stage.

There are all kinds of arguments you can try and run – breach of fiduciary duties, theft, breach of agency, constructive trust etc. Occasionally as we recently saw in Queensland, they even get the attention of the police.

But the reality in most cases? The money is gone. And appointing a forensic accountant to trace the money is likely to cost tens of thousands of dollars. And to rub salt into the open wounds, it is usually the perpetrator who then controls the estate, so anyone who has lost out as a result will then need to use their own funds to try and find and recover the money.

Once it has happened, there is sadly no magic silver bullet to fix it.

If you suspect something happening, seek immediate advice as there may be steps you can take which can place the control of someone’s finances in the hands of someone more trustworthy.

Steps like an urgent application to the relevant tribunal, for example, may result in at least a temporary order being made. And it may not be as difficult as you anticipate. There may also be other practical steps you can take, so ensure you seek advice…. but do it early is the key message.

If you wait until the funds have been depleted, it may be too late.