Shining a spotlight on financial elder abuse

With the recent announcement of a Royal Commission into Australia’s aged care system, more and more stories of the physical and emotional abuse of our elderly are emerging.

Elder abuse is defined as “a single or repeated act, or lack of appropriate action, occurring within any relationship where there is an expectation of trust which causes harm or distress to an older person.”  

What most people may not know is that the most common form of elder abuse is not physical or emotional, it’s financial. The World Health Organisation defines financial elder abuse as “the illegal or improper exploitation or use of funds or other resources of the older person.”

Broad definitions aside, some real world examples of financial elder abuse include, but are not limited to:

  • An elderly person being denied access to their own money;
  • A person “borrowing” money from elderly person but refusing to return it;
  • Funds being taken from an elderly person’s bank account/s without explanation;
  • Abuse of a power of attorney to withhold or misuse finances;
  • A person accessing an elderly person’s pension, other payment or credit card without authorisation to do so;
  • An elderly person being bullied or coerced into making changes to financial or legal documents such as their Will and Powers of Attorney;
  • An elderly person’s bills not being paid despite them having sufficient funds to do so;
  • Forcing an elderly person’s signature on forms; and
  • Abusing joint authority on a bank form.

A recent study indicated  as many 1 in 5 Victorians have experienced someone financially taking advantage of a vulnerable family member or friend. The real number is likely higher, given that elderly people often choose not to report such abuse due to shame and fear of further abuse.

Another recent study showed that 61 per cent of elder-abuse related calls to Seniors Rights Victoria related to financial abuse in particular, indicating  this is a real and growing issue.

Unaccounted withdrawals from an elderly person’s accounts are often linked to so-called “inheritance impatience” and “early inheritance syndrome,” whereby, typically, children of an elderly person grow impatient as their parent lives longer, meaning they have to wait longer to benefit from their parent’s estate.

This leads to a sense of entitlement to early access to a parent’s funds, and subsequent withdrawals of funds, despite this actually being theft. This mentality is a growing concern, particularly given our ageing population, and more work needs to be done to try and put a stop to it.

Also of concern is the abuse of position/power by attorneys under Powers of Attorney. Whilst an attorney is legally obligated to act in the best interests of their principal, the above statistics indicate this is not always happening. Given that attorneys have relatively easy access to the person’s bank account/s, it is easy for such abuse to take place undetected.

The Victorian and other state governments are working to develop frameworks to try and protect the elderly from financial elder abuse.

But until that time, what can people do to ensure, as much as possible, that they will not be subject to such abuse?

A first step is to make sure  you think long and hard about who you want to appoint to powerful positions such as your attorney for financial matters and the executor of your Will.

If you consider that your loved ones may not have your best interests at heart, it may be worthwhile considering an independent person or organisation to act in these roles.

If this is an issue which concerns you, we strongly encourage you to get in touch with our experienced Private Clients team for assistance.

This article was written by Todd Terzioski, Lawyer – Private Clients.