Elder financial abuse – where a person takes advantage of an elder person's financial position for their own benefit – has thankfully become a lukewarm (as compared to cold) topic in recent years. Consequently, people at large are starting to realise that elder financial abuse happens in this country, and it happens a lot.
Lack of statistics on the scale of elder financial abuse
Like domestic violence, it's difficult to get a good idea of actual figures because parents are usually unwilling, or unable, to speak up. Often it comes down to other siblings cottoning on to the behaviour of their dishonest sibling.
Often adult children, and some say the evidence suggests adult sons are most to blame, use their close relationship with their parents, often coupled with a legal document called a Power of Attorney, to take money improperly from their suspecting or unsuspecting elderly parent(s).
Declining physical health and mental faculties make elderly people more vulnerable
During this period of later life, parents might be debilitated physically in some way. They may be on a walking frame or they may be unable to get out of the house with ease for some reason or another. They may be in the early or middle or high stages of dementia.
In these circumstances, they are very vulnerable, and therefore easy prey for adult children with an acquisitive streak.
"Early inheritance syndrome" can manifest in a variety of ways
Some commentators diagnose such adult children as having "early inheritance syndrome", whereby they feel a sense of entitlement to the assets of the parent. Perhaps due to growing property prices and rising costs of living, such children consider themselves entitled to their parents' money early.
The phenomenon might manifest itself by the adult child using dad's bankcard to pay for petrol, or for some groceries, but such use is a slippery slope on which funds may be withdrawn to buy a car, or pay off a credit card, or some of the mortgage. The list is endless.
Grasping adult children find multitude of ways to justify their actions
Being a specialist solicitor in wills and estates law, but mostly due to my experience as a human in general, I am convinced that the mind is an incredibly powerful, and oft-diabolical, feature of homo sapiens.
Many times I have seen people perform questionable actions such as withdrawing significant sums for themselves from mum's account, or transferring dad's home to themselves, all the while justifying their actions as completely morally righteous because "it's what mum would've wanted" or "dad asked me to do it before he died" or "I've done so much for mum, whereas my brother only visits once a year, so I deserve it" or "I'm going to get it eventually anyway" or "mum doesn't need the money whereas I do".
Parents often persuaded to change their will in dubious circumstances
Further, I have seen, many times, children arrange for their elderly parents to change their will in dubious circumstances, whether it be when the parent is on heavy medication, or sick, or following a good dose of "undue influence" or psychological manipulation.
I've seen adult children, estranged from their parent for 30 years, come back as doting carers when being informed of dad's terminal illness. While the change of heart may appear genuine and loving, it often anticipates a challenge to the parent's will after they die – assuming they didn't manage to persuade the parent before their death to change their will in favour of the long-lost and now suddenly devoted offspring.
Lawyers not always sufficiently vigilant about testamentary capacity
I've also seen, worryingly on many occasions, solicitors who don't take appropriate precautionary measures to ensure a person's capacity is completely sound when making a will or power of attorney (for example, by obtaining doctor or geriatric reports).
This is not to say it is the norm and, to be honest, I can't quote figures on elder financial abuse. However, from my observations in my profession – and readers probably know people who have experienced financial abuse – it is a fairly regular occurrence.
No watchdog or registration requirement for power of attorney documents
Part of the problem is the lack of a watchdog for power of attorney documents. Currently, there is no registration requirement in relation to the making of a power of attorney document.
These documents allow a person to appoint a person to manage their finances while their capacity is sound. As far as I am aware, nobody has been criminally prosecuted for improperly acting as an attorney.
Building checks and balances into power of attorney documents
Power of attorney documents are very important, prudent documents to have, contingent upon a trustworthy person or persons being appointed. However, people contemplating making a power of attorney may wish to ensure that a "checks and balances" system exists on the attorney document – for example, by ensuring that two people must act together, or only authorising the attorney to make decisions on certain financial assets rather than holus bolus.
I am sure that the misuse of power of attorney documents occurs in only a small percentage of cases. However, given the number of elderly people with these documents, even a small percentage means that a lot of elderly people are being abused financially.
Our population is aging and old age is often synonymous with vulnerability. At the same time, as a society we continue to worship the cult of youth, which means that the older demographic is often overlooked in the flood of other news in the media.
It is now more important than ever for people to be able to recognise the elder financial abuse taking place around them.
Joshua Crowther
Estate planning
Stacks Law Firm
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