What is elder financial abuse?

Elder financial abuse is the misuse of money or assets of an older person, usually by a family member or friend.

It is a complex, and often hidden, form of abuse.

In some cases, the abuser will have legal authority over the money or assets of the person they are abusing by way of a power of attorney.

In this article, we provide information about elder financial abuse, how to recognise this abuse cycle and where to seek help if you are the victim of financial abuse, or you know someone who is.

Elder financial abuse often begins with situations where qualified medical staff assess the senior person as having impaired decision-making capacity.

Making decisions about your own life and wellbeing, and the use of your finances is a human right and the law presumes that adults have the capacity to make their own decisions unless proven otherwise.

Qualified medical staff must see evidence of mental decline to assume there is impaired decision-making capacity, which would trigger the appointment of a Guardian or Enduring Power of Attorney.

The Guardianship and Administration Act 2000 and Powers of Attorney Act 1998 define capacity as the ability to:

1. understand the nature and effect of decisions about a matter
2. freely and voluntarily make decisions about the matter, and
3. communicate the decisions in some way.

A loss of this capacity would be assumed as the inability to carry out the above.

Elder abuse can also enter the equation when seniors are not yet under a Guardianship or Power of Attorney but friends or family members are manipulating them to make decisions about financial matters that are not in the senior person’s best interest.

An example of this could be coercion into selling their house to a friend or relative for less than market value.

Financial manipulation and elder abuse can happen slowly and incrementally and many people may not realise someone is financially abusing them until it’s too late.

There are some signs of financial abuse you can look out for in relation to your personal financial situation and that of others you care for.

These include:

• Personal possessions going missing
• Someone controlling or manipulating your access to money
• Someone is using your money/bank cards without your knowledge or consent
• Forgery of signatures on documents
• Threats to take away control of your finances/impose power of attorney
• Misuse of personal assets such as moving into your home or investment property
• Arranging less care than needed, to maximise inheritance
• Copying or keeping personal information and certification
• Undue pressure, duress, threat or influence over financial matters.

Are you concerned that someone is financially manipulating you or someone you know?

There is a range of support systems available to assist you and you can learn more about safeguarding your financial affairs in this helpful video.

A Power of Attorney is a legal document that allows someone else to act on your behalf.

There are two types of Power of Attorney:

1. a general or non-enduring Power of Attorney, granted for a specific purpose and period of time (e.g. while an individual is overseas)
2. an Enduring Power of Attorney, which endures, or continues, after an individual is no longer physically or mentally capable of making such decisions.

Many seniors opt to provide a Power of Attorney to a family member or close friend – to assist them to take care of their financial affairs for fear they will decline in their capacity to do so – long before they require an Enduring Power of Attorney.

In most circumstances, the person who holds the Power of Attorney will do so with a high degree of ethics and professionalism.

Unfortunately, there are others who will take advantage of this arrangement or even coerce you into signing over your financial affairs to them before you are ready.

An Enduring/Power of Attorney must:

• Act in the principal’s best interest
• Avoid conflict
• Keep the attorney’s money and assets separate from the principal’s unless joint owners
• Keep proper records of the management of the principal’s money and assets
• Not pay or give gifts or benefits to themselves or other people using your finances.

If, after appointing a Power of Attorney, you are not happy with the arrangement, you can revoke the appointment.

If, after reading this, you feel someone has been financially abusing you or someone you know, rest assured that help is available.

A national Elder Abuse Helpline is available from 9am–5pm, Monday to Friday, for free and confidential advice for anyone experiencing elder abuse or who suspects someone they know may be experiencing elder abuse.

If someone is financially abusing you or you feel that you are in danger of someone mistreating you, the helpline can assist you with:

• legal information and advice
• social work services
• short-term counselling
• advocacy on your behalf
• a referral to other legal, consumer and support services
• representation in court or before tribunals (in certain circumstances).

Some examples of how they can help you include:

• obtaining domestic violence protection orders
• developing safety plans
• supporting you to relocate to a place of safety
• advice on appointing or revoking a power of attorney
• information on protective strategies to manage your assets and prevent or stop financial abuse
• advocacy and negotiation on your behalf if you are a resident of a retirement village experiencing unfair contract terms and conditions
• advising on recovery of property or money following elder abuse or financial exploitation.

The Financial Planning Association of Australia (FPA) and all of First Financial’s financial advisers are supporting members in combating elder financial abuse.

Our team is committed to safeguarding the financial wellbeing of our clients and working to prevent elder financial abuse by following the Financial Planning Standards Board guidelines on advising vulnerable clients.

One way to avoid someone taking advantage of you or committing elder financial abuse is to incorporate important and specific succession information into your retirement planning that best addresses your wishes.

At First Financial, our specialist team can offer the assistance you require to safeguard your finances and assets from the risk of abuse during your senior years.

To find out more, contact our team today.