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With an increasing proportion of Australians aged over 85, the problem of elder abuse is on the rise. In fact, The United Nations estimates that five per cent of, or 175,000, older Australians will experience elder abuse in their lifetime1.
Financial abuse is the most common form of elder abuse, followed by psychological or emotional abuse. Sadly, elder abuse is likely to rise in tandem with the number of dementia cases among older Australians. This makes it extremely important to protect yourself or your older relatives from elder abuse in the future.
Who is vulnerable?
The most vulnerable people are those who have a cognitive impairment, are single, isolated and have adult children or grandchildren who collude to remove assets from the older person due to their need or greed, or to safeguard their ‘inheritance’2.
Some common scenarios used to gain financial benefit from an older person are:
Exploiting an older person’s super
There are a number of ways someone could exploit super for their own financial benefit. For instance, they could convince a retired person to:
Who are the perpetrators?
Senior Rights Victoria statistics show that two thirds of elder abuse is perpetrated by a family member, most likely a son or daughter. Because of the level of trust between family members, those guilty of elder abuse often hold an enduring power of attorney (EPoA). An EPoA only works when you have honest people looking after your interests who are vigilant regarding your overall circumstances. If the person who holds your EPoA abuses their position of trust, legal action can be taken to protect your interests.
An enduring power of attorney (EPoA) is a legal document that allows you to nominate someone you trust to make financial and property decisions on your behalf if you, for instance, have an accident, fall ill or lose capacity. The benefit of an EPoA is that unlike an ordinary power of attorney, it will continue to operate even if you lose full legal mental capacity. Your attorney has a responsibility to always act in your best interests.
How to avoid financial abuse
It’s important you protect yourself and your older relatives. An estate planning lawyer can help you prepare an EPoA, as part of your estate plan, that incorporates certain safeguards. For instance, two or more attorneys can be appointed, who can only act within defined terms and arrangements such as barring the sale of a property or restricting the withdrawal of super while you are still alive.
If you need help with your estate plan including the preparation of an EPoA please speak to your financial adviser. If you don’t have an adviser, we can put you in touch with one.
Source: Australian Executor Trustees
1. Senior Rights Service, World Elder Abuse Awareness Day 2017, 15 June 2017.2. Government of Western Australia, Department of Justice, Inquiry into elder abuse, 13 November 2017.