Open to abuse...
The older we get the more vulnerable we become. And as the traditional family unit comes under increasing pressure just to survive, the less productive members of that unit can easily – if mistakenly – be considered no more than a cost.
Worse, they can be, and increasingly are, exploited.
It’s why we hear more and more about elder abuse. That’s when seniors are taken advantage of – often though not always - by those they trust as their nearest and dearest.
Add to this highly volatile mix the increasing incidence of dementia – now Australia’s second most common cause of death – and life’s twilight can be bleak for many lonely and confused Australians.
Though not exclusively a by-product of the ageing process, dementia – the deterioration of the brain – affects seniors more than other demographic groups.
One of Australia’s leading legal practitioners in the area of wills and estates, Tim Whitney of McCullough Robertson lawyers, has seen close up how much damage can be done.
And it’s not only dementia that can lead to abuse. Other diseases or disorders which affect the brain or increase vulnerability generally can be cited.
He lists them:
1. People are becoming more aware of elder abuse issues and the avenue for reporting these concerns due to education and media focus on the topic;
2. The rates of dementia are increasing, meaning that there are more people in the community who are vulnerable to abuse;
3. People are becoming more aware generally about the amount of money that is involved in estates and financial abuse in this context comes along with the increase in litigation over inheritances.
People who would not otherwise be eligible to make a claim on an estate because they don’t satisfy the criteria are instead looking at other ways to receive a benefit from an estate (whether before or after death); and
4. There is an increase in blended families and more complicated family dynamics which naturally give rise to more disagreements about fairness and perceptions about what people deserve.
One characteristic of dementia is increased susceptibility to the suggestion of others. Most commonly, this is characterised by a positive response to “yes or no” questions, or being agreeable generally to suggestions made by others.
Sometimes, family members will use this suggestibility to influence a person to change a decision – in their will, for example.
A sample from Mr Whitney’s experience: (Not their real names)
Adam is married to Anna. Adam has three children from a previous marriage. Anna does not have any children from past relationships and there are no children of the marriage of Adam and Anna.
Adam entered the relationship with Anna having already built up some assets that he wished to see pass to his children eventually. However, Adam was also concerned to ensure that Anna was appropriately provided for during her lifetime. Adam drafted his will accordingly. At the time, Anna agreed that this arrangement was fair to all parties.
Adam was subsequently diagnosed with Alzheimer’s disease. As the disease progressed, Anna became worried about her financial security when faced with the real possibility that Adam did not have much longer to live. Adam’s disease had progressed and while he was often able to maintain the appearance of being well, he was susceptible to influence and easily swayed. Anna convinced Adam that the provision he had made for her was inappropriate, and took him to the solicitor to change his will to provide his entire estate to her.
“Naturally, this situation often results in messy litigation where the adult children feel that the new spouse has taken advantage of their parent in order to benefit,” says Mr Whitney. “If the will was not changed, the belief by Anna that she was not adequately provided for would be more appropriately dealt with by a family provision application after Adam had passed away.”
Another potential danger zone is power of attorney.
“There are many instances of appointed attorneys misusing their power, whether by a spouse as attorney, a child as attorney, or a friend or other family member,” says Mr Whitney.
Justin was the appointed attorney for Anna, his mother, who had recently died. Justin’s brother, David, is the executor of Anna’s estate. In the course of administration of the estate, David has reviewed the bank accounts for his mother and noticed multiple transactions for expensive dinners at a local restaurant, large electronics purchases and multiple cash withdrawals.
David questions Justin about the transactions, and Justin says that each transaction was specifically authorised by his mother, as she was grateful for his help and care of her, so she instructed him to withdraw cash to spend on himself. He says she authorised him to make large purchases from an electronics store and took him out to dinner at his favourite restaurant.
David knows that Anna was diagnosed with Alzheimer’s disease, and at her later stages of progression she seemed to lose appreciation for the value of money, and started trying to give money away to all of her friends, family and even some strangers. David estimates the amount of money that Anna “gave” to Justin before she died was about $30,000 and he is unsure what to do as the executor of her estate.
The above scenario is not uncommon and is clearly likely to cause a dispute between David and Justin.
“Another scenario is where an attorney sells a home for the principal and purchases a substitute residence in different names,” says Mr Whitney.
“For example, the principal may hold their residence in their name solely, and the attorney purchases the substitute residence as joint tenants with the principal, so that on the death of the principal the attorney will automatically inherit the house.”
However, the most talked about elder abuse scenario seems to involve elderly or vulnerable people without an established support network.
Often, elderly people without family members or close friends are lonely and crave companionship.
Neighbours, carers, cleaners and even professional advisers have often received a benefit from the estate of a deceased person as a result of providing that person with kindness and compassion during a time when they felt lonely and unsupported.
It can be difficult to determine whether that benefit has been obtained by coercion or whether the testator has truly appreciated the friendship and has made a carefully considered decision.
It is in these circumstances that it is critically important that lawyers are taking steps to question their clients about changes being made to their documents, particularly where the changes demonstrate a significant departure from previously made wills.
Elderly or unwell people often rely heavily on others for assistance, whether that assistance is day to day care, provision of transport or just companionship.
And it can be a source of real terror to find that assistance will be taken away.
Robert’s elderly father, Raymond, lived with him in his home. He could no longer drive due to his eyesight, so relied on Robert to drive him. Robert would drive him to the shops, to get coffee and play bridge with his friends, and to medical appointments. He also relied on Robert for companionship, and they often watched television together.
One day, Robert stumbled across Raymond’s will and power of attorney. Robert noticed that his older sister, Jane, was appointed executor under the will and as attorney under the power of attorney. Robert was offended that Jane had been appointed in these roles.
He felt that, given his sacrifice in caring for his father and providing a roof over his head, he should be the one to take care of Raymond’s finances and administer his estate. He was also upset that he and Jane were treated equally under Raymond’s will, as he believed he should receive a greater share while Jane was financially well off and lived in a different state.
Robert was very angry and did not speak to his father for a few days. He also refused to drive his father to his weekly bridge game, telling him instead to ”take the bus”.
Raymond was terrified at the idea that Robert might permanently withdraw his support and care. Raymond did not want to be isolated from his friends and valued his relationship with his son.
Raymond thought there would be no harm in changing his will and enduring power of attorney to appoint Robert as executor and as his attorney and giving Robert a larger share of his estate, if that would make Robert happy. Raymond spoke to his son and asked his son to arrange an appointment to change the documents. Robert and Raymond went to the solicitor together and Raymond made the changes.
While in this case, Raymond was not suffering from any disorder affecting his mind, he was in a position of vulnerability with respect to his son.
We should bear in mind though that elder abuse isn’t always malicious. Particularly with misuse of powers of attorney, some attorneys simply don’t know their obligations and may truly believe that there is no harm done in spending the principal’s money for their own benefit, particularly if the principal is not in a position where they will need that money.
Others may not be well-informed about the effect of a person’s illness on their personality.
Meanwhile, Australia’s banks (the scandals exposed by the Banking Royal Commission not withstanding) are finding increasing instances of blatant elder abuse. So much so that the Australian Bankers’ Association has urged the Federal Government to act now on financial abuse against the elderly and resolve three key issues by Christmas.
“Financial abuse against elderly Australians is a significant problem, with the Seniors Rights Service estimating 40 per cent of elder abuse cases relate to financial exploitation,” says the ABA.
In a speech to the 5th National Elder Abuse Conference, ABA CEO and former Queensland Premier Anna Bligh said that three key decisions needed to be made by the Federal Government to empower banks to help address the issue.
“There are far too many heartbreaking stories of elderly, vulnerable Australians who have been financially exploited by family members or close friends,” Ms Bligh said.
“Bank staff are on the frontline of this issue and see firsthand the financial abuse against the elderly, however are often hamstrung to confront the issue.
“Banks are determined to play their part and are asking for key changes to the law to empower their staff to make good faith reports of financial abuse against the elderly,” she said.
The following changes were recommended by the Australian Law Reform Commission in 2017 and would make a big difference:
• Legal changes to help bank employees safely report suspected financial abuse to a designated body
• A national register of power of attorney orders
• A standardisation of power of attorney legislation.
“Bank staff are not qualified to make assessments about a customer’s competency and are limited by legal and confidentiality obligations, therefore it’s important they have an appropriate body to flag suspected abuse for investigation,” Ms Bligh said.
The challenges banks have in reporting suspected financial abuse were highlighted by the Australian Law Reform Commission in its 2017 report to the Federal Government, Elder Abuse - A National Legal Response.
The ALRC recommended the establishment of an agency to investigate suspected financial abuse and a national register of power of attorneys, both of which will require the support of the Australian Government and all State and Territory Governments.