The elderly can be an easy financial target for unscrupulous relatives and friends
When Jane’s daughter told her that she needed a short-term loan urgently, Jane didn’t hesitate. She sold down her small share portfolio and gave her savings to her daughter.
Now Jane regrets her generosity. Her daughter has no intention of paying her back, even though she originally promised she would. Jane’s savings helped supplement her age pension, paid the body corporate fees and provided small luxuries. Now Jane worries about money all the time. Her apartment is falling apart and she can’t afford to fix it. She can’t afford little trips with friends.
“I should never have helped my daughter,” she says. “She is still working but I am retired and am going into debt. I probably have to move to a cheaper flat away from my friends.”
Who would defraud and steal from old, frail people? The very people who offer support: trusted daughters, sons, lawyers, grandkids, friends, nieces and nephews.
Older people are often easy targets, particularly with rising rates of dementia. They have savings and often own their own home. At the same time, their adult children and other caregivers are under financial pressure.
Elder abuse is becoming recognised as a serious issue in Australia, says Anna Hacker, a lawyer at Australian Unity Trustees. She says that while no one would like to believe it could happen to them, there are many examples of children, other family members or neighbours acting dishonestly and taking advantage of elderly people.
There is even an annual World Elder Abuse Awareness Day (June 15 each year). The World Health Organisation estimates that about one in six people aged over 60 will be victims each year. While it can include physical and psychological abuse, often it is financial abuse by using an older person’s money or assets.
“It can happen to anyone, regardless of how much wealth they have, how strong they believe their family ties are, or how capable they think they or their nominated attorneys are,” says Hacker. “We have seen examples of sons or daughters taking their mother into the bank and getting them to withdraw large sums of money, and then hand it over for their own personal use.
“In other cases, we have seen adult children forcing their parents to take out a mortgage on their home and then pocketing the money, and the other siblings only finding out when the house needs to be sold to pay for aged care accommodation, or when their parent passes away.
“To most of us, such stories seem unbelievable but they are happening and, sadly, they are probably happening more often than we realise. Many elderly parents are either too ashamed to admit what their children are doing, or are cognitively impaired and unable to understand that they are being left financially destitute.”
It is important for older people to speak out. To help protect them there is growing number of “elder” lawyers. They specialise in financial and superannuation disputes or when others make decisions that the elderly don’t agree with. They also go through
the contracts and legal agreements from nursing homes and help with estate planning, such as preparing a will.
Hacker says one of the best ways for the elderly to protect their financial affairs is to set up an enduring power of attorney. This adds an extra layer of safety, as the attorney is then the only person a bank is authorised to deal with, says Hacker. In addition, the attorney would monitor bank statements and would be alert to any unauthorised or unusual activity.
It is vital to choose the right person for the role, says Hacker. “We always advise people to carefully consider who they can trust, and not just to choose their oldest child, for example.”
If they don’t want to burden a family member with the role, they can choose an accountant or a lawyer or the state public trustee and guardian.
Susan Hely has been a senior investment writer at The Sydney Morning Herald. She wrote the best-selling Women & Money.