In Part 1 of this two-part series, Partner and Accredited Aged Care Professional Debbie Sage explains how “inheritance impatience” and “inheritance conservation” are becoming common forms of financial elder abuse that require more awareness and understanding.
Most families want what is best for their ageing parents and relatives. However, financial pressure, family conflict and expectations about inheritance can sometimes blur important boundaries.
An older person’s money and property remain theirs during their lifetime. Their assets should be used for their own needs, care, comfort and enjoyment – not preserved or transferred simply because someone else expects to inherit them.
Two behaviours that can undermine an older person’s rights are known as “inheritance impatience” and “inheritance conservation.” Both can amount to financial elder abuse and may also lead to neglect, emotional or psychological abuse, manipulation and coercive control.
What is inheritance impatience?
Inheritance impatience occurs when a child, relative or expected beneficiary believes they should receive some or all of their inheritance early.
It may involve pressuring an older person to:
- give family members large sums of money;
- provide a “loan” that is unlikely to be repaid;
- transfer ownership of their home or another asset;
- sell the family home earlier than they want to;
- change their Will or superannuation nomination;
- pay another person’s debts or living expenses; or
- give a family member access to bank accounts, cards or online banking.
It can also occur when a person has appointed an expected beneficiary as their attorney under an Enduring Power of Attorney, and that person uses their authority to transfer the older person’s money and/or asset to themselves. The attorney may claim that the older person consented or “would have wanted” them to have the money/asset.
However, the transfer causes a serious conflict of interest, particularly where consent was never obtained, was influenced or manipulated, or was not freely and fully informed.
They may try to justify their behaviour with statements such as: “The money will come to me eventually. It makes sense to transfer it now.” Or “You do not need such a large house anymore.” Or “You should help your children while you are still alive.”
Sometimes the pressure is obvious. In other cases, it is presented as concern, convenience or sensible financial planning.
Rising living costs and housing pressures may contribute to a family member viewing an older person’s assets as a financial safety net. Those pressures do not create an entitlement to the older person’s money.
What is inheritance conservation?
Inheritance conservation can be more difficult to recognise.
It occurs when someone responsible for managing an older person’s affairs refuses to spend the older person’s money on their care, wellbeing or quality of life because they want to preserve the estate for future beneficiaries.
For example, an attorney appointed under an Enduring Power of Attorney may refuse to pay for:
- additional support at home;
- necessary home modifications;
- dental, hearing or mobility aids;
- allied health or other care services;
- suitable clothing, personal items or social activities;
- a more appropriate aged care room or facility; or
- reasonable comforts that the older person can afford.
The attorney may describe these expenses as unnecessary or wasteful. However, the attorney’s responsibility is not to maximise the inheritance. The older person’s assets must be managed and used for the older person’s benefit.
When a person is denied appropriate care or comfort to protect someone else’s expected inheritance, financial abuse may also become neglect.
How entitlement can develop
Inheritance-related abuse often begins with a sense of entitlement.
A family member or other anticipated beneficiary may start to think of an older person’s property as “the family’s money” or “my future inheritance.” Once that belief takes hold, it can become easier to justify decisions that disregard the older person’s needs, wishes and preferences.
Control may begin with apparently harmless comments, such as: “Let me handle that for you.” Or “You do not need to worry about money anymore. You will only get confused.” Or “We need to protect the estate.”
Assistance is not necessarily abusive. Many older people willingly ask trusted relatives and close friends for help. The concern arises when support becomes control, particularly where the older person is excluded from decisions, pressured into transactions or prevented from accessing their own money.
Ageism and financial elder abuse
Ageism can make inheritance-related abuse easier to excuse.
Growing older does not make a person less entitled to independence, privacy or control over their assets. Nor does a diagnosis of dementia, Parkinson’s disease or other health conditions automatically mean that a person cannot make decisions.
Assuming that an older person is incapable simply because of their age or diagnosis may allow others to take over decisions that are not theirs to make.
The older person’s preferences should remain central. Their money should not be used for someone else’s benefit without lawful authority and free, informed consent.
Australian law generally starts from the position that an adult has decision-making capacity unless there is evidence to the contrary.
Capacity is not necessarily “all or nothing.” A person may be capable of making everyday decisions about food, clothing or where they want to live but may require support with a complicated financial or legal transaction.
Capacity may also fluctuate. A person living with a cognitive impairment may understand a decision clearly at a certain time of the day (eg. in the mornings when they feel more alert and energetic) but then struggle at another (eg. in the afternoons).
Importantly, age alone does not establish incapacity. Neither does a medical diagnosis, needing help or making a decision that others consider unwise.
The relevant question is generally whether the person can understand the particular decision, consider its consequences and communicate a choice at the time the decision must be made.
The presumption of undue influence
An attorney must use their authority to benefit the older person – not themselves, unless expressly authorised within the document or approved by a Court or Tribunal.
Warning signs may arise when an attorney transfers the older person’s money or property to themselves, or arranges a transaction benefiting a relative, close friend or business associate. The attorney may claim that the older person agreed to the transaction or “would have wanted” them to receive the benefit. However, consent must be genuine, freely given and based on a proper understanding of the transaction and its consequences.
In Queensland, the law presumes that such a transaction was caused by the attorney’s influence. The attorney may then need to prove that the older person made the decision freely and without pressure or manipulation. Evidence that the older person received independent legal and financial advice may be important. Simply saying, “Mum wanted me to have it,” may not be enough.
This does not mean that every gift to an attorney is automatically invalid. However, an attorney who benefits personally creates a serious conflict of interest, and the transaction may be challenged. Similar transactions may also be challenged in other Australian states and territories, although the laws and legal tests differ.
The dignity of risk
The dignity of risk recognises that a person who has decision-making capacity is entitled to make choices that involve risk, even if others disagree with those choices.
For example, an older person may choose to take an expensive holiday, buy a new vehicle or donate to a cause they support.
If the person understands the decision and its likely consequences, the fact that the decision may reduce a future inheritance or be risky does not make it improper.
An inheritance is only an expectation while the older person is alive. Family members and other people considered to be “expected beneficiaries” of their estate do not have a present ownership interest in assets they may receive in the future.
Warning signs of inheritance-related elder abuse
Possible warning signs include:
- unexplained withdrawals or transfers;
- sudden changes to banking arrangements;
- an older person no longer having access to their own money;
- unusual gifts, loans or property transfers;
- pressure to sell a home or other assets for no reason that would benefit the older person;
- abrupt changes to a Will, power of attorney or superannuation nomination;
- signatures on documents the older person does not understand;
- a family member speaking for the older person and refusing to leave them alone;
- isolation from friends, relatives or professional advisers;
- unpaid bills despite the older person having sufficient funds;
- inadequate food, clothing, medication, care or home maintenance;
- refusal to purchase services or equipment the older person can afford;
- fearfulness, withdrawal or anxiety when money is discussed;
- threats to withdraw care, contact or affection;
- statements that the older person is “wasting their money”; or
- an attorney treating the older person’s money as their own.
One warning sign does not necessarily prove abuse. However, several signs occurring together may indicate that further scrutiny is required.
In Part 2, we look at how inheritance impatience can escalate into other forms of elder abuse, the financial and Centrelink consequences of gifting, the legal duties an attorney owes under an Enduring Power of Attorney, and what families can do to protect an older person’s independence and dignity.
Attwood Marshall Lawyers – support through every stage of life
Attwood Marshall Lawyers has a dedicated Aged Care team with Accredited Aged Care Professionals who can help you recognise the warning signs of financial elder abuse and understand an older person’s rights around capacity, consent and control of their own assets.
If you have concerns about an older family member, or would like to understand the legal protections available to them, contact Donna Tolley, Wills and Estates Department Manager, on 1800 621 071 to set up an appointment today.
