Financial abuse, particularly the financial abuse of elderly people, is an increasing problem within families. It often goes unreported and unaddressed but there are a range of legal remedies that should be considered when trying to deal with the issue or its aftermath.
With the rising incidence of dementia and other age-related conditions within our society, many people have to rely on others to help them manage their financial affairs.
This dependence often leads to situations in which a person makes another person a signatory to their bank accounts or appoints a person as their enduring attorney under an Enduring Power of Attorney.
How Does Financial Abuse Occur?
There are many ways in which financial abuse can occur.
The abuse can be criminal, for example, stealing, misappropriation or fraud.
In other situations, it can arise in a less obvious way. For example, undue influence may be exerted by one person over another leading to the weaker party signing over property to the stronger party or gifting money or belongings to the stronger party.
Another less obvious means by which a person can be financially abused is where another party, who knows that the person suffers from some disability or disadvantage, accepts gifts from the disadvantaged party.
Enduring Powers of Attorneys are a common means by which one party can access the property of another and use the other person’s money and property to benefit themselves.
What to do About Financial Abuse?
Many situations of financial abuse warrant a combination of responses.
For example, if a person has stolen property or misappropriated another’s property or used fraud to procure a person’s property, it may be appropriate to go to the Police and to ask the Police to investigate the matter.
It may also be appropriate, in an effort to recover property, to take other action.
If the abuse has involved the misuse of an Enduring Power of Attorney, refer to our information sheet on this topic at ( LINK).
For example, if a home or property has been transferred to another person as a result of some form of financial abuse, it may be necessary to consult a lawyer and to consider taking appropriate legal action.
Some of the legal responses that should be considered are:
- lodging a caveat with the Registrar of Titles to stop any further transfers of the property;
- revoking any bank signatory arrangements or Enduring Power of Attorney or other means by which the abuse is occurring ( see Information Sheet- Misuse of Enduring Powers of Attorney LINK);
- starting Court proceedings for remedies to set aside a transfer of the property;
- starting Court proceedings to obtain compensation for what has occurred;
- obtain legal advice and be aware of time limits that apply in relation to applications for compensation involving the misuse of an Enduring Power of Attorney;
- consider obtaining orders under the Domestic and Family Violence Protection Act 2012 for economic abuse and or orders to oust / remove an offender from a property;
- revoking any Nominees appointed under the Social Security Act.
Are the Legal Remedies Effective?
Yes, taking action can often be very effective and result in preventing further abuse from occurring and in the recovery of property.
Many cases go through the Courts in Queensland each year that concern financial abuse.
With the ageing population, this is a trend that is likely to continue.
It is important to act promptly. Taking prompt action such as lodging a caveat, can be an effective way to stop property from being sold or otherwise disposed off. Caveats allow time for other court action to be investigated and or negotiations to be entered into with the offending party.
Avoiding Financial Abuse
We should all be mindful of the risk of financial abuse and try to protect ourselves against it.
Simple solutions such as:
- appointing two people to act as your enduring attorneys may be helpful as it reduces the prospect of your attorneys acting out of self- interest and without accountability.
- in relation to banking arrangements, it may be better to appoint two people to be the signatories to your accounts rather than entrusting your affairs to one person.
Independent Legal Advice
It is also very important that you obtain independent legal advice before making any financial decisions, such as the transfer of your home that may benefit another person. Ensure that the professional that you are consulting only has your interests in mind and not those of anyone close to you or otherwise associated with you.