Minimising the risk of financial abuse of the elderly
Financial abuse of the elderly is rarely out of the headlines at the moment and, unfortunately, this form of abuse will continue to escalate without careful planning. Sadly, research indicates that almost half a million people aged over 65 will experience some form of abuse in their life. This is a staggering and every adult should be able to live safely and free from financial abuse.
Most incidences of financial abuse are carried out by those family and friends who are closest to that person. Financial abuse can happen because the older person is often seen as an “easy target” to get money from, particularly if their health affects their ability to make decisions. For example, people with dementia or reduced cognitive ability are the most susceptible to financial abuse.
Whilst it is sensible to have a lasting power of attorney (LPA) in place in case you lack capacity to make decisions in the future in relation to your property and financial affairs, this is not sufficient in itself to minimise the possibility of financial abuse. There are many reported incidences of attorneys carrying out financial abuse under the authority given to them by an LPA. Sometimes this is due to simply mismanaging the older person’s finances and misunderstanding their role, but on other occasions there are more sinister motives such as theft for their personal gain.
LPAs are fairly easy to make and, rather worryingly, people do not include adequate safeguarding provisions. Simply choosing someone who you trust as your attorney is not good enough.
There is now guidance issued for the benefit of solicitors setting out what safeguarding provisions should be included in the LPA that we prepare. A carefully drafted LPA can include clauses to ensure that there is accountability to a third party for the attorneys’ actions, express limitations on the attorneys making gifts and to whom, consultation provisions, investment powers and notifying a third party after the LPA has been sent for registration.
Where an LPA is silent on safeguarding provisions, it is often difficult to detect financial abuse. A care provider’s role in spotting incidences of financial abuse cannot be overstated. Residential care providers will usually be the first to suspect something is amiss – for example, if fees are being paid late or not at all, or if funds are not being made available for the older person’s benefit. A care provider might also notice if family members are having inappropriate conversations with the older person about money.
Where there is a suspicion of financial abuse, this can be referred to the safeguarding unit of the Office of the Public Guardian. As safeguarding referrals can take a long time to investigate, it is easier to make sure that your LPA is drafted to include safeguarding provisions in the first place. Whilst this may involve you having to make a new LPA, this could be of huge benefit to you in the future.